Remember that money doesn’t bring happiness.
People with ten million dollars are no happier than those with nine million.
Irving R. Levine
Irving R. Levine was a financial reporter. That statement was tongue in cheek but when it came to money and finances, he was right on target.
Money can make the difference between a successful business and a failed one. That is why it is so important to create a feasibility plan when starting your new business. You need to know how much money you are going to need to start and operate your business during the first three years — and, just as important, where that money is coming from.
Are you going to be able to make a profit, break even, or is it looking more like a loss? What expenses will you have? What is your projected income (and be realistic)? This is not the time to let the “dreamer” side of you take control.
If you are going to be a one-person operation, can you reasonably put in enough hours to create the products or produce the services that will be required to make the income you are projecting? And don’t forget that a one-person operation has to do much more than just produce products and services. What about the time necessary for marketing? For billing? For ordering products? And for all the other parts of conducting a business.
If you’re starting or operating your business without any kind of financial plan, you’re playing Russian Roulette!
That is so very true, Sherry. Just having the money may make some people happy when they check their bank account and stock portfolio. But it is what you do with that money that can make a tremendous difference. I saw this morning that a combination of chemo and immune therapy creates a longer life expectancy for lung cancer patients than just chemo alone. But immune therapy is very expensive so having the money can make the difference there.
As far as business is concerned, having money to start a business is important as it is almost impossible to start a gift business with zero money. The more money you have the easier it is. But that can also work against you as if you have lots of money, you may fail to take the time to create a viable plan and instead just spend money. Needing to produce an income can also give one the incentive to be profitable.
Not about business, but thought it was interesting. A segment on CBS Sunday Morning 4/15/18:
So if spending money on stuff won’t make you happy, how should you spend it?
Harvard Business School professor Ashley Whillans and her colleagues handed out cash to two groups of people, telling one to go buy themselves something, and the other to pay someone to do a hated chore, like laundry. Guess who was happier?
“Even spending as little as $40 to buy ourselves out of a negative experience like cooking or cleaning can have significant benefits for people’s happiness,” Whillans said. “Participants who bought themselves time reported more joy, and less negative emotions.”
“So, money in fact can buy happiness if you spend it in the right way!” said Spencer.