The entrepreneur on the path to doom is the one that will never think of tomorrow. If you cannot literally see yourself and your business far into the future beyond today, then you are on the path to destruction. Why would you want to go into business just for today’s sake alone? Why would you want to build a business the world will no longer remember after you are gone?
Therefore, you must never cease to ask and be able to answer this question; “What can we start doing today to meet the needs of tomorrow?” Not having this consciousness is the reason why most entrepreneurs fail in business. Since they are not thinking about the future and believe in doing everything alone, the need to keep improving their game will be less paramount and as a result; they end up being eaten up by those businesses that are consistently creating the future today.
Justifying Expenses When Going Alone
Your small business incurs expenses no matter how much money you make. These expenses are overhead costs for items such as rent, insurance, lease payments and utilities. These costs exist no matter how much you sell. You must constantly measure your overhead against your sales to make sure you are getting an acceptable return on the money you pay to run your business each month.
Such is not the case for the entrepreneur heading for doom. In fact, the exact opposite is the case; trying to do more than one thing at a time eventually not achieving excellence in any. As an entrepreneur your success or failure will be as a result of how well you maximize your strengths.
Entrepreneurs do not seem to have the capability for justifying expenses when going alone. Entrepreneurs are some of the best finance jugglers on the planet. They start businesses on shoestrings and determination. Yet, when it comes to spending money on virtual assistants and consultants, the brakes go on. The permeating attitude of “I can do it myself” becomes a slowly tightening noose; slowing progress and creating guilt.
Jack of All Trades: What Makes Justifying Expenses When Going Alone So Difficult
Your strengths are those activities you naturally enjoy doing and would naturally do for free your entire life if necessary. This is how every great entrepreneur in history made their success; doing what they love and loving what they do.
They are not jack of all trades and masters of none, NO! They are jack of few trades and masters of some. Why? Because entrepreneurship is about using your passion to make a positive contribution for the benefit of others. Stop doing what everyone else can do and start doing what only you can do exceptionally well. Focus on your core areas of strength.
Extravagance: The Root Cause
Being an entrepreneur means being able to do more with less. The entrepreneur on the path to failure is the one who is extravagant –the habit of being excessively flamboyant, wasteful or spending money irrationally. Thrift or frugality is a requirement for your entrepreneurial journey if you hope to become successful. How else do you intend to succeed if you cannot judiciously manage the resources in your disposal?
A good way to avoid being extravagant is to classify and justify your expenses into two categories; urgent expenses and Important expenses. Your urgent expenses are your recurrent expenses, meaning they are periodic in nature. Your important expenses are your capital expenses; meaning they are not periodic in nature but are necessary for the continuity of the business.
They are more like expenses made today in order to secure the future. Also, as your business begins to grow, don’t become one of those who start showing off the success of their business by acquiring unnecessary symbols of wealth. Place yourself on salary, this is very important. You must never take what is not yours, make it a priority to put aside and redeploy all excesses created by the business back into the business.
Whenever you want to go for justifying expenses when going alone, you must show how that increase will improve sales. If you can show that a 1 percent increase in overhead will give you a 2 percent increase in sales, you can justify the expense. If a 1 percent increase in overhead only produces a 1 percent increase in sales, you have no justification for the expense because you would only break even.
While it may seem as though reducing overhead would be an admiral goal, you must examine the effect of that reduction. If reducing overhead reduces sales, then it is counterproductive. But if you can demonstrate that an overhead reduction will produce the same or higher level of sales, the reduction is justified.
What Can We Do To Help You Out!
Being unable to plan ahead and justify expenses can be detrimental. Let alone going alone through everything without a team on your side working with you. What entrepreneurs need to understand is that myths don’t work. That’s why they are named so. Going through a disaster alone and being reluctant to spend on virtual assistants can cause great amount of money to the business. Devising strategies to deal with the business crisis ensures company’s potential to pave a way through them. Employing such strategies not only reduces the chances for the company to be faced with a crisis but helps reduce the array of potential damages as well. In order to prevent your company from getting handicapped due to unpreparedness, Crisis Prevention & Restoration offers its services and expertise, contact by calling us at: 415.891.9107 or emailing us at: CPR4Biz@gmail.com