As useless as they may seem, your success hinges on pennies. Pennies are the bottom line of your business, and if you don’t got ‘em, you’re sunk.
Most wannabes focus on the top line, the magical millions that may as well be Monopoly money for all you can do with it. They rarely consider the true cost of doing business – the product, payroll, insurance, taxes, taxes, and taxes.
The top line is an inflated view of the health of a company. (They don’t call it “gross” for nothin’.) It doesn’t take in to account the expenses, the debt, and the stupid spending mistakes “millionaire” entrepreneurs make over and over again.
I’m tired of people bragging about their $5 million dollar company, when behind the scenes they’re losing their shirt. It’s like the fairy tale about the Emperor who insisted he was wearing the most beautiful clothes, when in fact he was as naked as a porn star. Don’t believe the hype. If superstar entrepreneurs don’t mind their pennies, their success is a fairy tale too.
A solid, healthy company is one that has enough revenue to run the business, and build up cash reserves. One of our TPE companies, Action Figure Woman refers to their reserves as “Blood Money,” because it’s there to provide the company with a “transfusion” of income in the case of emergency.
How many “multi-million dollar companies” have enough Blood Money to survive a crisis? Hardly any. (If you find one, send me an email. I want to meet the people behind it, because they’re probably TPEs.)
You’re only as good as your ability to bail yourself out. The people and companies that survived economic downturns, recessions, and full-on depressions are those that had enough Blood Money to weather the financial storm, paired with a resourceful nature that allowed them to pare down on expenses until it blew over.
Saving your pennies is not just about rainy days; it’s about transforming those pennies into dollars. Money can be leveraged to grow on its own. It’s a little something called interest, and you’d be amazed how fast your stockpile can grow. You may even end up with enough to pull out some profits for yourself.
Start minding your pennies today, the TPE way:
1. Get a Clue – How much do you really have to work with? What’s your bottom line? Go over your financials with a fine-toothed comb and find out how much you need and how much you have.
2. Get Real - How much would you need – bare bones – to weather a six-month financial crisis? How much do you have? Face the cold, hard facts about your cash reserves and then start shaving at least 5% off the top for your reserves – no matter what. You’ve got to start somewhere!
3. Get Help – Consult with a professional in order to make the most of your money. A finance expert can help you turn those pennies into dollars – millions of ‘em.
Pennies aren’t sexy, but they’ll save your ass. (But that doesn’t mean you have to stick ‘em up there. It’s just a video. Sheesh.)
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