One of the major hurdles to overcome when you want to enjoy being an entrepreneur is achieving financial independence. In simple terms, it means not having any debt and an almost certain income for the foreseeable future. It is a goal that all business owners aim to reach and succeeding involves a lot of self-discipline, determination and patience. Today I will focus on self-discipline.
You’re just starting your company, or perhaps you got a new cash injection, the future looks bright! You’re planning what to do with the funds and your mind, almost inevitably, encourages you to present your company better than the competition. Whilst this is normal, it can cost you a large part of your funds.
Before we delve in further I want you to remember something; the money which you have for your start up or have received from other third party sources (such as investors, loans, etc.) does not belong to your business, but is only a loan. Your company only has money when it starts selling products or services and starts making a turnover. Until then, the money in the company’s account is all debt.
Keeping this in mind will help you make an important distinction; what is a necessity and what is a luxury. Here are a few examples, although they may vary depending on the business type and client base.
- Instant coffee in the office is probably a necessity, having an espresso machine that uses expensive capsules is a luxury.
- Having chairs in the reception area is a necessity, whilst having ergonomic leather sofas and a large LED television is considered a luxury for many start ups.
- Whilst providing employees with a decent area to enjoy their break time (such as a small canteen) is a necessity, having a playground of the Google headquarters type is most definitely a luxury!
The money you have must be invested in your business in a way that will generate or increase turnover. If your business sells goods, then consider expanding your stock variety or quantity. If you offer services then get better equipment to provide better services. And let’s not forget marketing, which is also an important investment.
Having self-discipline when it comes to spending or investing money your company doesn’t own can make that all important difference.