If you have missed previous article you can click here: Part one, Part two, Part three
#5 I need a business loan to keep my company running
This is the pitfall where businesses fail. Over the years, I have witnessed this situation repeat itself over and over again. Either the start up company is borrowing way too much money or it didn’t plan out the financial budget properly which would end up running out of cash quickly. There is time and place for business loans. When you are ready to expand to much bigger operation and you have solid track record of positive number in monthly sales for at least 6 months but you may not have enough capital to expand then yes business loan is good an idea. Because you have already evaluated the budget, project future sales, and market is ready for your expansion. I have encountered so many times where the business owners are borrowing money from the bank just to keep company alive and paying the staff. Look, there is a chance your company can come back from this if you have little more cash flow but in the most situations, it doesn’t. It is not the type of risk or chance I recommend anyone to take. I know it is hard to hear. It is better for you not to make that 10k or 100k debt mistake. First of all, if there is something significantly wrong going on in your business: it can be your marketing, finance/budgeting, or/and management, which results in business having no positive cash flow coming in. You will have a big hole in your operation that is draining money every month.
Tip #3 Cut the fat.
Cut the fat, re-adjust the budget and work your ass off to bring in more sales. First of all, you need find your operation black hole where you are leaking money every month, that is why having an accountant who goes through your books every month is very important.
My words for you:
Look, starting your own practice is scary and it is hard. If it is not hard it only means you are not trying hard enough. Make sure you have a group of people who either have similar experiences like yours or who have owned a business. It always makes me laugh when someone clearly hasn’t own or started any business and claim they are the business coaches or business gurus. How could they be qualified to give out any advice or wisdom when they never experienced the stress and responsibility of being a business owner?
The road of an entrepreneur is lonely and often misunderstood. It is not as glamours as a private jet, fancy business trips, and/or business meetings at five start hotel. I think the social media is giving all the fresh start ups a false belief that entrepreneurship is all about freedom, luxury, and just being fancy. Yes you can get all this but not without some hard work and effort. I think most of us who are sharing our journeys as being entrepreneurs don’t really show the dirty work behind the scenes but not showing doesn’t mean it doesn’t exist. My first year of starting up my own business I was working everyday more than I ever did. I was constantly brain storming, creating, and planning for the next move; constantly under the pressure of failing. I often get very emotional when I talk about this subject of business consultancy/ life coach for start ups. It is such scary slope to get someone who has never ever had gone through the struggle of owning a business and building it up from absolutely nothing to something. Then these people are giving you advice about building up your own business. For these people, I think that clearly there is a lack of responsibility and integrity to just gain few quick dollars to seriously screw up someone else. If you are planning to engage a business consultant or a coach, if this person has no track record of owning his/her business and successfully made it in industry, please approach with great scepticism.
I hope you do enjoy reading this type of article and I am working towards sharing more practical issues in regards of the ground work behind the business.
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