Entrepreneurs should never give up due to failure. Not just entrepreneurs, but people of whatever profession -all of us -should learn from our setbacks. We should never surrender to despair. ~Lucio Tan, a Chinese-Filipino Tycoon and one among Forbes.com List of World Billionaires for 2008
In my first attempt as an entrepreneur, I was a miserable failure. I ended up owing a lot of money from my suppliers and my business credibility was ruined. I never thought that I would be able to get out of that rut. Some of my colleagues said that the business was started on a bad timing (during the Asian economic flu). I belittled their comment because on the first year, I was doubling my net income every other month. It was not the timing nor the economic climate -I failed to manage my business’ finances correctly. In fact, my Chinese entrepreneur friend already forewarned me about this.
Money Lessons in Small Business
Unlike me, my friend was born with a silver spoon in his mouth. He’s a COO. Nah, not the corporate COO (Chief Operating Officer). He was the ‘COO’ (Child Of the Owner ^_^ ) . I used to work for his dad,while he was the EVP (Executive Vice President) then. I left them when I decided to put my own small business. When I told him about my plans, he shared to me the following basic money management principles in entrepreneurship that I should religiously adhere to:1. Never spend the money that you have not earned (or collected) yet;
2. Never hire people to replace the job you are doing so well unless your business has outgrown you;
3. lastly, pay yourself first.
Business Success and Failure
My business success on the first year was phenomenal. I exceeded my target revenue. But at the same time, I somehow ignored the wisdom of those three money management advices. I started using the money that I have not collected yet, with optimism (actually, more like a 'presumption') that sales turnover will continue to double every other month. I hired people who are not delivering my expectations. They were not doing the jobs I delegated them, especially the sales and marketing. Lastly, I never paid myself. I rolled out all the income I generated and only kept what I really needed. As you can see, those were the perfect ingredients for ‘business failure recipe.’I learned my lessons the hard (other) way.
What is our take?
When business is failing, or when our finances are drained, we tend to blame everything on the bad economy, without looking inwardly on a personal or corporate level. I believe, and as some economists do, that the collapse of some of theNow, more and more employees (those that are still employed) are seeking their own bailout through loans. I cannot blame them. It is easier, faster, and convenient. By comparison, saving and paying yourself first is painful and takes a lot of discipline. I know that a quick loan is badly needed –these are really crunch times. Nonetheless, whether you are an entrepreneur or an employee, it is always to your advantage if you live within your means, spend less and save more. I know, as history shows, good times will return soon. This economy will bounce back; and those who are resilient today, will enjoy it more .
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About the Author
Nor Franco is the Managing Director and Virtual CEO of nextManager.net. He's a former corporate executive whose passion is bringing out the full potential of HR in Businesses. This time that passion is pursued through Virtual Management. He writes and blogs about his management views and insights here. Follow him on Twitter.
