5 Financial Habits of Businesses That Thrive

Build An Emergency Fund

Having 3-6 months worth of core operating expenses in cash reserves is one of the best ways to protect your business when unexpected expenses occur. As a business owner, it’s almost guaranteed you’ll run into setbacks, slow periods, equipment failures, or surprise costs at some point. The businesses that handle these situations best are usually the ones that prepared for them ahead of time.

Strategies for Creating Your Emergency Fund:

• Open a high-yield business savings account to earn extra interest on your reserves.
• Redirect a portion of new revenue growth straight into savings.
• Cut unused software subscriptions and recurring overhead costs.
• Deposit seasonal profit surges or tax refund windfalls.
• Automate a fixed percentage or dollar amount from each sale into your fund.
• Treat your emergency fund as strictly off-limits unless it’s truly needed.
• Review your monthly expenses at least once a year to make sure your savings still cover 3-6 months of operating costs.

Closely Monitor Business Cash Flow

Cash flow is one of the most important parts of running a business. Even if profits are strong, cash flow problems can create major challenges if the money isn’t available when bills are due.

Having a routine for monitoring cash flow can help you spot issues before they become bigger problems. The more closely you track money coming in and money going out, the easier it is to make decisions and stay in control of your finances.

Tips For Monitoring Cash Flow:

• Review your yearly budget against actual results. Compare each month and adjust spending when necessary.
• Send invoices promptly, offer early-payment incentives when appropriate, and follow up on overdue payments.
• Create a monthly cash flow forecast to project expected income and upcoming expenses.
• Consider using cash flow tracking software or accounting tools.
• Keep a close eye on accounts receivable and outstanding invoices.
• Negotiate with vendors and suppliers when cash flow is tight. Ask about longer payment terms, flexible schedules, or volume discounts. Many vendors value long-term relationships and may be willing to work with you.

Build A Strong Business Budget

A strong budget helps you stay in control of where your business is heading. Looking at your finances from both a short-term and long-term perspective can help you make better decisions and avoid surprises.

One of the simplest ways to build a budget is to start with an overall view of your business finances.

To Build Your Budget:

• Gather past financial records to identify spending patterns and seasonal trends.
• Estimate your income from sales, services, investments, and other sources.
• List all business expenses including rent, payroll, insurance, inventory, software, utilities, and other operating costs.
• Compare your monthly income against your monthly expenses to determine whether you’re operating at a profit or a deficit.
• Update your budget regularly as business conditions change.

A budget should be a working tool that changes with your business.

Be Proactive About Business Debt

Debt can limit flexibility and make it harder to reach other financial goals. While not all debt is bad, every business owner should have a clear plan for how debt will be managed and eventually paid down.

Many budget expenses can be reduced or eliminated over time, but debt payments tend to stick around until they’re addressed directly.

Methods for Eliminating Debt:

• Avalanche Method: Pay off loans with the highest interest rates first to reduce overall borrowing costs.
• Snowball Method: Pay off the smallest balances first to build momentum and create quick wins.
• Consolidation: Combine multiple debts into a single loan with one payment.
• Refinancing: Explore refinancing opportunities if stronger credit or better rates are available.

Whatever approach you choose, having a plan is better than making payments without a long-term strategy.

Regularly Review Financial Statements & Forecast Finances

Set aside time each week to review your financial statements, payments, and account activity for any discrepancies. A short weekly review can help you stay on top of your business finances and catch issues before they become expensive mistakes.

Regular reviews can help protect your business from:

• Being overcharged
• Overpaying for services or subscriptions
• Missing loan, vendor, or payroll payments
• Fraudulent charges or suspicious account activity

Along with reviewing financial statements, make financial forecasting a regular habit. Looking ahead at expected revenue, expenses, and cash flow can help you prepare for slower periods, larger purchases, and unexpected costs.

Forecasting doesn’t have to be complicated. Reviewing upcoming expenses, expected income, and seasonal trends can give you a better idea of what your business may need in the months ahead.

Financial reviews may not be the most exciting part of running a business, but consistently checking your numbers and updating your forecast can provide peace of mind and help keep your business on solid financial footing.

Give Your Business A Strong Financial Footing

Good financial habits aren’t built overnight, but small, consistent actions can make a big difference over time. Building cash reserves, monitoring cash flow, following a budget, managing debt, and regularly reviewing your numbers can help put your business in a stronger position no matter what challenges come your way. The sooner these habits become part of your routine, the easier it becomes to stay in control of your finances and focus on growing your business.

This article was written by Brian Bruns, Relationship Manager at Core Bank