When you decide to become a Lone Wolf Entrepreneur, one of the things you are going to have to learn, and become very proficient at, is money management.
Not just for your business, but also for your personal finances.
Money is the key to the kingdom.
This is actually not that hard to do if a basic infrastructure is put in place.
It just takes a little planning, and a healthy dose of self-discipline.
In this article we will look at the basics you can put in place.
Let’s look at money management for solo entrepreneurs.
Work Out Your Living Expenses
This might sound really obvious, but hear me out.
This is really easy to do and will only take a few minutes.
Get a pen and paper.
Go through and note down all of your bills that you pay each month.
Rent, phone bill (Personal, not business line if you have one) electric, credit cards, car payment, etc.
If some fluctuate, such as power bills, then put an average number.
Get yourself a list with each amount next to each bill, and a grand total of all of them combined.
Include every bill that goes out, come rain or shine.
Next, work out how much you spend each month on things such as groceries, your coffee each morning, gas for your car, Friday night pizza, haircuts, etc.
Again, set a realistic amount that you spend each month on day to day living.
Create a list with totals, the same as the previous list for your bills.
These two grand totals are what you will need, per month, to exist at your current standard of living without a job.
Bear in mind, this is a post-tax number, so in reality, you need more coming in each month.
If you wish to become a sole/lone wolf entrepreneur and replace your job income in order to support yourself, this is what you need to be earning each and every month.
If your normal wage is $5k a month before taxes, then this is what your venture, or ventures, need to be producing.
Now, this may sound very obvious, but it is surprising how many budding entrepreneurs skip past this very simple and essential step.
They are often more focused on all the sports cars and vacations they will have once they become millionaires.
As I say in my book, “Learn to swim in swimming pools before you attempt to swim across oceans”
If you cannot create and manage a few grand per month, just how are you going to create, and manage, millions?
By having these numbers in front of you, you not only have a minimum target to attain each month, you also can see if your venture will actually work.
After all, if you cannot get your venture to keep a roof over your head, then just how is it going to put a mansion roof over your head?
This is not to be harsh.
Far from it.
I’m writing this so that new and aspiring entrepreneurs build a reality around them rather than a fantasy in their mind.
Once you have your base lifestyle covered, then you can build up from there.
Knowing These Numbers Will Save You From Disaster
A lot of starting entrepreneurs go into their venture full of confidence that their idea is going to pump millions out in short order.
In their mind, it’s a sure thing.
So long as they believe, then they shall achieve.
I can tell you now, your idea may be phenomenal and earn you millions.
But maybe not in the time frame you predict.
Most products and businesses take time to build up.
Word has to spread, and there is usually a tipping point where things begin to snowball.
But that tipping point may not be as soon as you think.
If you research some companies, brands, products, you will find that they took years to gain success.
Granted, once established, they became unstoppable.
But, before that tipping point, they had to manage their money extremely effectively.
For every success that happened quickly, there are many more that took time and effort to get rolling.
Though your idea may produce the money you predict, perhaps even more, it may not happen quickly.
In the meantime, you need the money for you and your venture to survive day to day living expenses.
If you know what they are, then you know what you need, and also what you can eliminate if need be.
Becoming financially independent of a job is becoming extremely important.
In this article, we look at why you should become a Lone Wolf Entrepreneur
Trim Excess Spending
Go through your list of day to day expenses, your morning coffee, Friday night pizza, etc.
Take a look and see where you are needlessly wasting money.
If you are spending $5 every morning on your special blend at the local coffee store, then you are spending an average of $150 per month just on coffee.
Over the year, 365 x $5 = $1825
You could take $50 and load up on coffee at your grocery store and replace that luxury, saving yourself $100 a month.
That $100 may be your next power bill if things get tight while you build your venture.
What is better?
Your power bill paid, or your morning iced coffee?
Some people will say, “I don’t have time in the morning to make coffee” or “It’s too much hassle making my own”
The simple answers to that are,
If you have time to go to the coffee shop, stand in line, order, wait for it to be made, etc, then you have time to make your own.
If doing the above routine is not too much hassle, then walking to your own kitchen should be a breeze.
The same can be said for snacks etc you grab during the day.
Grab a chocolate bar each day for $2?
$60 a month.
If you go down your list, it is quite possible you can save thousands of dollars per year.
These numbers may not seem like a big deal while you are dreaming of your millions.
But rest assured, if your venture takes time to produce, even your basic living expenses, then you will look back and wish you had those thousands in your bank as reserve.
Your business is the same way.
You should always keep track of every penny for tax reasons etc.
But, if you are spending money each month on things that are not producing results, then you may need to consider trimming the fact on those also.
If you are spending money on pay per click ads and getting very low results compared to your social media posts, then why waste the money?
Either trim it, replace the method, or eliminate the expenditure altogether.
Enforce Self Discipline On Your Spending
The above exercise is extremely simple, and extremely effective.
The key is to enforce self-discipline on yourself.
If you are wasting money on chocolate bars, then simply stop.
If your answer is “I can’t, it’s too hard”
Then right there is the obstacle that is preventing you from stopping.
If you believe it’s too hard and you can’t, then you are the reason it’s too hard and you can’t.
Nothing else is stopping you, but your own mindset.
Change that mindset to “I’m done with wasting money buying those each day” and that is the result you will get.
It really is that simple.
If you know that you tend to go out each Friday and waste money getting trashed at the bar, then simply stop.
The money you waste doing that could be left in reserve to keep the roof over your head while your venture matures, or it could even be put into your venture.
If your answer is, “well I enjoy getting trashed at the bar and I use it to unwind”
Well, getting trashed at the bar is more of a priority in your mind than building your business or securing your cash reserves.
It’s that simple.
A quick change in mindset can change it there and then.
Self-discipline is an essential core trait of anyone wishing to be successful as a solo entrepreneur.
Tracking and exercising self-discipline on your spending will potentially save you from disaster.
If your venture takes time to produce the minimum results to pay for your day to day living, then at least you have your reserves to fall back on.
The more your minimize waste, the longer your reserves will last, and the longer you have to give your venture to start producing.
If you are keeping track, you can always be ready to adjust your spending ahead of any potential self-inflicted shortages.
In my book, I go into detail on money management and also the traits and mindset needed to be successful as a solo entrepreneur.
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In any aspect of life, your mindset will heavily influence, if not determine, your results.
As a Lone Wolf Entrepreneur, it is crucial that you maintain the best mindset possible at all times.
In this article, we will look at how if you can control your mindset, you can control your life.
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