In terms of setting your businesses Rainy Day Number – anything is better than nothing. But if I was to give any business a target, it is three months worth of expenses to run your business. That means that if you couldn’t sell anything for three months, you could pay all of your expenses – this includes paying yourself, profit, tax, and debt, all of that for three months and not have to freak out about it.
This changes your physiology as well, from a scarcity perspective, to a mindset of abundance or security that if things hit the fan, you’re in a good place. The key to this is regular – and I would suggest weekly – consistent contributions. As an accountant, a client of Inspire – and we do this for clients with our tax forecaster – we can help you with how much tax to set aside. We can calculate that on a weekly basis if you’d like. It’s basic, but it is so powerful.
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