Whether you are starting a new venture or have been in the business game for years, you need to make sure your overbearing, diva-like ways don’t destroy your operation’s chances for success. Your flashy taste and inclination towards excess could literally ruin your fledgling business! It doesn’t have to be that way if you are smart about money on both the business and personal side of money.
How do you know if you are in danger of being an Entreprezilla? Check out your behaviors in a few categories:
This is the most common trait of Entreprezilla. Their level of living is so high that they must squeeze every dime out of the business to support their extravagant lifestyles. If you plan to go into a business for yourself, a good idea is to starting living on less now. It’s not a forever sacrifice. It’s a strategic move to give you more wiggle room and more staying power down the line. After all, many business owners end up calling it quits when they realize the business income isn’t enough to give them a comfortable lifestyle. Instead of adjusting their lifestyle, they usually jump ship. You can and should prepare for the eventuality of lower income at the outset of entreprenuership. This way, when the tough get’s going, you can weather the storm for a while if you have to. This may mean downgrading your car, taking in a roommate or cutting expenses in other areas. I found that when we got rid of all our debt, my database consulting firm was in a great position to grow. Since we didn’t need an absurd amount of money for mortgages, car notes or credit cards, I was free to take a smaller salary and put more money into my business. When I was bogged down with personal and business debt, this simply wasn’t an option. All the business income was siphoned away into oblivion. Sadness.
Just like personal expenses, any unnecessary excess here could be fatal to a new business as well. There are ways to justify most any business expense (trust me, I know.) The truth of the matter is that you need so much less to start and run businesses these days. Unless you are in a capital intensive industry like trucking or oil drilling, then you can start off leaner than ever. Even in businesses that require lots of start-up capital, technology makes it easy to rent or borrow excess capacity from other businesses as needed. Though you will have needs and the money will be pre-tax expenditures, do your best to get a good deal and keep spending low. If you need a food truck, could you buy used or rent one instead? With business spending, don’t always go for the gusto right away, because there’s always a reason to keep as much cash as you can in your business emergency fund. Without enough retained earnings to get you through cashflow bottlenecks (they will happen, believe me), you will crash and burn sooner than later.
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Cheap, Not Frugal
Not all Entreprezillas are spendthrifts. Some are excruciatingly miserly and tend to hurt their business in the long run. This can show up in always opting for the cheapest options. The candidate demanding the least money is not always the best hire. I have stories upon stories about this one. Personally having come from a few years of utter austerity during our debt repayment journey, I have to admit I am guilty of this one. I have a business that requires very little to run. If I have a good, powerful laptop and internet access, I’m good to go. I took this too far one day. I purchased a ChromeBook– a used ChromeBook at that. While it actually works very well for my little mini-me assistant (10 year-old daughter), it was a bad choice for me. The processing power wasn’t what I needed to run virtual meetings and perform complex tasks like video editing. Fail. I ended up later buying a MacBook Air. I am happy with this purchase, but it should have been my first pick. Sometimes being cheap can be really costly in the long run.
At the end of the day, an Entreprezilla really wants their way with everything. They want the high falutin’ lifestyle, business growth and good deals at once. I’m not saying these are all mutually exclusive, but there will be some compromise especially just starting out. Entrepreneurship is rewarding, but the sacrifices will be great, so great your average Entreprezilla can’t tough it out. Don’t let that be you!
What are some other tendencies of Entreprezillas?