|I’m not proud of it. But my first business was … selling cigarettes to under-aged kids.|
This entrepreneurial dream didn’t last long as the principal of my school had actually gotten wind of what I was doing.
I packed up shop really, really, really quickly, but not before learning a lesson about business and profits that I’d never forget…
Once I’d shut up shop, I realized that I didn’t really have anything to show for it.
I got to the point I was like, “ah, I didn’t turn a profit.”
I’ve got nothing saved up towards my PlayStation or whatever else I was saving up for at the time!
What happened to all the profits?
I literally smoked them.
It got to the point where business was going so well, it was in the first week or so, that I thought I might have a cigarette out of my pile.
I’ve got so many, I’m selling so many, I’ve got so much money coming in.
I thought I would reward myself, plus I had a lot faithful friends so I had reward them too!
It turned out that most of what had come in I had actually used to buy my own cigarettes or giving out cigarettes to my friends, so I barely, truly, smoked up my profits.
So what’s the moral of the story… other than don’t sell cigarettes to school mates?
All this made me realize that, it’s a funny story, it’s a horrible story, but there’s a lesson to be learned here and that lesson is that, in any business you can get to the point where things are going so, so, so well, that you think why not reward yourself?
Why not go on holiday?
Why not take money out for this?
Why not shout this, that and the other?
It’s this illusion that we live that money keeps coming in and it’s just going to keep coming in, no matter what.
Similar to what happened to me, a lot of the time business owners get to that point where it’s like, I know I’ve got a bill due, I’ve got to make rent on this place that we’re in or whatever else, and you look back and there’s nothing to show.
You’ve smoked up all of your profits or you’ve gone and spent on all of these expenses and you’ve just got nothing to show for it.
The key is to protect your profits!
In our Cash Rich Business Workshops. We teach our business owners how to better manage their finances, how to put their profit first and take that chunk out well in advance before everything else goes out.
By taking a small percentage of every dollar that comes in and provisioning it to your “Profit War Chest”, you don’t end up at the end of the year and nothing to show!
Got a burning question about how you can increase your profit and build your own ‘Profit War Chest’?
Book in, to TEST DRIVE AN ACCOUNTANT – a 15 min rapid fire Q & A session with an Inspirational Accountant.