Thoughts on Excellence Free E-Newsletter Series
Volume 20, Issue No. 18b
November 15, 2022
By Dan Coughlin
You start your own business in order to have the freedom to run your own business. Then you can make your own choices and improve your business. And then you can make a profit in order to make wise decisions on what to buy.
The fastest way to go out of business is to run out of money.
Then you have to take a job working for someone else, which is fine but you will still have to make money in order to make wise choices on what to buy. Otherwise, you will never have the opportunity to start another business.
Either way, the absolute key to dealing with any amount of money is to spend way, way, way less than you make.
Only when you have financial freedom are you really in a position to handle the freedom involved in running your own business. Financial freedom is not based on how much you make. Financial freedom is based on how much you keep from how much you make.
Cash in the bank is the fuel that allows a business to have real freedom. No matter how great your credit line is if you live off of credit you have no freedom. If you have wonderful material items, but no cash in the bank, then you don’t have real financial freedom.
If you really, truly want to be an entrepreneur, then you have to have the ability to spend way, way, way less than you make. No matter how financially successful you are at the moment, tough economic times can and will show up. If you spend every dime you make and pile on debt, then you are not really ready to be an entrepreneur.
Please trust me on this one. I have made mistakes over these past 25 years, and the biggest of these was not being ultra-disciplined in spending way, way, way less than I made. Once I learned that lesson for the last time in 2010, I have made sure to remind myself of it every day.
You do not NEED a fancy car or house or the latest phone or the fanciest gadgets to be an entrepreneur. What you need is freedom, and one of the most important forms of freedom is financial freedom. Pay off your debts. Don’t add more debts. Look at whatever you make and spend a small fraction of it. As you make more, your small fraction will be a bigger number and THEN you can upgrade.
I’m keeping this message short and sweet on purpose. I’m hoping that way you remember it.
Here’s the message:
A critically important element in the entrepreneurial mindset is to spend way, way, way less than you make.
Republishing Articles
My newsletters, Thoughts on Excellence, have been republished in approximately 40 trade magazines, on-line publications, and internal publications for businesses, universities, and not-for-profit organizations over the past 20+ years. If you would like to republish all or part of my monthly articles, please send me an e-mail at dan@thecoughlincompany.com with the name of the article you want in the subject heading. I will send you the article in a word document.