The American Dream is alive and well in America.
America was founded on the hopes and dreams of millions of people crossing vast oceans to pursue a better life.
A better life.
As a father of four children, one of my biggest dreams is that my children will have a better life than I’ve had.
As I’ve reflected on my life, I see experiences that I wish I could have avoided, and I see experiences I’d love my children to experience.
Ultimately, I want my children to have lives that fulfill them and are meaningful.
I was fortunate to be introduced to the business world at the early age of 21.
I pursued a business opportunity that ended up being a huge failure.
I never made any money with this business.
It was painful to lose money.
The biggest reason for my failure in that business was I wasn’t good at sales.
I failed to attract enough people to my business to provide me with enough money.
I was shy at the time.
It was a painful challenge for me to gather enough gumption to share how my products provided solutions to potential customers.
The best thing that came out of that business was my eyes were opened to new ways of thinking.
Through that business failure, I saw the possibilities that business ownership could provide.
When I turned 24, I bought a commercial cleaning business.
This business made money and provided my young wife and me with a comfortable living.
This week I’ve had several phone calls with potential prospect clients
During my initial phone call with them, I like to learn about what they want to accomplish with their business.
Many of these business owners that I speak with are having challenges with money in their business.
In the eleven years, I’ve been in my current business, one of the most common things I hear from people is they wish their business made more money.
For many of them, money is tight.
There is a continual struggle of trying to figure out how to pay all the bills that come due.
When business owners experience a cash crunch, they find money in the following three sources:
- They loan the company money from personal savings
- They use credit cards
- They borrow money from banks or other lenders.
With the influx of cash, the business owners experience a sigh of relief.
The cash crunch has been relieved, and now they can breathe easy.
Or so they think.
The business owners have put the business owner in a precarious position.
Their business now must carry and repay debt.
Now the business must make more money in order to repay the debt.
By borrowing money, the business has kicked the can down the road.
Many times, when these businesses struggle with money, there are fundamental challenges with the business.
A lack of cash in the bank is always a symptom of a larger problem in the business.
Many times, when people share their business challenges they’re facing, they tell me that they have cash flow problems.
I always respond with the following statement.
“You don’t have a cash flow problem. You have a profit problem. If you had enough profit in your business, you would have enough cash in your business.”
The way to get more cash in your business is to increase the profits the business makes.
The lack of profit is caused when a business spends more money than it makes.
Most business owners that struggle with profitability in their business haven’t accurately identified all the expenses of their business.
Many times, they will have a good knowledge of the hard costs of labor, materials, and overhead in their business.
Those items are pretty easy to identify.
Employees and vendors want to get paid quickly.
Employees and vendors will only stay with a business as long as they get paid.
When the business stops paying employees and vendors, the employees and vendors quit.
Many times the employees and vendors are the squeaky wheels that get oiled first because it is so noisy and integral to continued business operations.
Without the vendors and employees, the business will have to shut its doors.
Consequently, business owners prioritize payment to employees and vendors above everyone else.
Month after month, the cycle repeats itself.
Money comes in the business.
Money goes out of the business.
Employees get paid, and vendors get paid.
However, there is one person that most often doesn’t get paid.
The most important person in the business is usually the last person to be rewarded for the blood, sweat, tears, sleepless nights, worry, and stress that person devotes to the business.
Without this person, the business would cease to exist.
This person is the inspiration and heart of the business.
This person put everything on the line to make a difference.
This person prioritizes the business above everything else in their life.
This person is often shortchanged for their devotion.
Many times, this person is living a life of quiet desperation.
This person sacrifices themself to the altar of the business.
This person is the business owner.
I know this person because I’ve been this person.
For two years I struggled launching a business during the Great Recession
Then in July 2010, I realized I had spent so much time robbing Peter to pay Paul that Peter died.
My back was against the wall.
I had maxed out my credit cards.
I had depleted my personal savings.
There were no additional sources of money.
If I didn’t make a monumental change, I was going to be forced to close my business.
I pondered and questioned myself, searching for a solution to the miserable hole I had dug myself into.
How was I going to salvage my business?
If I didn’t save my business, achieving the life of my dreams would be dashed into a million pieces.
As I continued to search for answers, a thought blared in my mind.
Damon, your business is failing because you are not paying yourself.
As soon as the thought came to my mind, I knew I had the solution to getting myself out of the whole.
I realized that if I couldn’t afford to pay myself at that point in my business, then I wouldn’t be able to afford to pay myself as my business grew.
By avoiding paying myself first, I had built my business on a shaky foundation.
On July 7, 2010, I started paying myself first, and it transformed my business.
The first step to the business of your dreams is to pay yourself first.