Helping You Understand Your Financial Picture
Assistance in helping you to be a better Entrepreneur
Most people dream about being self employed and enjoying the benefits of setting their own schedule and pay. The reality of implementing that can be financially crushing and can cause a family to break up or conflicts to arise. I am a big fan of the show, Shark Tank. I love people coming in with a great idea and see how the sharks respond. One consistent factor I have recognized is that even though the idea might be great, if the business owner does not know his or her numbers, no deal is given. The business owner walks away kind of in a state of shock sometimes that he did not get an offer especially since his idea was amazing.
Having been self employed for most of adult life, I have learned some good business practices as well as some practices to avoid. According to Joshua Stowers at Business News Daily in June of 2022, there are five areas why most new businesses fail. The first is cash flow. Secondly, we feel we must do it all. Third, Sales and Marketing. Fourth, not having a big vision and finally, underpricing your product or services. When I was doing my undergrad abroad, we studied companies that failed and had to understand why they failed. One company was a quality wine company that wanted to provide quality wine at a very low cost. The packaging looked awesome and very upscale, and the price was lower than the cheapest wine out there. What we discovered was that when people saw the upscale bottle at the low price, they felt something was wrong with it being sold so low and then did not buy it. Simply, by increasing the price, the company was able to make a profit. Once they were able to maintain healthy profits, they then went on to open opportunities for other non-profits that they had a passion for.
As most people start out in business, they have a great idea and then want to sell it to the world. Sometimes they refinance their house and then quit their steady job to finance their dreams. They think that their idea will bring them in a large payday and don’t consider that now that they are paying out of pocket for health care that it can be the equivalent of a mortgage payment with very large deductibles. Even after the first year of making a profit, we don’t realize the impact of the self-employment tax is going to have on our overall finances. Many people who are self employed also do not have a 401K or pension set up for themselves. Is it really even possible in the United States to start your own business and make it in this world?
The simple answer is yes, but the challenging part is getting good advice on how to set your self up to win and not just play the game. One of the areas of assistance we provide is working along side of fellow business owners either helping them to launch or helping them to figure out ways to expand to the next level while maintaining financial and emotional health. Give us a call, we are ready to help you to the next step in your journey.
A person’s level of financial savvy can help them feel more in charge of their own finances and less stressed out about money matters, both of which are beneficial to their mental health.
On the other side, ineffective management of one’s finances can be a factor in the development of adverse mental health outcomes such as anxiety and depression.