If you have been playing with the idea of starting a business because you want more freedom, a better return on your time invested, or just a better quality of life, start by looking in the mirror. You are your first business.
As a contributing member of our society you provide a product or service in return for monetary compensation. You have an income and you have expenses. “You Company” is in the business of living your life and maintaining your standard of living.
Your approach to business will parallel your approach to personal finances. Add six zeros to your financial situation and that is how you would perform as the CEO of a fortune 500 company. Ok, this may be a loose correlation but the principle is valid.
If you are succeeding with your personal finances chances are you will do just fine starting a company. If however your personal finances are not in good shape and your savings account is not regularly growing you may want to think twice before jumping on the business wagon.
The idea behind this stance is that money is not the issue, behavior is. No amount of money will fix the behavior that has brought you to your current situation. The behavior and choices that have brought you to your current situation will continue to take you down the same path if you don’t make a change.
The secret is to know which behaviors lead to monetary and personal success. Incorporate these behaviors into your life and guess what, you become that guy/gal with the coroner office and the big house on the hill.
I call it the flywheel effect. You won’t notice a change today or tomorrow but over time you will see everything come around. There are no definitive points along the way as you continue to give the wheel a push but over time the wheel picks up speed. The more you engage in successful behaviors the more successful you become, it is nothing more than continuing to choose to be successful.
Successful Behaviors and Habits
So, what are successful habits and behaviors? In short they are the choices that minimize expense and maximize return. People often live paycheck to pay check by choice, they may not realize it but it is by choice. Each choice compounds into the big picture; the choice to have cable, the choice to have the I-phone, the choice to go out to eat tonight, are all choices that push someone to spend each dime they earn.
Before I got married I spent a ton of money on food and entertainment. I would justify it by saying I am a single guy who does well so why not. The problem was that I began establishing horrible habits that cost a lot of money. I would buy breakfast and lunch at Subway, pick up the bill for my friends, and always be the driver without asking for gas money. While these are seemingly not bad actions, from a business perspective they were working against the business of me. (As a side note I still love to do all three of the above, but now in moderation)
I am not saying you need to become a cheap money hording individual but I am saying you probably have some leaks in your bucket that could quickly be eliminated. You will be amazed at how quickly things can turn around.
People often start a business thinking it will bring in more finances and consequently overshadow their behavior problems, and it is simply not true. I have heard it said that doctors and lawyers often have bigger issues with money than most. The reason is they were never taught how to manage what they have. Regardless of how much money one makes, if you spend more than you make you are heading towards bankruptcy.
Starting a business is not something you want to take lightly, and as your first business you will want to start with your personal finances. Establishing new behaviors is simply a matter of repetition. Repetition becomes habit, habit become routine, routine becomes personality, and personality becomes character. If you want to start a business take the time to assess your personal situation.