What is the use of credit if you don’t use it? In my mind, it’s nice to have the option to use credit in case you might need it in an emergency. The last thing I want to spend my precious life moments on is thinking about “where I stand” with my debts. I don’t want to spend my life thinking about how much I might owe creditors in five or ten years time. How about you?
What kinds of thoughts fill your mind throughout the day? Do you constantly think about your business in a never-ending stream of recurring rudimentary thoughts that loop around again and again?
The same problematic thoughts about how to make more, get more, do more, be more, more-more-more! Or are you free to think thoughts of innovation? How you can make your systems better, more robust? How to improve your processes – make them more streamlined? How to build better systems in order to free up more capital and lower your fixed costs. Are you able to make improvements to your existing systems to make things easier for your employees to get things done in record time?
If you can then you will free up some of your human capital and their capacity to focus on making your customer experience more awesome. You can get them more focused on going after new clients or customers. You’ll have more time to improve your staff’s skills and evaluate their situations quarterly or monthly instead of yearly.
Knowing where you and your business stand financially should be your primary driver and is much more important as you and your business mature than having to constantly worry about where your next big revenue stream will come from. Like the sands of time, there is enough daily uncertainty than to add to it by taking on too much debt thinking that your future income will be 50% higher than it is now. It’s very difficult to predict what your future motivations, desires or interests will be. Therefore, you want to avoid any situation that will tie you down to the grind of having to do the same thing you’ve always done but maybe not getting the same results. Keep your debt load as light as you possibly can during your growth phase and don’t try to bulldoze your way through the tough times by taking on debt in order to cover your fixed costs. Be smarter than that and be ready to pivot your business or remake your business plan to suit your current situation.
Why not keep your business in real-time fit shape with banks clamouring to give you more credit or loans at low interest and make sure you keep your limited liability company separate from anything you own personally.
The best insurance you can have is the personal security of knowing that if you need some extra money for your business you have it either in interest-bearing accounts or personal savings and a whole load of credit and debit facilities waiting for your use. Then when you use it be sure to stay disciplined and on course to pay it down or off according to your own pre-set payment terms.
Knowing where you stand is the best place be in order to keep your business healthy and live a carefree life.
Happy Knowing! Good Growing!