You've got the profits, and it's time to splurge because you deserve the enjoyment, right? But hold on a little bit, because in the words of the business tycoon, Aliko Dangote, there are ups and downs in business and you need to be very focused on investing back into your business especially when profit comes.
And this week on Money Mondays, we've curated three (3) money lessons that would help you thrive as a entrepreneur.
1. Develop a Sustainable Budget
The profits are in now, and you feel like it's time to "eat the labour of your hands". But something you should understand is that having the splurging mentality leads you into spending a lot more than is required.
Budgeting gives you a template on spending that you should follow even when the profits come in. Budget is not a word you should resent. The reality is that a budget tells you how to allocate your resources, and it should reflect your values (your NEEDS and not your wants).
And there's a trick for guilt-free spending, and that is creating a budget that has your long-term financial goals, short-term financial goals and your living expenses. And it even gets more interesting, you can create buckets or purses for your different goals. This way you are accountable and most certain where your money goes to.
2. Expand your Network
A person's ability to generate income and attract wealth is closely linked to how well he/she is able to grow and leverage his/her network to take advantage of opportunities.
The businesses or opportunities you will have access to will come from your ability to harness your network and learn how to to convert that network into opportunities because the more people you are able to reach and influence, the more likely you are to attract new businesses, gain access to partnerships and/or raise funding for your business.
3. THE BIG GAME: Investing
Financial success is not by how much you earn. The true measure of how wealthy you are is your ability to convert that income to assets that can provide you with an income in the future. And also ensure you note that the amount in investment is not the most important thing (it is certainly important though), what actually is the most important thing at an early stage is establishing your investment goals and devising an investment strategy that matches your goals. There is no one-size-fits-all approach to investing, everyone has different financial obligations, earning potentials and risk profiles. Different financial institutions and fintech platforms have investment plans and advices that you could check out and start your investing journey with.
As the first month in the second quarter ends, we hope you get really serious about upping your financial A-game as a business owner.
Gaining profits is a dream come true for entrepreneurs, but that's not the end of the road, reinvest in your business, take financial responsibility, and just maybe, one day you'll sit at the table with top African tycoons dishing out financial advices to young business owners too.
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