Don’t partner with someone who is broke

The way people treat their money is one of the most important traits in entrepreneurship.

Frugality wins because every dollar you save personally and invest in the company the right way becomes three dollars a few years later.

Having cash reserves because you live in a responsible way allows the company to survive when the going gets tough or the competition gets fierce. When the next recession hits the businesses with owners who live above their means will have the hardest time weathering the storm.

When looking for a partner make sure they have the same mindset as you do when it comes to money. Similar to a marriage it can lead to tension, arguments, resentment and failure if both partners are not on the same page.

Don’t partner with people who are broke. Broke people have a hard time planning 3-5 years down the road. They have to have short term goals to bring in cash because they are hungry and need that money to pay the mortgage. People who are broke are stressed and thus unable to perform. People who are broke need money from the business earlier than the business might be ready or able to provide.

An important distinction here – I’m not talking about a person from a poor or middle class family when I say broke. This is not about rich vs poor. This is not a socioeconomic status thing. Some “rich” people are horrible spenders and have never been taught the value of a dollar. I call those people broke. Avoid them.

The college friend who needs to call mom on friday night to pitch in for a case of beer. The grown adult with credit card debt and a shopping habit. Avoid these people. There is no excuse to ever be broke. If they can’t manage their own money you will never be happy with their ability to manage your money.

Successful entrepreneurs don’t have goals that are based around the things they will purchase when they make money. The flashy car. The boat. The vacations.

Successful entrepreneurs enjoy the ride and the process of building something. That is where they get their joy. Not by spending the cash that comes after success.

December 10, 2018 8:57 am