The great part of starting your own business is you are your own boss. And congratulations because there is nothing more empowering than taking the plunge and striking out on your own.
The bad news is that you’re your own boss. Believe me, I know. After the euphoria of getting all the pieces in place to start and after successfully booking your first revenue there are certain realities that hit. You start to realize that the time you might ideally want to spend working with clients, opening new business channels or developing new products can also be crowded out by administrative duties, accounting, regulatory requirements.
But then, a light bulb turns on, there are all kinds of new and innovative ways to operate your small business out there; outsource them. But, be careful, because after you open up the Pandora’s box of outsourcing, even after you pick just one vendor, most likely something complicated, like IT, then all of a sudden it seems like there’s a use case for EVERYTHING to be outsourced and magically the parade of spam emails for every service targeted to help small businesses under the sun are in your inbox.
Sound familiar? Now, you’re wasting your time again, not acting as part-time CEO with a few other hats to wear, but you’re 100% of the time Chief Operating Officer, stuck in the minutiae of interviewing vendors and proposals and again taking your eye off the ball for what’s truly important; growing your business, not just managing it.
So, you may ask what does all this have to do with your personal finances? After all, I’m not a business consultant and I’m certainly not going to persuade you either way to start or not to start a business. I’m a financial advisor. I advise you on your investments, your tax situation, your expenses, your long-term savings and retirement plans.
And maybe now it’s clear, and it also goes to what I also talk about when I mention “having a plan.” I’ve worked at start-ups, started several businesses, been in large publicly-traded corporations that have scaled up in good times and scaled down in bad times. If you’re starting a business there are do’s, don’ts and even maybes, depending on the circumstances.
And if I leave you with one thing as an entrepreneur that I’ve learned sometimes easily and sometimes the hard way; your business could be the greatest gift to world commerce this century, or just another flop, but never make the mistake of letting it derail your personal financial situation. You want staying-power in your new venture. You need focus and the last thing you want to do is not be properly financed personally to totally focus professionally.
Yes, that has to do with your personal expenses, which I know can be tough for a start-up, but I am specifically talking about your retirement and your savings. The power of compounding investment returns is just too strong to ignore when it comes down to this. No matter how large or small the contribution to your plan (remember everyone needs a plan), the effects of sticking to the plan are enormous.
I’m a huge fan of simple and repeatable processes that can have great, positive influences on long term health. So, why not do the same in personal finance? Where the good behavior can be programmed into you and become a positive habit formed with small increments of capital, even in the toughest of times on your personal cash flow, can go a long way.
Anyone with a calculator can do the math but let me spell it out quite simply. You’re on a budget, you just started out, you’re pitching investors or borrowed to get things started. You may not even be paying yourself a salary yet. You’re working 7 days a week and not sleeping much. NOW add in the must have large specialty coffee you get every day or a Red Bull (I’m a huge Celsius Fan myself, much healthier and we own the stock!). You’re getting the point right?
Most would scoff at just an extra $500-600 a month saved isn’t going to make you rich, right? Well take out that calculator. Use normal historical stock market returns of 10%. Start with $7,000 and invest that same $500-600 a month over the next 30 years in a Roth or Traditional IRA. You know what that’s worth; more than $1.2 million dollars. Nothing fancy, skip the takeout food and focus on your business and win, lose or draw, you’re still a millionaire. Now that’s powerful.
We at Gasima do extensive work with entrepreneurs from all walks of life, from technology start-ups, restauranteurs and musicians to medical and therapy practices. Whether it’s simply doing your taxes or learning more about successful strategies that allow you to save as you ramp your business, we are here to help you grow.
Don’t let anyone tell you it’s make it or break it with your personal finances whether you’re the founder of a fast-growing start-up or a small local business owner looking to establish themselves. It’s possible to save and still achieve all your long-term personal goals. Contact me and I’ll show you how. The bottom line is we get it, we’ve been there.
