NEWS & RESOURCES

Authored by: Adelae Winters, Financial Advisor 

Debunking Money Myths: How Business Owners Can Save in Today’s Economy

In today’s economic climate, many believe that saving money is nearly impossible. With rising housing costs, inflation impacting everyday expenses, and economic uncertainty, setting aside extra funds can feel out of reach. However, business owners have unique opportunities to build wealth through strategic planning and financial discipline. By focusing on controllable factors and leveraging available tools, entrepreneurs can create financial stability and long-term growth.

Setting Financial Goals: A Roadmap to Success

For business owners, setting clear financial goals is not just about personal savings—it extends to business financial health as well. Defining specific short- and long-term objectives can provide direction, accountability, and measurable progress.

Short-Term Goals for Business Owners

Short-term goals typically span a few months to a couple of years. These can include:

• Building an emergency business fund to cover unforeseen expenses.
• Saving for business expansion or new equipment purchases.
• Reducing debt by setting aside funds for loan repayments.

Just as with personal savings, short-term business goals work best when they are specific and tied to a timeline. For instance, instead of saying, “I want to save for an emergency fund,” try, “I will set aside $1,000 per month for six months to build a $6,000 emergency business fund.”

Long-Term Goals for Business Owners

Long-term financial goals often shape the future of both your personal and business finances. Examples include:

• Funding a retirement plan tailored for business owners, such as a SEP IRA or Solo 401(k).
• Investing in commercial real estate to build long-term equity.
• Planning an exit strategy or succession plan to ensure financial security in retirement.

Consistently contributing to these goals—even in small amounts—helps establish financial stability and prepares your business for sustained growth.

Strategies for Growing Your Money

Saving alone isn’t enough to combat inflation. Business owners should explore investment strategies that align with their financial objectives.

Short-Term Growth Strategies

For funds you may need in the near future, focus on low-risk, liquid options such as:

• Business High-Yield Savings Accounts: These accounts offer better interest rates than standard business checking accounts while keeping funds accessible.
• Short-Term Certificates of Deposit (CDs): CDs provide fixed interest rates for set periods, making them a low-risk option for temporary savings.

Long-Term Growth Strategies

For business owners looking to build wealth over time, consider these options:

• Diversified Investment Portfolios: Investing in stocks, ETFs, or mutual funds can provide long-term growth potential. Diversification helps manage risk.
• Tax-Advantaged Retirement Accounts: SEP IRAs, SIMPLE IRAs, and Solo 401(k)s offer tax benefits while building retirement savings.
• Reinvesting in Your Business: Expanding operations, upgrading technology, or investing in marketing can provide higher long-term returns than traditional investments.

Before investing, always review a fund’s objectives, risks, charges, and expenses, and consult a financial professional.

Automate and Optimize Savings

Many business owners struggle to save consistently due to fluctuating income. Automating financial contributions can help create discipline and reduce the temptation to spend excess funds.

• Automate Transfers: Set up automatic transfers to savings or investment accounts to ensure consistency.
• Utilize Round-Up Apps: Some business banking apps round up transactions and allocate the difference to a savings account.
• Leverage Tax Planning: Work with a CPA to identify tax-saving opportunities, such as deductible business expenses and tax-deferred investment accounts.

Practical Money-Saving Tips for Business Owners

Small financial shifts can have a substantial impact over time. Here are some actionable steps to optimize both personal and business savings:

• Review and Trim Business Expenses: Regularly audit business expenses to eliminate unnecessary costs, such as unused software subscriptions or excessive office supplies.
• Negotiate Vendor Contracts: Negotiating better rates with suppliers can free up capital for savings.
• Implement Cost-Effective Marketing Strategies: Leveraging organic social media marketing and referral programs can reduce advertising costs.
• Plan Purchases Strategically: Take advantage of seasonal discounts and bulk purchasing to save on inventory and office supplies.
• Establish a Tax-Efficient Withdrawal Strategy: Work with a financial professional to determine the best way to take distributions from your business to minimize tax liability. 

Saving is Achievable—And Essential

Despite economic challenges, business owners can achieve financial security through strategic planning, disciplined saving, and smart investing. By setting clear goals, leveraging automation, and making informed financial decisions, entrepreneurs can build both business and personal wealth.

At Cordell, Neher & Company, PLLC, we understand the importance of financial well-being and are here to guide you through every step of the process. To learn more, visit our website at cnccpa.com or call us at (509) 663-1661. Investment strategies discussed may not be suitable for all investors, please consult with your financial professional.