Do you know when you are self-employed,
you are the CEO of your own company?
Lessons to learn from this re-post from Loreena and Michael Yeo.
Running Your Small Business
I'm very debt-adversed. I rather go through child birth or root canal than to take on debt. I will never take on another debt in my life. Have I disclose how much I plan to avoid them yet?
One of the clearest take-away from the Dave Ramsey Entreleadership class is: DEBT (ie. Borrowed Money) BORROWED MONEY magnifies MISTAKES. That's the reality.
I've heard and seen many who take on home equity or credit card loans to grow or sustain their small businesses. Well, it's just not a very good idea.
Grow your business slowly and with cash. You don't need to be the next best thing in town tomorrow, or even next month. A good small business such as your real estate business may take a lifetime to grow. So, what's the hurry?
I went into the business part-time for 4 1/2 years. Granted if I knew what I know now, I wouldn't have waited so long, but I would still start the business part-time. I saved every penny I made in my business, socked it away to build a "war chest" for when I began full-time.
We never had consumer debt, other than the mortgage even when I worked PT. We feel comfortable and conservative to begin a small business this way. So, the "war chest" was entirely made for when I turn full-time and no constant paycheck to rely on.
At first, it was very scary. So, I took on a part-time engineering consulting job but that only lasted for 3 months because my business as a result of blogging slowly paid off.
That was more than 4 years ago. Today, my marketing strategies encompass blogging, Internet marketing, postcard mailing program and city community sponsorship events. It can incorporate the more expensive marketing strategies because there's no debt to pay.
When you spend your cash and operate on no debt, you're more careful with your money.
- Borrowed money increases risk
- Borrowed money magnifies mistakes
- Borrowed money hurts/ destroys cash flow
It requires tremendous patience to grow!!!
Dave Ramsey advised if a business already have debt, develop a 3-5 year strategy to eliminate debt by allocating a percentage of monthly profits to debt reduction.
In other words, when you dont have debt, you could allocate that money to take more home, or to increase in marketing expenses.
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Content & Photography Copyright © 2011 by Loreena Yeo (3:16 team REALTY)
Running Your Small Business Debt FREE