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The importance of having an emergency fund could never be stressed enough. Emergency funds will help your Business cover unexpected expenses. Unexpected events may arise from the economy, regulations, pandemics or natural disasters. None of these can be foretold but as a business, having funds set aside for such emergencies is a must.

  • In this article we are going to look at:

  1. Benefits of creating an emergency fund.

  2. How to set up an emergency fund

  3. How much should be in your emergency fund.


1. Security

Emergencies are always unexpected and emergency funds give you security and peace in case of one. Your Business emergency fund protects you from drowning in debt or closing your Business entirely in times of trouble.

2. Inconsistent cash flow

Any Business owner knows that business does not stay high all the time, every business has its high and lows. Though the rate of sales can change what does not change is responsibility and the need to pay bills or employees.

3. Unexpected Business opportunity

Sometimes opportunities may arise for your Business that you didn’t expect and you might need to quickly take advantage of. A good example would be that you might need to buy out your competitors at a lower price or a product you have been looking for at an affordable price. Having savings saved up in case of amazing opportunities is undeniably important.


1. Get the right bank for your Business

Know the services that you need from a bank in saving up your funds and that will guide you to the right bank. You could start by doing a research on a list of banks, know their services and decide which services are best for you and your Business.

2. Determine the amount you need.

Consider things like if your business was unable to function for a month, how much you would need to keep it afloat then multiply that by at least six months. This will help you create a goal that will help you determine how much you will be adding to your savings every week or every month. However, reaching your goal does not mean you should stop, continue saving, you never know how much need you might have in the future.

3. Start depositing funds

Now that you have your goal, you can start depositing funds into your emergency account whether weekly, biweekly or monthly, and make a decision that suits your business and your earnings. I would advise you to not give yourself pressure, you can start small, you don’t have to starve yourself so you can put more money in your emergency fund if you hadn’t started but you can start with a realistic figure that works for you, your business, and your family. Also try to avoid anxiety by ”always thinking that something bad might happen to you and your business and you are not prepared for it”. Keep a positive mind and save your savings on your own terms and not out of fear.


As said earlier, saving for longer periods of time is always advised because an emergency is something you don’t plan to know how bad it could be or how much it can affect you, your business and your family. I would advise that you should save as much as you can, especially if you are a person with a long list of bills and responsibilities. Yes, sometimes governments help but it’s not advised to depend on them. However experts say that it is advisable to save for about three to six months’ worth of expenses always ready in your emergency fund.


By now I hope you have understood why an emergency Fund is a way of securing your business in case of a rainy day. Don’t just relax and say “whatever happens, the future is not in your hands”. While that may be true some things are definitely in your control and that includes how you will stand when it’s not so sunny.

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