Can You Still Save Money if You're Starting a Business?by Kori Rodley Irons | More from this Blogger 02 Feb 2007 10:45 AM In reality, many people who start home businesses, do so at the risk of their savings. I know that I used up a big chunk of my reserves when I was launching my own home businesses and I've found my story is not at all unusual. Entrepreneurs are risk-takers by nature and it's certainly not uncommon to find that individuals save up, or take their savings and start a business. But, now that your business is up and running, how do you start building those saving back up? The first step is really to make saving a priority. It's tough--family is a priority and building your business is a priority, so how do you justify taking money away from the every-day cash flow and start socking it away again? It might help to start out small--a certain amount of money put away in an IRA (Individual Retirement Account) every month can give you a place to start--and it is removed enough that you won't be able to get to the money easily. I know one person who does things rather old-fashioned and still buys savings bonds--one every month no matter what. While this isn't very trendy, it is one very stable and persistent way to put a little money away regardless of what else is going on. It is tempting to invest everything in your business, or for what savings you do put away to be for your kids (college, for example), but the financial experts say that individuals need to save for themselves first. Having a retirement savings and/or plan, and putting away for the family's emergencies are more important than saving for a child's college, according to financial planners. And, with the risky precariousness of entrepreneurial start-ups, it is even more important to make sure there is something to fall back on. At the very minimum, it is a good idea to have a savings account and make a plan to put money away--even while you are building a business. Designate a certain amount, or a certain funding stream that just goes to the savings. You might be surprised how little time it takes to start to rebuild your reserves and have a little cushion or nest-egg--even while you're raising a family and building a business! See Also: Getting Comfortable Talking About Money So, How Much do you Make? Learn more about Kori Rodley Irons  Bio has been removed by administrator Relevanthome business tags User Comments  Salena (127) 04 Feb 2007 10:51 PMYes, but it's really, really REALLY hard and you can't DO ANYTHING for about 2 years WITH ANYONE ( no vacations, no extras for the kids etc)\ I have done it and I am still trying to find ways to cut money ( My hreat is currently at 59 degrees inside and it is -5 midwest outside. Wearing Lots of sweaters today), including lots of cutting costs. But I do keep about 2000-5400 in the bank. I will turn everything off and double my schedule if I drop below 2000. A bad month will kill you. rents25 (105) 20 Feb 2007 07:33 AMI think you're both on to something. First, you talk about making it a priority. We always devote ourselves to those things that are important to us...those things we've set up in our mind that have value. That doesn't mean they're necessarily valuable, just that we see them as having value (e.g. spending time watching American Idol might be denoted as "valuable" to us, but does little to help us become better, build our business or ourselves). Those things we denote as important are what command our attention, energy and resources. We must make sure that the "important" things are really the important things. I've heard it said "make the main thing the main thing.". Second, Salena is on to something by making failure more uncomfortable than success. When she's not successful, she makes the direction she's not going more painful or uncomfortable. That's a wonderful motivator capitalizing on the very basic principle that we always seek comfort over achievement. So, if you're not going the right direction, make the direction you want to go more desireable than the direction you're going. Brilliant. Bravo! Thanks for the reminder! Very helpful principles to remember!! rents25 (105) 20 Feb 2007 07:50 AMI might also add that when you're looking at business opportunities and ideas you may want to do, there's some basic considerations before you start the actual business: First, look at what you're passionate about. You'll never be successful at something you hate. Second, once you know your passion, look at opportunities that have unending potential to grow without requiring more and more and more time from you. Look at a business that you can teach others to do with you. This is one foundation of leadership...teaching others to do what you're doing. Third, look at overhead involved in operating the business on a daily basis. Look at everything from office supplies, product costs, time investment, return on investment. You'll want to select a business that has as low an operating overhead as possible to maximize your profit and minimize your risk. Lastly, although it seems risk is necessary to be entrepreneurial, it's not always financial resources that we need to risk. That simply is a myth. There are other resources we can risk. Find a company or a business that asks you to risk your time and invest in improving the lives of others as the risk. I prefer risking my time investing in others to help them be better as opposed to our finances to make my business better. Investing in people is always beneficial. Investing in businesses isn't. There are thousands that, while working hard and investing $$ in their business, still fail. They risked the wrong resource. Community Tags budgeting, planning, savings Discuss this article
|
Home Biz categories |
