Question

Alistair is the owner of a small business unit. He has set aside funds to finance the day-to-day activities of the business. He tries to use these funds judiciously and any surplus from these funds is used to take care of unexpected opportunities. Having a substantial fund of this nature also helps his business to get higher credit. What is this fund called?

Answer 1

This fund is called and Emergency Fund or a buffer. All business owners must make sure that they have such form of funds in case the business experiences lean times or a crisis. All smart business people must know and have such form of fund in order for them to become prepared to start over with their business or provide for recovering in such bad situations.