The One Thing I Wish I Had Before My $110 Million Business Collapsed

Most of us heard the story of the entrepreneur who bets. They loaded their credit cards maximized, entered their homes and poured each dollar in their work. It is the type of narrative in books and podcasts.

I lived that story. I often shared my growing up to $ 110 million from my work from Amazon to $ 110 million. Unfortunately, Amazon eventually launched an opponent who closed my work.

Although this experiment learns valuable lessons, deep sensitivity without crushing anxiety, sleepless nights and financial security network is rarely discussed. Often, the “Get-Brok-Broke” mindset is recorded, but it can cause personal fragile. The spirit of entrepreneurial freedom is not just to build a profitable business; This is preparing to be a castle that protects you from the inevitable variability.

This is where the “sleep in the night”.

I am not just talking about an emergency stock here. This is a strategic asset that offers a recollection of the lags, allows you to make informed decisions and reduces the risk of being obliged. In other words, it is the difference between reacting to the crisis and responding calmly and intentionally.

Let’s explore why this funds are not discussed and how to build them for all entrepreneurs.

Related: Did you hit a lot of money in the ambulance fund?

Variability Paradox: High Revenue, High Risk

While entrepreneurs earn more than their salary colleagues, the income is less predictable and irregular. As a job is growing up and falls, so it is an institution’s finance. After a powerful quarter, you can watch lean income in months, especially when profit is re-invested.

In addition to delayed customer payments, the permanent pressure covering surprise costs and operating costs can be a guess game. If a business owner is not able to provide a continuous income, even an evolving business can be sensitive. Therefore, a “night of sleep” is important. With this, you can direct the inevitable variability without panic and setting a job instead of creeping for cash.

Related: 6 ways to make market volatility a consistent gain

What ‘Night Dream’ Foundation (and not)

Specially designed to pay for your living expenses, the “Sleep” Foundation is a liquid money separate from your work accounts. This is:

• Your personal security network. If your work is a rough patch, you have to meet the important needs of a mortgage, groceries and family.
• Strategic assets. You can make strategic work decisions without feeling helpless. As a result, you will not be forced to take a bad debt to pay your expenses if you are late for a customer’s payment or deal.
• Psychological buffer. This gives you a deep sense of peace. Why? When you know that your family is protected, you can pay attention to your business and yourself.

This is not:

• Business capital. You should not use this background to pay your employees, buy new equipment or investing in marketing. This is the operating capital of your business.
• You are a long-term investment fund. This is not a growth fund that invests in shares, cryptopy or other assets. Instead of paying attention to high income, liquidity and security, it must be the main goal.
• “Fun money” account. This is a serious reserve. Think to pay for yourself to pay for directive costs; However, this stock is designed only for emergencies.

The crushing value of the lack of fund

If there is no “night’s sleep,” the domino effect of negative consequences begins to occur in a relatively quickly.

Forcibly decisions and bad deals

The more money you have, you have less conversation power. Now you need to take a customer at low levels, you should take partner or accept the terms of inconvenient financing with someone you don’t trust. If this happens, your business culture can be poisoned and you will regret to come for a long time.

Increased debt and financial stress

As medical documents or home repair, you can force high-interest loans such as unexpected personal expenses, credit cards or individual loans. In addition to exceeding your wealth, this debt also adds another stress layer by distracting you from your work.

Psychological payment

Being an entrepreneur is hard enough without worrying about your financial situation. After all, 87.7% of entrepreneurs are fighting at least one mental health problem. More than 30% of the survey participants of the founders were reported by concern, high stress, financial anxiety, burning and handling syndrome.

When you live outside, you can live a loss of burning, depression and passion. If you are in constant survival mode, it is difficult to be creative and strategic. Everything in your life becomes difficult. Be a good partner or spouse? Forget. Excellent, entertaining, engaged father (or mother), forget. Toll is high!

Related: How can businesses fight with financial instability

How to build your ‘Night Sleepless’ Fund

There is a method to build this fund. You need the same order to create your business.

Step 1: Calculate your personal “runway

The first step is to accurately define your monthly individual costs. These include mortgages or rent, utilities, insurance, grocers and minimum debt payments. Add this number to the number of months you want to cover and multiply this number.

Ideally, you should start worth 6-12 months of expenses. As a result, you will have a lot of time for Pivot, you will have a lot of time to get to know new ideas or to get a hard market without a grass.

Step 2: Automate your contributions

In the same way, you need to automate a paid in the way you get a paid from your work. You must take into account this contribution to be a discussable cost. Be consistent if you have to start a small. With time, you want to develop a habit that becomes an important precaution.

Step 3: Choose the correct account

The “Sleep” Foundation must be liquid and reliable. This is not an investment account. The best place for this stock? A highly profitable savings account. With this, your money is safe, can be easily obtained and you can earn a little interest without any market risk.

Step 4: Protect the Foundation

Creating a stock is just the beginning. You must also remain faithful to keep this fund. If you need to use a little money from your fund for a true emergency, fill it as soon as possible. By doing this, you will always have a security network when you need it.

Outside the Emergency Fund: Strategic Preference

There is more to “night sleep” than financial security only; Is a competitive advantage.

• The power to say “No”. When your personal financial situation is in order, it is easier to say “no” to problem transactions and toxic customers. This allows you to protect yourself, values ​​and reputation of your work.
• Freedom to innovate. Often, the most important innovations are practiced and risk. With a solid financial basis, you can take the risks calculated with new products or services without fear of violating your financial situation.
• Better negotiations. The contract, partnership or credit line is your largest asset while talking to confidence. If you know you will soon need cash, you are in a stronger position and you can discuss better conditions.

Related: How I taught myself financial literacy – and how you can

Final Thoughts: True Wealth is Freedom

Despite its power, the founder of the hero risk the founder often distorted the fact that real success is often visible. This is not about a high appraisal or a great speech that determines the success; This is going to be able to build a life that suits you.

You can achieve this freedom “Night Dream” Foundation. This prevents you from being separate from your daily struggles. It is the best investment you can do for yourself, your family and career in a long time. So stop romanticizing financial fragility. Start building the rest instead. As a result, your future will be grateful for yourself and your dream quality.

Most of us heard the story of the entrepreneur who bets. They loaded their credit cards maximized, entered their homes and poured each dollar in their work. It is the type of narrative in books and podcasts.

I lived that story. I often shared my growing up to $ 110 million from my work from Amazon to $ 110 million. Unfortunately, Amazon eventually launched an opponent who closed my work.

Although this experiment learns valuable lessons, deep sensitivity without crushing anxiety, sleepless nights and financial security network is rarely discussed. Often, the “Get-Brok-Broke” mindset is recorded, but it can cause personal fragile. The spirit of entrepreneurial freedom is not just to build a profitable business; This is preparing to be a castle that protects you from the inevitable variability.