Find a branch My Account Intermediary Portal

How Much Should Your Business Save and Why It Matters

The everyday operations of a business can bring surprises and sometimes unexpected costs. That is why having a solid savings plan is essential to help cover your back.

Every business needs to build a safety net. It helps you prepare for future growth, stay resilient when times get tough, and provides peace of mind to keep moving forward.

But why and how much should your business save?

In this guide, we’ll run through why saving matters, how much your business should save, and short and simple tips you can start applying today to manage your savings effectively.


Why saving matters in a business

For every business, having healthy savings plays a pivotal role in creating a safety net and supporting long-term stability.

Savings can help you prepare for:

  • Unexpected costs that may arise suddenly
  • Future improvements or opportunities for growth
  • Possible changes in income or revenue

Not to forget, having savings in place gives you peace of mind. It can ensure your business has a plan B if times get tough.

 

How much should your business save?

A common guideline for how much to save as a business is to have up enough savings to cover three to six months of operational expenses. This includes rent, salaries, utilities and other essential costs.

However, how much you should save should depend on your business, your expected income and your long-term savings goals.

To work this out, you need to assess your expenses, cash flow patterns, and areas where your revenue might fall short, so you know where savings could come in handy.

Once you have a clear picture of where you stand, you can plan to set aside funds regularly, even if it’s a small amount at first.

 

Tips for managing your business savings

Beginning the savings process and managing it effectively requires time and a plan of action. Here are some short and simple tips you can start applying today to manage your savings:

 

1. Set a financial goal

To plan for the future, it is important to set short- and long-term financial goals so you know how manage your savings effectively.

Start by creating a list of everything your business needs to save for. For example, you might want to build an emergency fund for slower business months by putting aside a little each month to reach your target.

Then, you could even set up a separate account for each individual goal to keep your finances organised in small pots.

By doing this, you can establish clear targets to work towards and focus on what matters most for your business.

 

2. Put your savings into a savings account

Keeping your savings separate from your current account can help organise your funds efficiently and ensure you’re not tempted to dip into it.

By using a business savings account, your savings can grow and be ready to support your business during tougher times or help fund new improvements.


3. Set up automatic transfers

By setting up automatic transfers (direct debit), you can grow your savings without having to think about it.

It can become routine in your business to set aside each month and automatically transfer to your account without needing to manage it manually.


4. Track your cash flow

As a business, it is important to regularly review your income and expenses.

This will help you understand where your money is going and identify any expenses that may not contribute to your overall business strategy.

For example, you might discover recurring subscriptions you may no longer need or find opportunities to negotiate better terms with suppliers.

To make this process easier, you can use simple accounting tools to help track your income and expenses.

While this won’t fix financial issues, it can give you a clearer picture of where you finances are being spent and spot more ways to save as a business.

 

How we can help manage your savings

At Dudley Building Society, we offer business savings support through our team of specialists at our branch locations.

We can talk through your savings goals and help you choose the right business savings account for your needs.

To get in touch or book a one-to-one appointment, you can fill out our online enquiry form or contact us by phone or email.

We also have a savings calculator tool to help you calculate your returns. Simply insert how much you plan to save and see how much returns you can expect.

 

Other resources you can use

We have a wide range of resources you can use to get help and make the most out of your account.