A lot of people and by that I mean a lot many people come around to find out what exactly they must be doing in order to make sure that their business is up and running and that they also have sufficient savings to either reinvest back or to find an alternate source of income.
When I was beginning to intern at my own business which then belonged to my father, I had no idea that we needed to have more than enough juice in the company to be able to be ready for a rainy day.
I personally like to tell all entrepreneurs and the owners of small business at least that it is important that they live off from only their personal savings for a couple of years. All businesses, especially the small and the medium ones, need an incubation period and that is the reason why a rainy day fund should always be devised irrespective of the fact that there may be a need for it or not.
Is saving for a rainy day fund absolutely essential:
Precisely the point! Exigencies in the new business may arise or not at all. But the fact that a fund is ready can give the entrepreneur enough guts to face up risks in business. It is common knowledge that a businessman that takes risk goes a long way.
It gives immense peace of mind to the entrepreneur to know that he has something to fall back on in case things go haywire.
The science behind it:
It has been noticed that contrary to the belief that businessmen can become reckless with their decision in case they had a hedge fund to fall back on, businesses actually flourish if the owners of the small businesses take this prudent decision at the right time.
I also read an article on my interview on this website called CouponoBox and I thought I should share it for everyone to read. In it, I am talking in detail about how you can carve out a fund and then It’s only a matter of maintaining it till you have a decent amount in it in case of emergencies.…