Entrepreneurs are a rare breed. We share an ability to focus amidst chaos and naysayers; we refuse to accept the status quo as “that’s just the way it is.” This strength of focus, though, can also be a weakness to your future. Too many entrepreneurs invest their entire worth into their business. This isn’t even putting all your eggs into one basket; it’s putting one egg into one basket.
I can already hear some readers saying, “C’mon, Clint, my business is my retirement,” or “I’ll do that later after I succeed,” or, my favorite, “I’ll retire when I’m dead.” Wrong, wrong and wrong – don’t invest for your future like the California condor – while they are the largest bird on North American soil, they only lay an egg every other year. Once the dominant force in the skies, they became extinct in the wild in 1987 with only two dozen or so of them still alive. Due to significant conservation and captive breeding efforts, there are over 400 California condors in the wild, according to a May 2014 National Park Service conservation status report.
Let me share just one of the simple disciplines that I’ve learned throughout my career and serving numerous entrepreneurs as clients that can bring multiple benefits to you and your quest. Begin setting money aside as soon as your business exceeds costs – even if it’s only a seemingly trivial amount to start. Right about now is when I normally hear potential clients disagree and say something like, “No way, you have to be all-in.” Yes, I agree that you have to be all-in with your energy and devotion, but investing in your future can start with a small step – it doesn’t take a big leap. This one step will not harm the mentality of “all-in.” Here are four ways to take small steps toward a more secure future:
- I can fit into these jeans again –Just as you are able to wear your skinnier clothes after you begin exercising, being able to set aside some gains can keep you and your team engaged by seeing results from the hard work.
- My kingdom for a horse –I often tell clients and advisors that emotions and investing are like drinking and driving – a terrible mix. The same can be said about emotions and decision making. Money, cash and financing are never as important as when you don’t have them. Having a safety-stash can be a calming factor and a lifeline during a rough patch. I’ve seen too many entrepreneurs give up significant stakes of their business out of desperation for money.
- If I had known then …There is no limit to the number of ways the best-laid plans can go awry, and just like that, a bustling business (retirement) can be gone. While nature provides a fallback plan for the California condor – condor parents lay another egg if the chick or egg is lost – investing for your future can provide a fallback plan.
- Guard rails –Have you ever had a lot of free time between appointments and done the “what the heck, we’ve got plenty of time” excursion, only to race to the next appointment because you got distracted? Excess money can sometimes be like that. It can spawn too many “hey, let’s try this” ideas that distract from the main. The dogmatic act of consistently saving money (i.e. payroll, monthly, etc.) can help entrepreneurs stay on the road to their goal.
Keeping everything you have invested in one business is literally putting one egg into one basket. While the reward could be substantial if that one egg is a blockbuster, the fallout could be disastrous. If your business runs into trouble, I doubt you’ll find help for your future as charitable as the rescue efforts for the California condor. In the end, there are a multitude of benefits for entrepreneurs to invest some of their cash flow aside from their business, several of which I mentioned above in the hopes of having more successful, self-sufficient entrepreneurs to lead the way.
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