No business begins without a desire for more cash and it always ends with how much was made, or wasn’t made.
So then why isn’t the conversation within the startup and entrepreneur community more commonly hitting on topics of cash? Sure, we chatter on about how to set prices correctly and what new product to make to drive more profits – but what about the conversation where we get real about where we’re starting from?
Where you begin has an impact on where you’re going and how you get there.
Knowing the financial landscape from which you begin your journey and being aware of your surroundings as you make important moves and pivots is just smart. If you don’t know where you are, then how do you know where you’re going? Or – maybe more importantly - if you don’t know where you are then you might end up somewhere you never intended to be.
I know, I know. Financials are boring. It’s the stuff you want to glaze over because your idea, passion and drive to create far outshine the need for such mundanity.
But love, this boring stuff is necessary to get to the fun stuff and to avoid a whole lotta pain.
Look at it this way, flossing isn’t exactly a joyride but the prospect of a root canal is a decent enough motivating factor to go through the motions once a day. Right?
Think of your financials as floss for your business.
Here are a few key questions to answer that will help your proverbial teeth clean:
- How much do you need to make each month to cover your basic living expenses? And how much do you need to cover your ideal lifestyle?
- How much does it cost to run your business each month?
- How much could your business make, ideally (using your pipeline of prospects of both clients and products)? How much is it really making?
- How much do you have in savings and a) do you want to spend it on a portion of your living expenses or startup costs, and b) can you spend it? (Some monies, like those in a 401k, are not so easily accessible – for good reason. Or maybe your spouse says absolutely not.)
- What outside support do you have or can you count on should the bottom drop out?
To be a real rockstar, you’ll know these numbers before you begin to make any changes in your career or start any business.
Now, before you get too down on yourself for not knowing the answer to these questions, it isn’t completely your fault. In reality, hardly any of us take know the answer to these questions before we begin.
In a quick, very unscientific survey of online resources I found scanty information covering this topic in popular startup, solopreneur and entrepreneur spaces. Unless I was looking at Forbes.com or Entreprener.com, the conversation got pretty light.
So why don’t we start changing that right now? You and me.
>> Take 30 minutes this week and write out what your financial landscape looks like right now.
>> If you want to be ambitious, keep going. Write down where you want to be. Create a map for yourself. How will you get to where you want to go?
>> Feeling really cheeky? Create a budget for yourself and your business.
Here are a few fab resources to shore up on your financial smarts:
3 Financial Things You Need to Know Before You Start a Sidegig
Creative Entrepreneurship + Money Practices
Tracking: A Simple Method for Solopreneurs to Get Started in Financials