Why do entrepreneurs need to save better? As soon as I thought of this subject an instant response was “for contingencies, of course.” Yes, an entrepreneur needs to save for an emergency, new investments, expansions and pension to self on retirement.
As I observed the circle of entrepreneurs surrounding me and enquired about their saving habits each of them had various reasons, ways and fundamentals of saving. However, the purpose was one common statement: “As entrepreneurs, we save to grow.”
Natasha Munson, an author-entrepreneur says, “Money, like emotions, is something you must control to keep your life on the right track.” She insisted that use your money to motivate your business and go to the next level. And we all say a BIG YES!!!
One needs to be wary of where to cut and where to spend.
With all these discussions a question was raised that how do we save, do we cut on expenses, quality, resources, or service. No, we can’t save by deterioration in core business delivery. A PR professional then replied we cannot save penny wise and pound foolish. One needs to be wary of where to cut and where to spend. An educationist commented that we need to save smart, build an emergency fund and invest in retirement plans.
As entrepreneurs, we need to understand that there is always a balance between capital invested and debt taken.
Hence, we can save in the working of business by cutting down on unnecessary costs, negotiating better deals, bargaining and even getting into barter deals sometimes. And second, we also save from the earnings by investing in financial plans, real estate, precious metals and high yield savings account.
As entrepreneurs, we need to understand that there is always a balance between capital invested and debt taken. Maintain a healthy ratio between these by not indulging all money in business and keeping aside a sum and also as the ratio exceeds on the higher side of debt input the emergency fund and avoid being debt-ridden.
In a nutshell, save better for:
- Avoiding debt
- Avoiding frugal habits
- Role model for stakeholders
- Message to vendors and clients that they are in safe hands
- Save Money and Relationships as these are the tombstones of successful businesses.
Rashmi Modi is a Trainer and a Soft Skill coach.