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When we think of “fitness,” we regularly imagine bodybuilders in the gym attempting to bench press heavier weights. Or spinning classes, during which indoor cyclists pedal faster and faster to the rhythm of loud, pulsating music.
However, for entrepreneurs, there is a completely different kind of training with a completely different goal: financial health. That said, some financial fitness fundamentals can be in comparison with their physical fitness counterparts, especially when it involves starting a business.
Set intentions
A brand new yr, changes at work, and changes in life often prompt people to make exercise resolutions. In business, the intention to begin a latest business requires specific actions. The first step to flexing your entrepreneurial muscles is developing a solid foundation to begin your enterprise.
What exactly is bootstrap? The US Chamber of Commerce defines it as: “the technique of starting a business with only personal savings, including borrowed or invested funds from family or friends, in addition to proceeds from initial sales. Self-financed businesses do not rely on traditional financing methods similar to investor support, crowdfunding or bank loans. Rather, as the name suggests, entrepreneurs must “get back on their feet” by using their very own capital to launch.
This may sound as scary as the nautilus girth at the gym. However, even with a large variety of investors, the intention of any latest business is to begin and scale on a limited budget. The first thing that starting a latest business (e.g. trying out latest equipment at the gym) requires is a solid balance. For latest corporations this implies:
- Maintaining low operating costs
- Minimizing unnecessary purchases
- Maximizing your DIY chores
To keep your latest business growing while building your customer base and beginning to generate significant sales, you might want to complete many tasks yourself. For me, it was do-it-yourself, which meant learning latest things to enhance my decision-making and avoid unnecessary mistakes.
For example, although I had little or no experience in marketing, I learned the best business practices for my company and applied them myself. Over time, I managed to learn enough, often through trial and error, to grow to be an expert. I’ve learned that success comes when you focus on a good product and word of mouth, social media and social connections do the rest.
Focus on flexibility
Stretching is essential in any kind of exercise. However, it is mandatory to develop the financial resilience obligatory to manage with inevitable economic downturns in business.
In 2020, the world fell into wreck as tens of millions of companies across the country closed their doors. While many made it through this difficult time, many others didn’t. Research conducted on Sloan School of Business at MIT identified “three basic ways of managing uncertainty: resilience, local flexibility and portfolio flexibility.”
The sad fact is that based on Data evaluation the Bureau of Labor Statistics shows that over 18% of companies fail inside the first yr and 50% fail inside the first five years. For many, it’s because they have not included flexibility in their financial fitness program. We’ve found that managing expenses and mitigating risk is key to leveraging your capabilities and resources in difficult times.
I cannot emphasize this enough: you should find a way to diversify the services you provide to survive difficult times. For example, we refocused our restaurant strategy on delivery and optimized the delivery experience for our guests while everyone was at home and not wanting to go out. This was a key turning point for our business as on-site sales dropped significantly. We have also operated debt-free for three years and proceed to grow our business without incurring any debt.
Establish a routine
Just like physical fitness, when it involves financial fitness, you might want to establish a routine to achieve your goals and track your progress. For entrepreneurs, there are three key steps you can take:
1. Implement a budget tracking system
Always monitor your expenses. We track all COGS expenses, labor costs and marketing expenses by implementing software that provides us real-time data on our income and expenses. Each manager receives weekly reports on all expenses and forecasts/guidelines for the coming week to make sure optimal spending. Diversify your income streams to cut back your dependence on a single source.
2. Listen to your customers
Consider what other services you can provide to your customers. This will provide you with other income streams so you never have to rely on one source that might not be sustainable over time or in a downturn.
3. Build an emergency fund
An emergency fund is essential to deal with unexpected financial challenges. An emergency fund reduces the stress of emergency expenses. Contribute a small percentage of your monthly earnings to an emergency fund. Every month we put aside 15% for a rainy day to assist us weather the storm.
The most significant aspect of building an emergency fund is implementing a system of consistent payments. The US government hosts the Consumer Finance conference website which offers useful advice similar to “setting aside a certain amount of cash each day, week or pay period.”
4. Make physical fitness a part of your financial fitness program
Entrepreneurs can use their physical fitness as a business advantage. Exercise has been repeatedly proven to enhance cognitive function and creativity while reducing stress. And when times get tough, exercise helps entrepreneurs grow to be stronger.
Being physically fit takes motivation, dedication, information, and sweat. Similarly, increasing your financial health requires attitude, knowledge and special focus. The most significant thing to recollect is that to achieve any fitness goal, there are no shortcuts and there is no substitute for exertions.