When you’re new in business you typically tend to nickel and dime every single one of your financial decisions. It’s the nature of the beast as you don’t know how to spend money you haven’t made yet.
You ask yourself questions like:
“Should I spend money when I’m not making money?”
“Should I figure out how to grow my business on my own vs. pay someone to teach me how to do it?”
“When should I hire an assistant to help me run my business?”
Take a look at this week’s video article or read below how you can become a financially savvy entrepreneur:
The financial decisions are endless and I’m here to tell you that they will not go away, in fact they will get harder as you continue to grow. But as you develop your business you will learn what you need and what you should and should not invest your money in.
From my experience as an Employed Entrepreneur I felt fortunate that I was able to spend money before I made money. I knew going into my venture that I would have discretionary income that I could use to fund my business. This made all the difference in the world as I was able to invest in a better website, business, marketing and social media coaching. But most importantly I was able to grow my business with confidence and not have to deal with the stress of the financial worries that often come when you have to make choices between what to spend your money on.
I like to tell my Employed Entrepreneur clients that they too can benefit from having their job help fund their dream. If you’re in this position you can do the same. Below are a few ways to help you make financially savvy decisions about how to invest in your business.
Don’t be afraid to invest in yourself. If there are pockets or gaps in your education or experience then you need to fill in these gaps. Pay for education or a mentor if necessary.
Get Assistance. You will grow your business faster when you work on the money generating activities and someone else works on the administrative tasks that they are masterful at. You should work on what is your brilliance.
Clean up your money house. Before you leave your job you want to get your money issues in order. Look at your finances. Pay off as much debt as you can. Put a pause on things you may not need to pay for. This will help you ease the stress of the money issues you may face if you don’t clean them up before you become a full-fledged entrepreneur.
Start your entrepreneurial nest egg. For those of you still working in your job now is the best time to build your entrepreneurial nest egg. Pay down any debts that you have and transfer money into a savings account to prepare for the time you’ll be a full time entrepreneur. Until your business is stable you will need to compensate for the highs and lows of inconsistent cash flow. A general rule of thumb is to have a minimum of 3 months of expenses saved but preferably more like 6 to 12 months. Some people choose to tap into their home equity funds and others choose to leap without any savings. To prepare for rocky times you will want to have some type of savings so that you’re not strapped financially.
In the comments below, tell me:
Where have you felt the financial pains in your business? Do you have a hard time deciding how and where to spend money?
Do you have tips, pointers or wisdom to share on how to better make or save money so you can make the leap from employee to entrepreneur?