Today’s Bissett Bullet: “Debt leverage is a very risky business, especially for smaller firms. I appreciate that it’s not always avoidable, but proactively planning and saving for a rainy day is a far better strategy.”
By Martin Bissett
In an ideal world, if the unexpected occurs and you need to draw on an emergency fund, you turn to your cash reserves, the money you have saved to allow you to continue drawing from your business in the event of a temporary shortfall in income. When the COVID-19 pandemic hit in 2020, those businesses with a three- to six-month reserve saved for a rainy day found that it didn’t rain quite so hard as it might have done.
The lesson? Be financially wise. Treat the funds in your business as sacred and plan for the unknown. You will sail through whatever emergencies come your way without accumulating debt to repay.
Today’s To-Do:
How much can you reasonably afford to save each month to build your rainy day fund? Plan to start doing so immediately.
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