TechInAfrica – What defines the success of a startup? The keys don’t only lie between aggressive marketing or proper service delivery—despite these two matters significantly. Contrary to popular belief, what makes the most difference is the habits of the people behind it. That is, the startup entrepreneurs and corresponding stakeholders.
In manifesting a large, company-scale financial profit margin, one must first maintain wealth stems from smart personal-finance habits. Meaning, before you step further into the endless world of business and marketing, you must first apply that step to yourself. Many of the most successful entrepreneurs implement these steps, and now it’s your turn to do so:
Create a motivating list of money goals
Like having a budget, it’s important to set up clear money goals within certain periods of time. Writing down a list of financial goals and reviewing them each day will give you a clearer insight on what steps to take, what things to buy, and which ways you can earn more than you can spend.
This, being enforced to your business, can help you set a profitable path to the future.
Devise an action plan for spending and saving
Keeping an active plan for spending (and saving, retrospectively) can keep you from overspending on items you don’t actually need—and in return, keeping those impulsive shopping behaviors at bay. To achieve your wealth goals, you must track where your money is going, and will go to.
To this extent, Tom Popomaronis—a contributor for Entrepreneur—reached out to Spencer Barclay, founder and CEO of Savology. Barclay professed that one of the most fervent causes that promote entrepreneurial pitfalls is that simply people don’t track where their money is going. Whilst this may seem like a simple, irrelevant notion, this can also jeopardize our financial planning if left unguarded.
“Serious budgeting means planning ahead for how you will spend and save your money and then tracking every expense. When you are cognizant of your spending habits, it becomes much easier to keep them in check and contribute more to your savings goals,” Barclay concluded.
Reducing your expenses—such as cooking homemade food rather than buying a meal, cutting your internet or mobile usage, or simply taking the bus to work rather than commuting in your personal vehicle—can also help yourself to manage where your money is going. Alternatively, there’s a ton of money-management apps to download on your phone.
Diversify risk by generating new income streams
The book Rich Habits: The Daily Habits of Successful People by Tom Corley stated that 65 percent of self-made millionaires have at least three sources of income, whilst another 29 percent indulge themselves in five (or more) different income sources.
Okay, I know what you’re thinking—having more income sources means creating more revenue for those corresponding businesses and for their personal selves. But that’s not the entire point here. The significance of having multiple income streams are underlined by diversifying and lowering their personal financial risk.
What does this exactly mean? If one revenue stream is underperforming, you can still maintain a relatively stable financial management because the others aren’t likely to follow that trend also. Profitability can further be emphasized if this notion goes as expected, and the same can also be applied to your personal wallet; rather than your business alone.
Invest to create passive income
Okay, so now you’ve generated a stable income revenue. Where does that money go after you’ve paid your monthly bills? Most people would probably spend it on entertainment, fashion, or to buy things that they don’t actually need. But, for visionary entrepreneurs, those money will go into one or two investments for their own company. This can lead to further growth, and can also be implemented for your personal finances.
This passive income can also serve as a gateway to profit, rooting from the money you take home from the active income you earn during the day. Remember, passive income means you generate money even in your sleep—so don’t be afraid to invest!
Stay aware of the market
There have been a lot of startup failures just because they fail to realize what the market needs and wants. Pursuing on passion alone is good—but it can never make up to the trend if you don’t pay attention to the demands. The wealthiest entrepreneurs stay up-to-date within the newest market craze that could be of significance towards their current investments and their respective companies.
By staying aware of this, actions as simple as halting a product’s development or adjusting the price for service deliveries can prevent you from having major losses. Contrarily, being oblivious to the fluctuations of the market restricts you from preparing actions to protect your assets and potential profits.
All in all, these are the five habits of highly successful individuals who, thrive not only on their respective businesses, but also on their personal financial management. Within this, there’s a challenge to adapt to a new mindset and committing to new, out-of-the-box habits. Despite this demanding trial, the end result will be worth it. By taking full control of the way you use your money, you can grow your personal wealth while also increasing your startup’s chances for long-term success.