Every entrepreneur has a startup budget in mind. They think they know what to expect for all costs- “there won’t be any unexpected expenses here!” GET REAL. The truth is that you will never know what your startup expenses will be in total. There will undoubtedly be things that creep up that you need, but you never knew you needed.
It’s like moving into your first apartment. You are like, “Okay, I have a couch, a microwave, a stereo, my toothbrush- I’m good!” Then you realize that you need groceries, and pots and pans, and a few dishes. Eventually you want to entertain someone so you are looking around for cleaning supplies, and maybe a few decorations. Oh, and don’t forget that your utility bills will suddenly show up and all of a sudden getting that 4G internet bundled with cable and premium channels doesn’t seem like such an awesome idea anymore. Why? Because all of this STUFF COSTS MONEY, and you just realized that you don’t have any…
Paychecks Start Rolling In
Okay, so you got past your bachelor pad, house-poor days. Great job! You finally have steady pay checks coming in and you are feeling great! But like many entrepreneurs that start getting steady cash flow, many people get a bit too overconfident at this stage. Maybe it’s the fact you finally have a positive balance in your savings account; maybe it’s because you no longer have to screen your bank account before going grocery shopping- whatever it is, it is a common problem and leads many entrepreneurs down a dangerous road of premature bankruptcy.
Don’t Blow Your Wad
I know it’s exciting to finally feel some success, but that success will vanish in a heartbeat if you start making it rain at the club every weekend. SAVE YOUR MONEY. Even if you paid most of your costs a year in advance, guess what? A year will fly by and those fees will be coming back around. Also, some items will have to be purchased monthly or quarterly. You MUST have funds available to pay these bills or you will lose these VITAL resources and ruin your credit simultaneously.
Patience is a Virtue
I often remind my children of this old saying. I’m not saying that there is anything wrong with enjoying some of your hard-earned profits from time to time, but be wise. You didn’t earn this money overnight, so don’t spend it that way. Also, take the time to balance your books and account for all of your expenses every month/quarter/half. Most entrepreneurs do not have financial officers at their disposal when they start out- but wait, you do! It’s YOU! Hit the books, balance your budget, reinvest a healthy percentage of your profits, and then go celebrate if you feel so inclined.
Just remember- in life there will always be hidden costs. Accept that now and prepare yourself for the future.