Building an emergency fund

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Deciding to run your own business is tantamount to choosing a life full of constant surprise. Though you are already done with all your planning, research and preparation, there is still that sense of unpredictability. This is the reason why entrepreneurship is such a risky venture.

Consequently, having a particular amount of money set aside specifically for business financial emergencies is vital. Building an emergency fund is also critical, and should be taken care of before letting your business off the blocks just like advertising, purchasing merchandise, and renting a space are essential steps to take when starting a business.

Your business can become of natural disasters, theft, or outside occurrences such as street construction or extended periods of crazy weather conditions that cause business and sales respectively, to decline. In the event of such occurrences, it is better to be prepared than caught off guard, with no way to resolve the problem.

Having an emergency fund helps a lot. However, be sure they are only used for real financial emergencies. Making a list that outlines the things that your emergency funds can be used for may be helpful. These should be things that must be taken care of immediately in order to encourage the survival of your small business.

For more on building emergency fund, read this post from MoneySmart.gov.au: https://www.moneysmart.gov.au/managing-your-money/saving/building-an-emergency-fund