the gayle group has worked with hundreds of small businesses. One of the issues that always comes up is savings. When I work with business financial information, I look for 3 basic accounts: an operational checking account, a payroll checking account, and a business savings account. I encourage business owners to put 10% of every invoice into their savings account. I can imagine that you already have a good idea of the typical conversation. “I’m barely making it now. How can I put aside 10%? I need all the money I make” — AND MORE!
Several years ago I was working with a family-owned business and we were having this conversation. The husband said there was no way they would be able to save any money. That’s why I was there — to help them increase their income and their profit so that they would have money to put away. The wife mentioned that savings was a topic of contention, even in their home. They had 2 small children and a teenager. The teenager worked after school in the business. But the kicker was that the teenager had a savings account. The mother told me, sadly, that their teenager had more saved from a part-time job than they had saved in their entire marriage.
So I suggested they take the little ones to their bank and have them open savings accounts in their own names (with Mommy and Daddy’s help, of course). At least once a month, the whole family goes to the bank while the family puts their own money into their accounts. Then the family does something fun — Daddy makes breakfast or they go to the park.
I spoke with the husband a few months later, and he was very excited. The whole family had individual savings accounts, and they put money in every other Saturday. After they went to the bank, they had a fun Saturday adventure.
In fact, they also opened a business savings account. They still could not afford to set aside 10% of every invoice, but they had started building a savings account. The bottom line is less about how much went into the account and more about the habit of saving.