Sure many successful entrepreneurs (myself included) will tell you how they've either maxed credit cards, over extended themselves, moved in with parents, sold cars, lived IN their cars, spent their entire life savings or 401k on their dream all in pursuit of their dream and destiny. Many of them took a gamble and won having built lasting profitable businesses and wealth. One of my clients successful built her company to 7 figures after being at the brink of bankruptcy, repossession, and financial ruin.
Entrepreneur.com list it's 25 Common Characteristics of Successful Entrepreneurs and these are all dead on many of them echo the traits needed such as "creating plan" to learning to work with integrity and so one, however there is one that is missing...
I'm adding #26 and making it #1, you MUST have a plan for how you will get your Personal Affairs in order. This means from your personal finances to improving your credit if it's challenged, to your relationships. It's no secret to successful entrepreneurs that your personal life (particularly for women) has a direct effect on your business. Taking risk in your business is a given and while I'm neither for or against risking it all (I'm more so on the "for" side) Ignoring your personal affairs can certainly lead to undue stress.
#1 Get Your Personal Affiars in order
From your relationships, drama, and finances. If you are Planning to risk it all you NEED to have a strategy! Failing to plan how you are going to navigate and survive or deal with a mate that is unsupportive or how you plan to manage your health care can mean the difference for some of success and failure.
While it is important to have a plan BEFORE you start your business. The reality is MOST of us won't, we'll fly out into entrepreneur land blind. Hey I'm not mad at you, I get it I'm with you 100% but at some point you must get some order to your personal life in order to reach the optimal success you want to achieve in your business life. I'll share more about my own personal story tomorrow, but for now here are some steps you must take now.
1. Pull your personal credit report and get an understanding of where you credit stands. If you have challenges you may not be able to fix them overnight, but get clear on where you are so you can make a plan.
2. Make sure your tax returns are filed or at least you have a strategy and plan in place and know where you stand with the IRS. The worse feeling is being on top of the world in your business and then BAM! You are hit with an audit on the personal side. See it with clients...you don't want this.
3. Get an Life Insurance policy for yourself and your family. Leaving a comfortable 9 to 5 where they (should) provide life insurance for you, many entrepreneurs simply don't think about this when whey start out on their own. Sure you want your business to be your insurance policy but be realistic. If you are a young person be sure to have a plan of how your family will survive if you become disabled.
4. Create a Will. I hope you didn't create your business but have no plan of how it will pass on after you? Create a will for how you plan to leave your business, or other assets. A living will may be good as well to cover how things should be governed should you become disabled and unable to care for your family or your business.
5. Create a salary for yourself in your pricing. If your fee for coaching is $100 an hour, make sure you know that about $75 is going to go just to cover expenses, pay insurance, travel etc. That leaves you with $25 an hour to live off. If this isn't going to be good for you, then maybe you need to increase your hourly rate to $150 or $200 an hour.
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Katrina M. Harrell is author of "Embrace.Your.Journey.: 180 Day Journey to Unlocking Your Wisdom, Redefining Your Success and Discovering Your Abundant Wealth" (The Sum of Her Publishing, 2011). President of the KM Harrell Group, LLC a Strategic Business Development & Management firm supporting minority and women-owned businesses. Her firm’s consulting services have helped many minority and women owned businesses establish foundational structures and exit strategies within their businesses that have aided them in selling for profit or obtaining investor funding. Passionate about entrepreneurship education, Katrina’s insight and expertise is highly sought after both online and off. She is also founding CEO for Your Simple Bookkeeper, outsourced national bookkeeping company for micro and small business.