It’s Not Business, it’s Personal
Practical personal finance habits can take major stresses off your shoulders as you build your company to success. I’d like to paint a picture of a familiar scenario for anyone who has built a new company to show why reducing your stress load is important.
It’s one year into your new business – you’re taking any work you can, and can’t afford to pick your clients. This has opened you up to bottom of the barrel clients who don’t see your value and waste your time. You are painfully aware of your weaknesses, because the market reminds you every time you botch a sale. Rent is always due, you’re taking side jobs, and wondering when it’s time to dust off the resume or give your old boss a call.
Sound familiar? If not, congratulations, you’ve never had to experience the hard knocks of building a company from the ground up. For the rest of us, just know – you’re not alone. This road is as hard as the mentors before us said it would be.
Why Did I Ever Leave My Job?
Many entrepreneurs leave their jobs to pursue their dreams of control, freedom, and to only answer to self. With this freedom comes a price. The price is the realization that you made twice as much money for half the work at your job. To not answer to anyone else means you take full responsibility for your own bad decisions. To be free, you must work. If you dream of success, you must find comfort in failure. To capitalize on your strengths, you must be conscious of your own weakness.
At the heart of these paradoxes lies a divine truth. Nothing is free in this world. You will be humbled from your ideals as the real world smashes your ego into the ground. The universe cares not for your misguided notions of green grass on the other side of the cubicle. You are not entitled to a single dollar until you provide true value to your fellow human being. This takes time, and the pain of experience to really sink into your bones.
Developing Good Personal Finance Habits Helps
As you marinate on this notion, some practical tips on getting through the lean years can ease the transition. Know that how you handle your personal finances will directly impact your business, and vice-versa. When you blow a hundred bucks at the bar or eat out every day, you limit your marketing budget. When you buy an unnecessary asset for your business, you may have to scramble to make rent.
Below are the most common tips I give my clients on repeat regarding personal financial habits. These will make your first years in business so much easier, and will help cultivate the discipline you need to be a better entrepreneur
Learn to Cook and Eat at Home
This alone can easily free up $500 or more in cash flow per month. There are many other benefits to cooking at home. You are more likely to eat healthy. Cooking properly helps you think about and manage waste, which can translate to better control of company processes. It is an impressive skill that many people find interesting, and helps you to connect with people on a human level – making you more likable and able to expand your network. Cooking often brings you in contact with farmers markets and may spark an interest in gardening. This opens up a whole new world of joy and satisfaction in the art of living. Besides, what are you working so hard for if you can’t stop and enjoy the finer practices of the human experience?
Stay Away From the Bar
Going to the bar can be a very expensive habit with little or no return. Tricking yourself into believing you are networking at the bar or club is a fool’s errand. I invite you to take inventory and run a cost-benefit analysis of the number of leads you’ve met and closed at the local watering hole and how much net profit you’ve added to the bottom line. There may be a few exceptions if you are in entertainment or the service industry, but the numbers will not lie. I am not advocating stringent sobriety. I am saying you are financially better off exercising temperance in this area and partaking at home or a friends house. It’s less expensive and makes it easier to wake up in the morning and get into your productive mode.
Avoid Mindless Consumerism
This one should be self evident. If you are a shop-o-holic, stop right now, and even consider selling those impulse purchases you’ve acquired. If you are serious about your business, you now have an obligation to be a producer. Being labeled a consumer should be an insult. Quitting this habit alone can easily free up $500 – $1000 per month or more to invest back into your company.
Track, Track, Track!
What gets measured gets managed. I cannot stress this enough. Download Mint by Intuit (free), and hookup your personal bank account to it. Mint is a personal finance tracking app that sets up a bank feed and categorizes your spending, sends you weekly reports on your spending habits, and all around just helps you get your personal finance game tight. In my opinion, Mint is Intuit’s best personal finance product. It is streamlined, intuitive, and beautifully designed.
Let’s face it – building a company is hard. You need an idea that really helps people, tough skin, discipline, and the ability to admit when you’re going the wrong direction. Poor personal financial habits will only introduce unnecessary stress into your life. You don’t need it, and you have the ability to control it. You are more powerful than you think.