3 Reasons Why Running Out of Money Will Make You a Better Entrepreneur
Entrepreneur's New Year’s Guide
Until not too long ago, I made a healthy living as a medical device salesman. It was a job I loved and thought would be my sole source of income for the indefinite future -- until something happened.
That something occurred in late 2013, when one of my colleagues suffered a stroke at age 35. This caused me to take inventory of my life and ask the tough question, “What would happen to my family if something happened to me?” The next week, my company made a change to my commission structure and overnight my income was slashed by 40 percent. That was the final straw: I decided it was time to take control of my life and begin my entrepreneurial journey toward building passive income.
Since that time, I have watched my bank account dwindle as I've spent more than I've made month after month. As I write this, I have less than one month’s expenses remaining in the bank and am not sure when the bleeding will stop. In spite of the pain that my wife and I have experienced, I have learned there are three reasons why running out of money will make you a better entrepreneur.
1. You'll ask better questions, and get better answers.
As an entrepreneur you are going to experience extreme highs and extreme lows. When your back is up against the wall and the future of your business is in jeopardy, maintaining a positive attitude is not easy. During those challenging moments, you should pay attention to the questions you ask yourself. Instead of playing the victim and asking, “Why does this always happen to me?” choose to ask a more productive question like, “What lesson can I learn from this situation?”
Up until the moment I asked myself this question, I had not realized how lavish my lifestyle had become. Time and money were wasted on things that did not matter, and the things that were most important to me, like time with my family, often fell by the wayside.
By asking better questions, however, I was able to analyze what mattered most in my life and business and ensure that my most valuable resources were allocated appropriately. How can asking better questions make a difference for you?
2. You'll get back to the basics of what made you successful.
As you achieve more successes in your career, and things get comfortable, you tend to forget the little things that made you successful to begin with. One day you wake up and you're in trouble. In these moments, entrepreneurs often seek counsel from mentors.
When I was at my own lowest point, one of my mentors -- whom I'll call Dave -- suggested that if I were to change the way I looked at things, the things I looked at would change. I took this to heart, as he too had been down this road.
Dave had been very successful in business, becoming a millionaire before the age of 30 and a multimillionaire in his mid 30s, before his life spiraled out of control. Looking back, he realized he had stopped doing the things that made him successful to begin with. It took losing millions of dollars and almost losing his family to wake him up.
As I considered Dave’s history, I realized I was traveling down the same path. I had stopped doing the basic actions that made me successful. In that moment I felt very grateful that it had not taken losing millions of dollars and my family to arrive at this realization.
So, should things get rough in your own life, ask yourself, “Am I still taking the actions that made be successful to begin with?” You may realize that you got comfortable and lost your way. If so, it’s time to get back to the basics.
3. You are the problem, and hope is not a plan.
Looking in the mirror and evaluating yourself and your situation objectively is not something that comes naturally to most people. When you face adversity, you hope your situation will change. Unfortunately, hope is not a plan.
Last year, I spent more than I made every month, and never developed a plan to get back in the black. The sales were not rolling in as they used to and I did not have a plan to rebuild my funnel. I drifted from day to day hoping things would change, but they just got worse. Finally, it took a financial crisis to wake me up and force me to take action: to form a plan that would stop the financial bleeding and rebuild my sales funnel.
As an entrepreneur, you'll discover that one of your most admirable qualities is the ability to create something out of nothing. But the thing that holds you back from taking an idea from creation to fruition is often yourself. The best entrepreneurs recognize this fact when times get tough. Learn to drop your ego and look at yourself objectively. Where could you do better? Where are you falling short?
Got some answers? Now go put a plan in place and create the life you deserve.