Finances

(Don’t) Fake it ‘Til You Make It’

Fake it until you make it! I heard this expression recently and many times in the past, but this time it made me cringe. Some might feel that there’s nothing wrong with showing people how successful and smart you are when you’re not really there yet. Here’s the problem and what to do instead:

It’s a Lie: If you just started your business and pretend that you are a huge success with your words or actions then that’s a lie. Don’t exaggerate your capabilities, the size of your business, or how long you have been in business. Would you want to do business with someone who lies to you?

It Hurts Financially: Purchasing a brand new piece of equipment, a very expensive vehicle, or renting a pricey office before you can afford to do so will put you in debt and cause a strain on your finances. This will actually reduce your chances of success in the future.

Damage to Your Reputation: A good reputation is one of the most valuable assets of your business. Why damage it before you even get off the ground?

Her are some alternatives:

Be Humble: Everyone has to start somewhere so start from where you are. Over time you can invest what you can realistically afford, including the “nicer things.” It’s amazing how much people are willing to help out their colleagues that need some help, and how customers appreciate authenticity. Many successful businesses have started from humble beginnings.

Get Better: Make yourself and your business better by investing time and reasonable sums of money to learn how to get better and more successful. Be creative and remember that bigger is not always better.

Be Honest: Don’t lie. This is self-explanatory.

Smart Ways to Cut Your Expenses

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A previous article was titled, “Don’t Cut Your Expenses,” and this time I am going to give examples of cutting expenses in a smart way.

Personal Expenses: With mortgage rates at record lows, now may be a good time to refinance your existing mortgage. You need to compare the savings with any upfront costs. If you can cut the length of the mortgage, this is the better way to go.

Delay major purchases, such as a new car or gigantic television. A car payment, along with insurance, gas, and maintenance can become a large percentage of a person’s income. If you can delay the purchase, you can save each month towards a larger down payment. The same applies to a TV, which should be paid for without having to use credit.

Business Expenses: Generally, if an expense can be reduced, without reducing quality or other necessary benefits, then it is worth investigating further. A perfect example is that you may be able to get a better deal by switching phone or Internet providers and save money.

Review insurance policies, such as health and liability coverage with your agent or broker. You want to make sure that you are receiving the coverage that you need with a good rate. As a caveat, make certain that you have the proper amounts and types of insurance so that you are covered adequately.

There are other advanced ways to save money and sometimes they even require upfront investments. This can include investments in technology, managing employees better, and even tax planning.

Ramp Up Your Knowledge with These Books

Reading books can be an extremely effective way of obtaining knowledge. A brand new book can be purchased for $20 or less and even less for a used book or an e-book. If you can borrow a book from the library then it’s free (accept for possible late fees)!

Here are some books that can help you to better your business, finances, and personal life:

The Seven Habits of Highly Effective People by Stephen R. Covey. The seven habits are principles and include habits such as “Put First Things First” and “Sharpen the Saw.” They are all simple habits, yet extremely powerful.

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko. This book compares the behaviors of people who accumulate wealth such as the type of cars they drive, which neighborhoods they live in, and other lifestyle habits.

Getting Things Done – The ABC’s of Time Management by Edwin C. Bliss. We all have the same limited amount of time each day, which is why we need to use it wisely. This book is filled with practical ways to use your time more effectively, and as a plus it is a quick read.

No B.S. Direct Marketing by Dan Kennedy. Small businesses need to market their business, but usually don’t know how. You will find examples of how to use direct marketing effectively to grow your business substantially.