What are all the ways you are going broke?
I’ll never forget looking at her Visa bill.
I was sitting in a business owner’s office. She knew that her business wasn’t right, and hadn’t been for a long time, but how bad was it? They were barely making money in the good months, and bleeding in the slow months, and this had been going on for several years.
Over the years she had gone through her credit line, pulled money out of her house, and now her credit cards were maxed. The minimum monthly payment on just her credit cards was more than $7,000/per month.
Even today, as I write this, that number stops my heart.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
~from Ernest Hemingway’s The Sun Also Rises.
I hope your business isn’t in this kind of condition financially — for most of you; it’s the opposite — you’re producing good cash. But that doesn’t mean you aren’t slowly going broke.
Where else are you in debt?
Financial debt isn’t the only thing that can be a massive burden on your business and your life. For example;
- For years I told my wife that we’d have time to take a vacation next year, but when next year came, I had to say to her, “it’s just not a good time right now.”
- How’s your health? Are you taking care of your body? Are you eating healthy food? Moving every day? Getting regular check-ups and dentist appointments?
- How are your friendships? Are your relationships with friends growing or withering? Who cares about you that doesn’t have anything to do with your business?
All of those things; time, money, friendships, family, relationships, they are all limited resources. When we run out of any one of them, it could stop — or at least substantially slow — our business and our life. They are all things that we can go into debt with for a short time — but it’s hard to know how deep the debt is until you have a crisis and find that your credit is all gone.
You can’t deficit spend forever. Eventually, the debt has to get paid back.
What are all the ways and places where you might be going broke?