Ray BinkowskiJust now·2 min read
Half of all businesses fail in the first 5 years. If you are a business owner or entrepreneur that should SCARE you! ?
There are two reasons for this time and capital.
1). Time… you have to be patient. Things do not happen overnight. You are going to have to be consistently work on and in your business for more than a few weeks.
Few businesses are overnight successes. They are a 5–10-year overnight success. Years are spent struggling day in and day out. One day, seemingly overnight they make it.
Little attention is paid to the years of struggle. Pop culture and the media make this worse.
Take the MTV Cribs show from years back. The artist, the mansion, cars and overall high life are all covered. Absent is the back story of what it took the artist to make that happen.
In sports look at Michael Jordan. He was cut from his varsity high school basketball team; he made the JV team. There is a tremendous story in this part of his basketball career, yet most attention is on the wins and championships.
It takes time and the willingness to keep going regardless of how many times you are knock down to be successful in business.
2). Being Undercapitalized. Not having enough money to run your operation will prevent you from being nimble and capitalizing on great opportunities.
Being undercapitalized means making decisions based on capital and NOT on what is BEST for the business.
Capital is the oxygen of the business.
Capital can be liquid in the form of cash parked in an account OR access to borrowed money in the form of a loan or line of credit.
Bottom line is without capital the business will die.
It is BEST for the business to have money in the bank well in advance of needing it. Having a line of credit set up before you need it is also BEST.
Authors Note: When I had my brick-and-mortar business for 12 years I maintained a line of credit. My commercial banker would ask every time it was up for renewal why I was keeping it if I did not need it. My answer “because if I come to you when I really need it, it will be much harder to get it on my terms.”
Spend the TIME working, hustling, and grinding in and on your business.
Be a GREAT steward of capital. Have cash in the bank and have access to financing.
Do these two things and your business will defy the odds and be open after 5 years.
?By Entrepreneurs for Entrepreneurs…?
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Ergoteknix Incorporated provides business development consulting to small businesses so they can scale from 6-7 and 7-8 figures in annual sales.