To Succeed, You Need to Treat Money With Respect

“If it is true that money talks, the only word we ever heard it say is: ‘Goodbye’.” – Anon.

Probably no other group of people understand the foregoing statement better than entrepreneurs – especially start-ups. With few exceptions, entrepreneurs often find themselves tormented with perpetual cash shortages, or outright outages.

This happens at various stages of their businesses, not just during the start-up phase.

That’s why a good number tend to experience prolonged periods of highs and lows, mainly due to cash limitations, which plague their enterprises. Those able to weather those storms emerge, often at a higher plane of achievement compared to others.

There is almost no suffering as painful as that arising from prolonged lack of access to cash.

James R. Cook rightly noted (in his book “The Startup Entrepreneur”) that many who failed in business, often quit trying due to the terrifying experience of lack of cash.

Yet, he also notes that there is a direct correlation between the degree of suffering a person goes through, and the eventual heights of success they achieve.

The greater the suffering, the greater the degree of successes achieved. Little wonder that history shows that many highly successful entrepreneurs endured great suffering arising from lack of money.

Does Running Short of Cash Mean an Entrepreneur is Incompetent?

Not necessarily.

Most businesses at some point or the other find they need cash infusion of some sort. Some may not need it at the start. But maybe due to rapid growth of demand, they might discover later on that they lack financial capacity to continue.

At that point, they’ll have to seek funding from outside sources.

For the solo entrepreneur, it often just happens. When you’re on your own, finding cash to meet all your business needs may not always be straight forward. Especially when your business is not yet fully established.

Unless you inherited wealth from a relative, or won the lottery, you’re likely to encounter shortage of funds every now and then.

But judging from results achieved by those who have passed that road, you need only take persistent intelligent action, with faith, to overcome it.

Is There a Way to Avoid Cash Shortages?

“No great enterprise will ever begin if all obstacles must first be overcome” – Napoleon Hill

As long as it does not occur because you mismanaged the little you have, I’d say no. Short of cutting corners anyway.

If my studies of the history of other entrepreneurs are anything to go by, it seems to be a necessary ingredient for success. In other words the repeated exposure to that potentially traumatizing experience is actually designed to teach us something.

Many highly successful entrepreneurs have attributed their success, in no small part, to the extreme cash shortages they had to endure and creatively overcome.

It made them think harder, and aim to maximize value they got for every unit of money they spent. They learnt to be frugal in their spending decisions. Without the lack of cash, the urge to do this, would most likely have been less.

“I have become thoroughly convinced that lack of money is just an excuse – and all the sage, expert advice about making certain your business is adequately capitalized is a bunch of hooey” – Dan Kennedy (Millionaire Entrepreneur/ Author of “How to succeed in Business by breaking all the rules”)

Tayo Solagbade’s note: For those of non-Americans who may not know what that strange word means, I checked the dictionary, and found that “hooey” is: “i.e. foolish talk or nonsense”…not surprisingly :-)) Get your copy of this book here.

Dan Kennedy pointed out that being adequately capitalized can actually be a curse. He added that having to struggle to find cash to make your business work will often be they key to your success. You simply need to mentally adjust yourself to it, instead of lamenting about it.

My Personal Experiences Confirm This

Yes. 31st December 2013 will make it 12 full years since I became an entrepreneur. During this time I have passed through countless heartbreaking struggles to achieve my entrepreneurial dream. That dream was hatched over 3 years before I quit my high paying job with Guinness Nigeria.

Looking back, I can tell you that my greatest periods of personal growth, and development, were those trying times when I ran out of cash, and/or had limited funds to work with.

**The thing is that experience (of shortage of cash) is rarely ever one-off.**

It goes away, and comes back again – the frequency seeming to differ for each person. Like Napoleon Hill said, it appears certain unseen forces use such unpleasant experiences to teach us lessons we badly need to learn.

Such periods of intense anxiety and suffering, caused by perpetual cash shortages, taught me to look inwards and seek low to zero cost ways to do anything. Before I decide to spend money, I make sure I exhaust possible alternative options to get it done without spending, or at a lower price.(And I help my clients to do this too – using custom Excel software I build for them).

This habit is deeply ingrained in me, because I have had times when I lamented spending in situations that I could have gotten something done free.

It’s why I’m taking my time in setting up my home based brew-pub products (e.g. my low cost pineapple peel based drinks and cakes – baked without oven).

Those who do not understand what this is about, have never experienced prolonged periods of lack of cash as severe as that described here.

Such an experience teaches you to treat money with respect!

“I lacked capital. Because of this I was forced to keep down overhead and watch every expenditure…In fact, I feel if I had had all the money I wanted when I founded my present business, it never would have become as big as it is. I would never have found it necessary to make such a close study of details to promote the efficiency of the organization.” – Harvey Firestone

1. What Happens If/When You Run Out of Cash?

2. Is Your Self-Confidence Directly Proportional to the Size of Your Bank Account?