One of the earliest tips I have received about proper money management was not to put all my savings in the bank. When I was younger, I didn’t listen to this advice because it went against what I thought was the right way of handling money, which was to save, and save, and save some more. Back then, all I knew was that if I didn’t go shopping as often as I wanted to and saved my money instead, I’d be rich one day!
However, I learned later that this was not a very good approach if my goal was to one day become financially free. I found out how inflation rates could sometimes reduce the value of my money faster than the interest rates can increase its amount. If I wanted financial freedom, I had to find a way to make my money grow. As soon as I learned about this fact, I decided that my money should go into business.
However, starting a business is not a simple task. There are many things to consider and a single mistake can cost you most, if not all, your hard-earned savings. You really have to plan carefully before you begin such an endeavor. Thankfully, a lot of information online can make starting a small business easier than it has ever been!
Just a few days ago there was an article I read at Small Business CEO written by Greg Crabtree entitled, “The Winning Game Plan for Your Home-Based Business.” Greg successfully articulated many of the points I wanted to share to you myself. He reminds us that in order to be successful in our business endeavors, we should:
- Define what success looks like. We all have different standards of success. My definition of success is for a business to at least be able to become a primary source of income. It depends on you what type of success you want to achieve.
- Choose a simple organization structure. A small home-based business doesn’t need a fancy business system. Make your business a simple one so that it’s easier to maintain.
- Count the cost of our business. In order to keep track of our progress, we must check if we’re losing or gaining resources by understanding the four forces of cash flow.
These simple adjustments in your home-based business can be the difference between success and failure. For the most part, it’s fear and not a lack of information that prevents people from starting their own business. It’s okay to be afraid. I experience a lot of fear too, but I also know that I’ll regret not trying more than I will regret failure. As long as you have the passion to succeed and the faith to persevere, you will find success in life.
BUT before you get carried away and start a business today, I think I should give you a practical tip that can help you start a stable and successful business career: Don’t spend your savings with abandon.
Some people make the mistake of being too brave. When starting a business, we also have to start with caution and prudence. An article also from Small Business CEO gave some very practical advice about starting a business. It was called, “The Secrets of Starting Business Successfully.” In that article, Julia Tang reminds us not to get too fancy when starting a business. Here are some of the reminders she gave:
- Be careful with our money. We should not splurge on superficial improvements to our business. In fact, according to Julia, “a good rule of thumb is that anything that does not make money for you or protect your investment, should not be purchased at this time.”
- Select simple names for our business endeavors. A hair salon with a fancy, ambiguous name such as “Cut it Out” may miss out on potential clients who are in a hurry. People who just want basic service are more likely to visit stores with clear signs like “Joe’s Barber Shop.”
- Be humble. Julia says, “Just as a doctor is a specialist in his field, and you go to him for medical problems, your banker is a specialist in his field and you should go to him for your money problems.” In business we have to learn to respect the expertise of the people we work with. Just because you’re the boss does not mean that you should act like a know-it-all.
These are just a few samples of the many wonderful insights and ideas in Julia’s article. One of the more memorable ones was when she explained the effects of using full names in the title of our business. For example, calling my business Adaire Mercer’s Styling Salon has the advantage of making credit somewhat easier to acquire for me, but it also has the disadvantage of making my business seem like a small, local business. Amazing!
There are literally hundreds of articles full of useful tips online and elsewhere that can truly help you start your own profitable business. Quite honestly, starting a business is one of the most exciting, challenging, and fulfilling things you can do in a single lifetime. There are risks involved, but these are risks worth taking. Have faith in yourself and in your abilities. Good luck!