The 10th Man’s Jared Dillian recently offered some perspective on two statements regarding personal finance that can also be applied to the health of your small business:
- You should save until it hurts.
- Money is meant to be enjoyed.
He takes these opposing, yet truthful statements, and identifies two extreme spending habits: the CFs (we’ll call them Cheap Friends, ha) and High Rollers. Neither is truly bad, depending on your actual financial wellbeing. For example, enjoying a more lavish lifestyle and spending freely when you don’t have anything in savings doesn’t make sense for your actual financial situation. And the other rings true as well, if you have seven figures saved, yet you’re still painstakingly cutting corners to save money, you’re not truly enjoying the fruits of your labor. While such centrism is detrimental, balance between the two is where your business can find the sweet spot.
In the beginning of your new business, it’s important to be a CF and bootstrap while you’re refining your product or service. As income improves you can evaluate the parts of you business that are not within your skill set, and contract them to a dedicated professional, like marketing, accounting, or administrative tasks. However, clinging to either disposition for too long can cause undue stress.