As an entrepreneur, and in particular if your business is a new start-up, your company is your baby. You are committed to its development and long-term growth. However, many business owners make the mistake of putting their all into the company and forget about taking care of themselves; this is particularly true as it relates to time spent in the business versus family or personal life.
Sadly, many entrepreneurs will financially feed their business and forget to do the same for themselves. One important key to business success is similar to the general emergency rule – put your oxygen mask on first before trying to save others.
In this article, we talk about the importance of making sure that you take care of yourself financially so that you can manage and grow your business.
Why the “Oxygen Mask” Concept Matters?
As an entrepreneur, you are taking a significant financial risk with investing in your business. Like every other business owner, you are expecting a positive result from your company. However, there is no way to foresee or plan for the future with any absolute certainty, and so any money that you put into your business will not always reap the boomerang results your desire; this is especially so in the early years of the company, and as an entrepreneur, it is important to manage your personal finances to ensure your survival, even if the business fails.
The reality is that you cannot entirely rely on your start-up business (your baby) to keep you financially healthy. A new business can eat up a lot of funds necessary to make the type of investments that will lead to growth and long term income generation activities. Therefore, it is too big of a risk to leave your personal financial survival up to the uncertainty of positive cash flow in your business.
Even if your company can cover the corporate expenses, in many cases any profit may have to be re-invested. If you are not taking care of your personal financial position, you may find yourself sleeping on your office couch as you wait for the business to grow. And then what happens if the business fail? If you put the oxygen mask on the business first, you might find yourself dying financially, and soon your company will start to fail as well.
Therefore, keeping your personal finances at the forefront of your mind before considering the financial needs of your business is crucial for maintaining a healthy financial state for you and the company. The results include the growth and development of the firm and you the entrepreneur.
Ways to Make Sure You Put the Oxygen Mask on First
Get a part-time job or side gig
Time management is crucial in our everyday lives and even more so when starting and growing a business. It is important to create a schedule that will allow you to focus on your company and to continue in your full-time job as well. When starting your business, it is best to handle both your business and your full-time job to make sure you always have a steady income.
Balancing your time between a business and your job can be challenging. It means that most of your days are focused on working, leaving very little time for family and relaxation. However, if you can manage your time properly, you will be able to take care of your personal expenses as well as have money to invest in your business.
This way you are not at risk of losing everything if the business is slow to make a profit or fails. A full-time job or side gig will provide the financial stability to take care of your personal bills so that you can focus your energy on the business without worrying about your financial future.
Often an entrepreneur with a great idea will leave his or her job to pursue the business venture. While there are some success stories of individuals who have done so, it is not a wise option. No matter how positive you are about the business idea and its possibility of success, you should never give up on a steady income until the time is right.
As the business starts to grow and turn a profit, you can take the decision to leave your full-time job. At this point, you can focus your time on your baby. However, you are only able to do this, because you took the time to put on your oxygen mask first. Having that steady flow of income, whether with a full or part-time job is a great way to survive when starting a business.
Proper Financial Management
Another way to make sure that you are operating your business with your mask on first is to invest in good fiscal management. Doing so means that you focus on how much you’re spending and how much money goes into your business. It is not prudent to go around spending money without a plan. Focus on those things that you need to run your business efficiently and delay non-essential investments for later.
In time your company will reach a level capable of generating an income that will afford you the option of making different investments. With the right financial stability, you will be free to take the risk on non-essential investments. However, even when your business is profitable, it is important to manage the company’s finances the right way. Firstly, cover all the expenses for that month inclusive of paying yourself a fair salary. The balance should be re-invested in the business to facilitate growth.
Starting a new business can be challenging. There are many factors to consider to ensure success. Taking care of you first is one such factor. After all, as an entrepreneur, you represent a critical component of your business. If you fail to make sure that you are financially healthy, you could be setting up both your business and yourself for failure.
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