My little nest egg

I was listening to one of the latest episodes of Trailblazer.fm, where Lee and his guest were talking about “Pricing in a weak economy”.

Aside: I’m still on the fence of this whole “we’re on the verge of a global recession” thing — but I’m no economist and a glass-half-full kinda guy in general.

The podcast was a great listen nonetheless — and it got me to thinking about my business savings account and how much peace of mind it affords me.

It’s something I didn’t start until year 3 or 4 of my business (which I fully regret) — especially with how simple it’s been and how quickly its grown.

Do you have a business savings account?

If not, here’s what I’ve done — maybe it helps…

Open yourself up a separate savings account, and at the end of each month toss 5% of your sales in it.

It doesn’t have to be 5% (mine is 8.5%), but a figure that’s low enough that the chances are you’ll never notice it’s gone. But if your profits are too slim to even handle 5%, consider adding 5% to your prices and have your customers fund it for you.

The deposit each month probably won’t be a lot — but in a couple of years time, it can add up to a pretty significant chunk of change.

I’ve only had to dip into it twice (when my monthly profit wasn’t quite what I needed to pay my salary), and now I’m sitting on a pile of cash that could carry me several months if every one of my clients conspired and decided to quit paying me.

Or, in the more likely scenario; an economic downturn.

A nice little nest egg makes you a lot less fearful of what could go wrong and gives you the ability to operate at full force while others might be cutting back.