By Karlene Sinclair-Robinson

Many entrepreneurs, especially small business owners, were hit really hard during the last financial meltdown. Before that period, it was spend, spend, spend or in some cases, expand, expand, expand. In business, spending and expansion are good and necessary, and so is having a “rainy day fund”. Whenever I mention this type of account to business owners who had never considered it, they tend to grasp the idea enthusiastically.

Too often, entrepreneurs end up in situations where they did not forecast the negative effects of such events. Many had blinders on that inhibited them from paying attention to what was happening. Due to this lack of liquidity, small businesses suffered the brunt of the financial storm to the extent that many had to downsize their businesses or personally had to return to the job market. Having a business rainy day fund is vital to future growth or survival; whether your business will be able to weather out the next financial storm or not, depends on how you approach it now.

Rainy Day Fund

This fund is important to helping you financially and will assist you in building banking relationships. Opening a business savings account and transferring a specific amount to that account should be mandatory. It should be considered a fixed expense, like your lease or insurance payment. Even if it is only $25 weekly or monthly, it is more than you had in that account yesterday. When the account balance gets to a certain figure, you can always consider a CD or some other form of low risk investment to set aside some of the funds.

Here are some guidelines and actions you should consider:

  1. Open that account today.
  2. Decide on a set dollar amount.
  3. Decide on “Automatic Transfer” from business checking.
  4. Use online banking to help you keep track.
  5. When you are ready to invest, seek professional advice.

One thing you will discover in doing this is that you will gradually get into the habit of doing it regularly. If you are worried about being able to do this consistently or about getting started, take a look at where you are today.

  • Where you in a major financial bind during the last few years?
  • Did you have enough cash flow to see you through slow periods or what I call survival times?
  • Did you have to lay off employees because of this cash flow problem?
  • Did you have to use your personal income to keep the business afloat?
  • Did you have to borrow from family and friends?
  • Did you have to make changes that negatively affected you in other ways?
  • Did you have a lot of stress and more health problems during this period?

If the above questions hit home for you, then start on this journey back to saving. Of course, your business must be generating additional revenue. Creating new opportunities is a must. Implementing this rainy day fund can help you in the future. Talk with your CPA and banking representative today, and then take action. If you already have this type of account, continue the process. Put your priorities in order.

About the Author

Karlene Sinclair-Robinson, dubbed “The Queen of Business Financing” is considered a foremost expert on Alternative Business Financing. She is also the Bestselling Author of ‘The Small Business Owner’s Guide to Alternative Funding”. Look out for her new entrepreneurial book, “Spank The Bank”, coming soon. Visit her at You can also find her on Twitter via @KarleneSinRob.