Why a business savings account is smart business

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When we think savings, its usually in the context of personal finances but just as personal savings are vital for financial wellness, a business savings plan is key factor in keeping your business on track

Having money in a dedicated account to cover planned or unexpected expenses, ensures that your business is not affected by sudden demands on your cash flow. There are many factors that can affect your cash flow and being aware of them means you can not only manage unexpected bills, but it positions you to take advantage of opportunities and plan for known expenses.

When starting out, many business owners don’t factor savings into their cash flow as resources can be limited and there are always things to spend money on, however, stretching a little to include savings is a smart business move.

So what events can affect cash flow?

An unexpected downturn in income is the most obvious one, and the pandemic highlighted the vulnerability of small businesses that had no financial buffers in place. Some of the other events that can put your income at risk include supplier delays, staff shortages, the loss of a major client, illness, or even a tax bill that you are not prepared for. Having a money in savings gives you peace of mind and an effective way mitigate financial curve balls.

Unexpected opportunities

Having extra money in your business means that you can take advantage of an opportunity if it comes your way, for example, someone could be selling stock or equipment at bargain prices, a competitor could be selling their client book or business, or a prime location could be up for grabs.  Either way, the case for extra cash in the business is compelling. You can always apply for a HSBC Kinetic savings account in the HSBC Kinetic app or separately via the phone, it’s quick and easy and there is no paperwork to deal with. So you can take advantage of new opportunities when they arise.

You don’t have to open, have or maintain a HSBC Kinetic Current Account to open, have or maintain a HSBC Kinetic Savings Account. 

Get the savings mindset

A useful way to kick off a savings plan is to approach the act of saving from a different angle, for example, view savings as a path to accessing opportunities rather than a limit on your spending, you’ll quickly see the benefits and get excited as you watch your balance grow. Treat the savings as you would any other bill, in other words, it’s a non-negotiable.

Getting started

Create a budget for your business and factor in the savings element as you would a normal monthly expense, most business owners don’t do this so savings do not get prioritised. The trick is not to over commit to a large amount, then fail to reach the target, as this may discourage you and throw you off track. Set an amount you can afford and stick to it. With HSBC Kinetic you can set-up a standing order to pay funds into savings automatically each month. This is a really useful feature because you don’t have to think about it and second guess whether you want to save.

A good hack when setting up your budget is to slightly over-estimate your costs which will invariably leave you money over to save. Just be sure to set that aside each month. Setting up savings account with HSBC Kinetic is really simple, with no paperwork to deal with.

Keep your savings objectives fluid and flexible, you may want to save up for new equipment or a business expansion but if other demands are made on the funds, your savings are there to help you through – giving you choices and protecting you when you need it.  Finally, let’s not forget about the fun aspect of saving – it could provide you with a well-earned vacation, an epic office party or bonuses for staff. The key take-away here is that a savings account gives you options and is part of managing a healthy growing business.

HSBC Kinetic offers you more than a Savings Account. You can also apply for a new business current account in minutes with HSBC Kinetic. So if you’re a sole trader or a single director shareholder limited company, find out more at business.hsbc.uk

Simply download the HSBC Kinetic app and apply in minutes. With most accounts opened in 48hrs.

*HSBC Kinetic is subject to eligibility, T&Cs, credit check and fees apply.

If you would like to open a HSBC Kinetic savings account without a HSBC Kinetic Current Account, please call 0345 587 3529 or +44 1397 436960 if you’re outside the UK.

This article was written as part of a paid-for advertising content campaign with HSBC.

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Over three million SMEs get no interest from their business savings

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Managing Cashflow