By many alternative thinkers starting your own business is associated with capitalism, ambition, materialism and “success”. This certainly has a lot to do with it but there is much more to it than that. I can confirm as I have been through on my own start-up journey for over a year now.
I can assure you that it was a challenge and that your self-esteem, your ideas and values, your courage, persistence and mental and emotional stability will be tested.
Looking back these were the biggest tests I faced at the start of my business;
- People don’t like your idea or think it’s unrealistic. Disapproval is hard for the ego and as the entrepreneur you need to be strong and keep going.
- There are so many things to do and not enough money and time to do them. We have these same challenges in everyday life with a normal job, but in the case of a normal job you can much easier say “that’s not my problem” or “I work from 9 to 5” or “that’s the risk my boss is taking, I’m not responsible from that if it goes wrong”.
- It’s your own money that’s invested and it might never come back. This tests your relationship with money, believe me…it makes you reflect.
- Plan A proves to be wrong, so does plan B…do you have the creativity and persistence to come up with plan C?
- There are always new things you need to do that you never did. Do you believe you can do it? If there’s always work to do, can you take time off for yourself to relax, enjoy and be conscious of what is?
- There’s not much chance to hide in case things don’t go well. It’s you who is in charge and will have to deal with all consequences… even if you can come up with an excuse why it’s not your fault. So? What do you do about it? It really learns you to accept responsibility.
It all comes down to emotional and spiritual maturity. I think many entrepreneurs have learned a lot on a personal level while starting their own business. But at least as many have let these intense learning go by.
I believe I’m growing a lot with it, but there’s still plenty I can improve. I like the challenge, although regularly I have a down moment and think of easier things to do. Thank God that I don’t let these moments keep me down and I go after it again.
What I’ve learnt as a start-up business owner
Don’t forget to breathe and take it all in
It’s important that, while you’re following the standard advice, you remember to enjoy life while you’re living it.
Don’t Enjoy Life
Life, especially the personal finance aspects of your life, is all about balance. Don’t spend more than you earn, but don’t starve yourself of life’s pleasures. You don’t have to spend a lot to enjoy life but you don’t have to starve yourself of all fun in order to save more for your business. While all your business goals are important, it’s also important that you enjoy life now so that you don’t burn yourself out.
It doesn’t have to involve abandoning all sense of financial control and suddenly applying for payday loans. I have an employee who is extremely diligent about saving money during the week. He brings in his lunches, skips out on happy hours after work, and otherwise lives a pretty austere and frugal lifestyle. There’s absolutely nothing wrong with that. However, whenever he goes on vacations with his girlfriends, he’d goes all out, even resorting to emergency payday loans should his expenses over-run. Now you don’t need me to tell you how expensive those are! Also, as you probably know, anytime you visit a vacation destination, there will be ample opportunities for you to spend a LOT of money.
If you ask him, he’d tell you that he was saving his money during the week so that he could go crazy on vacations without worrying about how much he spent. If you ask me, I think his pendulum was just swinging the other way from austere to lavish. I never judge how other people spend their money, that’s their own business, but a small part of me wondered if his “average spend” would be lower if he just enjoyed life a little more on a daily basis (you can go out with friends without spending a lot).
Let’s be honest, you don’t need me to tell you to enjoy life, right?
Fittingly, as you work those long hours at the office or the shop or while you’re hitting the books at the library, remember also to spend time with your loved ones doing the things that make you happy. Be sure that you’re working to live, rather than living to work. Success and more pay are great, but there’s more to life than money and those things are free.
Budgeting is one of the cornerstones of a solid business plan because it’s essentially the planning, tracking, and managing of your short-term finances. When it comes to budgeting, there are many ways to do it but the purpose is the same – knowing how much you are spending on what.
Failing to Budget
Failing to budget can be one of the most damaging things you can do to your personal finances. Without a clear picture of how much you’re spending and on what, you’re basically wandering the forest at night without a flashlight. You might know that you want to buy a house in five years, but without an accurate figure of how much you’re spending or saving, you really have no idea whether that goal is even feasible. If it is feasible, you have no idea how much you should be saving towards that goal. A budget gives you that accurate snapshot and it’s one of the reasons why an income statement, which lists expenses, is a crucial financial statement for a company.
You can’t improve what you aren’t tracking. You should always be trying to lower your expenses while maintaining the same standard of living. If you frequently shop at a particular store, it’s smart to try to find coupons so you get the same for less. If you like a particular food or drink, it pays to test out cheaper alternatives to see if you can tell the difference. Where you save in one area, you can then splurge in another. With a budget, you can tell where you stand the greatest chance of improvement. You may discover patterns you didn’t know beforehand.
You will automatically improve just by tracking. When I started my business, I had a budget where I tracked every expense to the penny. By virtue of doing that, my actions were affected by even recording the expense. I knew of times when I packed a lunch because my dining out expenses were nearing artificial milestones like £50 that month or £100. There was one time I thought about buying a new pair of jeans but stopped myself because I hadn’t spent money on clothes that month. Since I was nearing the end of the month, I figured I’d buy it next month (I never did until much later).
Budgets help you make informed decisions. With a budget and an accurate picture of your spending, you can make an informed decision. If you know you have slack in the budget, you can enjoy yourself more knowing that you’re safe. Friends planning a vacation next month? You can happily agree to go without guilt or concern if you know your budget can handle it. How long will it take for you to build up your emergency fund? With a budget, you now know.
After a few months of budgeting, it’s okay to slack off and not track as diligently. Once you have an accurate picture, you simply need to adjust it to changes in your life. But every once and a while, track expenses for a week or two just to see that there haven’t been any big changes.
Capitalism doesn’t necessarily equate to success. You just have to look around your nearest High Street to notice the changing business fronts. Some people are definitely better at it than others. Failing to budget, and also just as importantly to enjoy yourself, are my two cornerstones to running a fulfilling and successful business.