Definition

Deciding where to spend money, time, and effort across the business. Smart allocation makes sure every part gets what it needs to do well.

What to consider

  • Plan for both predictable and unforeseen events.
  • Keep contingency funds easily accessible.
  • Review and update plans regularly.

Real world scenarios

  • A company sets aside an emergency fund to cover unexpected downturns.
  • An entrepreneur develops a plan to manage cash shortages during economic slumps.
  • A small business creates a crisis management plan to address potential operational disruptions.

Related terms

Entrepreneurial Finances