Now! Or Later…?

I guess my thoughts on business debt could be condensed down into something quite simple.

Do you want “it” Now or Later?

And…

What long-term sacrifices are you willing to make just so you can get “it” right now?

Most individuals and companies would always choose now.

It’s human nature.

I used to choose “Right Freaking Now!” all the time.

I think most people would assume that now is always better than later.

Let me tell you why I think that’s stupid.

By using a Credit Card to fund a purchase of inventory for your business, you can buy that inventory RIGHT NOW.

And, why wouldn’t you want to buy inventory right now?

You can turn around and sell it more of it, more quickly. At least in theory.

But, what if you don’t have enough customers to purchase all of your new inventory that you borrowed money from a bank to purchase?

What if the inventory you purchased catches on fire, sinks on the Chinese ship is was headed over on, or you main sales channel suddenly stops working (Facebook ads for example).

What is some ingredient in your inventory is suddenly recognized to cause cancer?

What do you do then?

The bank doesn’t give a shit. They loaned you money and damnit, you’re gonna pay them back, and quickly.

Of course, living in the “What if…” mindset for your entire business life could be considered by many to be living in a paranoid state. I would agree to some extent.

But the point is this; do you want to risk your business, your family’s well-being and your relationships by “investing” in inventory using someone else’s money?

I can tell you from first hand experience that it’s not a good idea… Ask me how I know!

My wife won’t be so delicate in describing her distaste for my stupidity when it comes to borrowing money.

I think a lot of this “I WANT IT NOW!” has been reared it’s ugly head more often today due to:

1. It’s just human nature to want “it” now
2. Social media examples of friends, family and businesses “Crushing It” makes you feel the need to do the same
3. Unrealistic stories of businesses going from $0 in revenue to $800 fucking billion in 30 days (extreme example but you get the point)

I fell into the camp of all the above.

I wanted “it” now because I saw family members buying their second home.

…And here I was, poor little me who hasn’t even bought my FIRST home.

“What a loser I am”, I would tell myself.

This envy, if you want to call it that, caused me to make some really bad decisions in my business.

Not only was I trying to “get rich quick”, I was trying to use other people’s money to do it!

I thought I could spend my way out of any situation, using other people’s money.

So, before you think about charging something to the Credit Card or getting a loan from a bank, ask yourself “Do I really need to this in order for my business to survive?” Or “Am I doing this because I want X or Y to come to me more quickly?”

By using only the cash your business generates you are boxed in.

I think that sort of boxing in is a good thing.

That’s what most of the small businesses around the world do.

They only spend money or invest money when they actually have the stuff!

What a concept!

Unfortunately, it took me a while to learn that one on my own and has caused a considerable amount of difficulty not only in my business life but also my personal.

Spend only the money you truly have and it will be much easier to stay in business.