18 Dec How to start a new business without any worry. Do you have an ‘Expense Ballast’?
Do you worry about your business? Does your wife hate your business because you are always distracted?
Does your phone never stop? Are up till late invoicing to make sure you get enough to pay the staff. Are you avoiding your creditors?
Do you get behind with your invoicing or can’t sleep because of low business cash flow?
You need an ‘Expense Ballast‘!
This is one of the amazing ‘Six ‘B’s’ of consistent business’.
It may be difficult to pull off but you will be able to sleep at night, run a business and keep your family happy.
Here’s a true story of somebody with an ‘Expense Ballast’.
Jim (not his real name) is a business man I know who sleeps well at night.
Jim’s business has grown. He has had to treble the size of his staff to cope with the extra business, but Jim has a bad habit.
He puts off invoicing his clients for the work he does.
Jim sometimes goes weeks before he asks for the money owed to him for work completed. I told him he was crazy.
He said he was comfortable with this situation. Now I understand why.
What are the life changing effects of an ‘Expense Ballast’?
Jim sleeps well at night, because the thousands of dollars owed to him is the same as ‘money in the bank’.
He tells me the total amount outstanding is about three months of his business expenses.
Get an ‘Expense Ballast’ and take a holiday away from the business!
You can start a new business AND take holidays!
Jim sends me postcards from Hawaii, Fiji and other exotic locations. He is free to leave the business to go on holidays. How long is it since you’ve had a holiday?
Do you have a ballast of cash tucked away to see you through any unexpected economic shifts?
The key here is to develop a ‘new broke point’ using your ‘Expense Ballast’. Imagine having three months’ worth of your cash flow needs, tucked away in a separate account.
You never touch that cash.
You can call today’s working capital your ‘new broke point’. How would that cash ‘kitty’ make you feel about taking a holiday?
Starting a new business and keeping your partner on side.
What difference would this make to your marriage? Turn off your phone on Saturday night and not turn it on again till Monday morning?
(Quietly tell her you are now ‘turning off’ your business each week to focus on your family. Don’t make a big deal about it. Just say it to her.)
She will feel so much love for you that you will wonder why you hadn’t done this sooner!
“But Paul, I only have enough to pay wages and my expenses now. How could I stash that much money aside?” I hear you.
How do you build your own ‘Expense Ballast’?
You know the money you set aside to pay your GST (VAT). [You do set aside the 10% of each sale don’t you? You know it’s not your money.]
All you have to do is set aside an extra 5% of every sale. In less than six months you will have your ‘Expense Ballast‘ established.
This sets your new ‘broke point’.
N.B. Never touch your ‘Expense Ballast‘ unless there’s an economic depression or a serious medical emergency hits.
Now, the big question is – Will you actually DO it?
When will you go to the bank (you can do this online) and open a separate account and deposit 5% of your last sale?
Build your own ‘Expense Ballast‘. Your wife will love you for it.
Have you enjoyed hearing about the ‘expenses Ballast’? It is one of the ‘Six ‘B’s’ of consistent business’, system. Click here to find out about the other 5 ‘B’s of consistent business.