By Gustavo Cerbasi
Many entrepreneurs believe that, by building a business of their own, they have gained their financial independence. This illusion usually seal the death certificate of many companies before they even start their activities.
A company is not a source of money, but a means for you to make money by putting your strategy into practice. This production is the result of your work, if you act in the company, or its management, or in case you delegate the action. It could also be the result of your studies, if you only acted as an investor, the one whose job is to identify investment opportunities.
You will only be financially independent when your investments - or your company - are able to generate results without relying on your involvement 24 hours a day. Stand on your own two feet, as many people say. Forget, therefore, the myth that you have no boss. You work for yourself and you must be rigorous with your "employee". Your business is not an endless source of money, contrary to what the entrepreneurs who live sucking on results think, not worrying about expanding or strengthening their company against competition. This is another great trap. Your company is the biggest investment of your life. Like all investment, it requires money (reinvestment) and strategy to generate the best rewards.
When they are born, companies often lack the ideal capital to achieve success. This ideal capital consists of money to invest in infrastructure, resources for working capital for at least 12 months (in which time we learn what strategies and which people really should stay in the company) and also resources to sustain the entrepreneur's family during the time in which he does not think of taking profits from the business.
Working capital shortage, in most cases, because entrepreneurs use their own money to structure their business when they should turn to banks to finance tangible assets. Use your money in the emergency, not the opportunity. Or, to invest in people, not to buy things. The best strategy for getting good credit is to prove to banks and suppliers that we have money and that we are only consulting the feasibility of using theirs. Banks lend more easily and cheaper to those who need least. Suppliers offer more time limits to companies that do not tremble in crises. What determines whether or not the money will be available to your company is your previous experience and your ability to hold the reins. Take care, therefore, of your planning and your credit.
Gustavo Cerbasi (www.gustavocerbasi.com.br) is an specialist in Financial Intelligence. Follow him on Facebook (Gustavo Cerbasi Oficial), YouTube and on Instagram (@gustavocerbasi).