You may be making more than a couple of these money mistakes! Sean breaks down common financial pitfalls for entrepreneurs.
You’re Mixing Company Money With Personal Money
Your staff sees you taking money from the company like your personal piggy bank and it kills your credibility. You shouldn’t do this.
You need to pay yourself a set amount as if you are an employee and then if the company does better at some point you can give yourself a bonus. This creates the ability to have a budget.
You’re Not Putting Away Tax Money
Pay an accountant for the one-hour it takes to figure this out. My account tells me his job is to do two things…”Keep you out of the gray area and keep you out of jail”.
You have to set money aside for taxes.
You Aren’t Creating Reserves
Many young entrepreneurs do not keep reserves. You need to put money in your reserves on a consistent basis. I don’t care if you start with 2%!
No Reinvestment
You need to reinvest you company, whether it’s in marketing, systems, or equipment.
You Overpay Yourself
This leads to making multiple mistakes on this list. It depletes your company and your reserves.
You Underpay Yourself
Find a fixed amount you can actually pay yourself! Why work if you’re not going to pay yourself?
You Rent Instead of Owning
If you’re going to be in a physical office space for over two yours, you really need to consider owning the property. Why? Because when things are bad, you can do things such as sell your company and rent the property back to the company.
Try to always own the ground under your building.
You Aren’t Investing In Yourself
As I’ve said, I’m not a fan of spending a bunch of money on ‘mastermind groups’. Spend no more than 5% investing in yourself every year and you’ll grow.
You’re Living Above Your Income
By so much that you have to rob your company…because you’re spending money on rolexes and cars and travel that you cannot actually afford.
Live well below your means for the first decade in business…then you’ll be able to live the next forty years like a king!
Don’t Invest In Things You Don’t Understand
This is why I didn’t invest in Crypto. I don’t understand it and it always seems to be crashing. I understand the stock market a lot better and historically it generates a return.
