Every year there are thousands of new businesses that are established by entrepreneurs all hoping to make it really big and become millionaires before they turn 30. Tragically, startups have a very high rate of failure and according to the Bureau of Labor Statistics, after 10 years, a mere 30% of new businesses survive. The reasons of business failure are many; a CBInsights poll of business owners reveals that the top reasons are lack of market potential, not enough cash, not having the right team, not being able to compete in the market, etc. What leaps out from the statistics is that 30% of entrepreneurs must be doing some things right for them to be able to carve out an enduring market presence and becoming wealthy in the process. It is also evident that apart from the traits possessed by successful entrepreneurs, they also seem to be able to manage their money differently. Some insights:
Successful Entrepreneurs Do Not Chase After Instant Gratification
Even though we all love instant gratification in every aspect of our lives, the really successful entrepreneur has his eyes set on the long-term. Of course, every entrepreneur will try every tactic in his book and more to ensure that he gets off to a flying start and is able to survive the tumultuous first few years, the truly successful ones also get their act together to make decisions that will have a direct impact on their future wealth. Typically, they are more likely to sacrifice immediate success and gratification if they can lay the foundation of a future that is more stable and successful. According to https://www.forbes.com, successful entrepreneurs never make the mistake of focusing on saving when they can easily earn more.
Successful Entrepreneurs Can Differentiate Between Needs and Wants
Even though there is sometimes a very thin line between needs and wants, the successful entrepreneur has the power to discern what is the essential difference between the two and focus on the essentials that will help them to address the needs of the marketplace in such a way that their business can benefit in both the short and the long run. Smart business owners never make the mistake of choosing a luxury when a more basic alternative could have sufficed. For example, buying a pickup truck for delivering to the sales outlets is a need but buying a fancy model that costs far more is a want that can prove costly.
Successful Entrepreneurs Invest Continuously
Right from the very early stages of the business, entrepreneurs who are in the investment mode rather than the spending mode are more likely to be sitting in the high chair while the rest are still searching ways to even out their cash flows. Investments can be varied; anything that generates income can be considered to be an investment. Entrepreneurs pouring in money into upgrading their production lines and introducing modern technology are as much investment-oriented as the one that takes stock of the debt that the business has taken on from various sources like credit cards and personal loans and decides to consolidate them to lower the interest expense. Smart investors also know that their objective of retiring as a millionaire when young cannot be met if they fritter away the money instead of ensuring that it fetches the best possible return.
Smart Entrepreneurs Understand How to Leverage Debt
Successful business owners know the nature of debt intimately. They understand how it can be taken advantage of if there are investment opportunities where the cost of the debt is below the rate of return on investment. They also know how to get rid of debt if the interest expense is bleeding the business. They have the ability to refinance their debt to take advantage of low rates of interest in multiple ways right from a simple credit card balance transfer to more complex refinance of an existing basket of debts using debt consolidation loans as a strategic weapon using reputed companies like nationaldebtreliefprograms.com.
Smart Business Owners Know the Advantage of Consolidating Debts
Typically, when a small business starts, it is more or less forced to use credit cards to finance most of its initial expenses. Unfortunately, credit cards carry some of the highest APRs in consumer loans that translate to a very heavy interest expense. Apart from this, the entrepreneur is unable to devote the time required to track each of the multiple credit cards being used and as a result of this, he tends to overlook the pay-by date of the minimum monthly dues. Consequently, the interest keeps on mounting and additionally, late payment penalties are also slapped on the account. Quite apart from the swelling card balance, there is a negative impact on the credit score too that makes other loans and commercial borrowing more difficult and expensive.
It is possible to slash down the interest expense by taking out a fresh debt consolidation loan with which, all the individual debts can be repaid leaving the entrepreneur only one loan of the same amount as that of the individual loans. Only one payment needs to be made every month. Typically, for entrepreneurs with a good credit score, the difference between the interest rate on the consolidation loan and the average APR of the credit cards can be quite significant. If the business is facing a cash crunch, the loan repayment can also be restructured at the same time by extending the period so that the monthly payment amount becomes more affordable.
The hallmark of a successful and smart entrepreneur is that he knows the value of a business opportunity. It does not take him long to spot any way by means of which, he can increase his business turnover, raise his profitability, grab market share, reduce expenses, take or reduce debt to provide more economical funding, and more. Successful entrepreneurs are extremely agile and have the competence to react to changing market conditions on the fly. They have the ability to set a goal and work towards achieving it in diverse ways. They are not afraid to make sacrifices in the short-term if the long-term benefit is substantial and enduring.