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Money Sense For The Home-Based Business Owner
By Laurie Hayes

Like many aspiring entrepreneurs, you
may have decided to break free of your
job to live your dream of working from
home.  You're ready to seize the
opportunity for freedom, unlimited earning potential and chance to live your life
exactly the way you want.

One of the biggest challenges you will face during the first two years will revolve
around cash flow and money management.

In order to give yourself the best chance possible of surviving the first two years so
you can thrive from that point on, it's imperative that you achieve mastery in five

1.        Gain control over your spending today

2.        Create a personal and business budget

3.        Increase your financial IQ

4.        Explore sources of capital

5.        Think like a successful business owner

First things first.

Gain control over your spending today - Honestly evaluate your spending habits
and identify where your money is going.  Are you living beyond your means and
buying things you don't really need?

In The Millionaire Next Door, by Thomas J. Stanley and William D. Danko, a focus
group interview of ten first generation millionaires revealed that most millionaires
don't own expensive clothes, watches or other status objects, and you won't find
them driving brand new luxury cars.

A millionaire Texan coined the expression, "Big Hat No Cattle" to illustrate the fact
that many people like to create the illusion of wealth by making extravagant
purchases yet have little to no financial wealth.

Many of these people are deep in debt and if they were to lose their jobs today,
wouldn't be able to survive three months on their savings.

Take control over unnecessary spending.  Do you NEED 50 pairs of shoes and a
matching purse for each?  Do you NEED a new vehicle every three years?  Before
making a purchase, ask yourself if it will contribute to your building a successful
business or take you further away from it.

Create a budget

Do you know how much money you're bringing in each month and how much is
going out?  Budgeting doesn't have to be unpleasant or difficult and if you don't
know where to begin, there are a multitude of helpful resources and articles on the
Internet to get you started at no cost.

Successful business owners understand the importance of a budget and follow it

If you have no interest or willingness to learn how to budget your money, business
ownership is not for you.

Increase your financial IQ

You don't have to become a financial genius or investment guru, but you do need to
have the basic skills.  You can access a helpful questionnaire at
Financial Intelligence
Questionnaire to help you measure your financial intelligence and identify areas
requiring attention.

Also, get your hands on the book
Rich Dad Poor Dad by Robert Kyosaki.

Explore Sources of Capital

The first year may require significant investment in equipment, education and
marketing and there's no guarantee your business will start making money right

Unless you have significant savings put aside for the start-up period, you will need
to explore alternate sources of capital.

Explore financing options through government programs, start-up loans, angel
investors, partnerships, friends and family, and although I don't recommend this one
unless you are proven financially responsible, credit cards.

Depending on your product or service, perhaps pre-selling to your clients and
customers would be feasible.  Suppliers might also provide the start-up money you

If you borrow money, even if from family or friends, always get agreements in
writing and make sure the loans are set up with proper security, terms and
conditions and a payment schedule.

Think and act like a business owner

When you transition from employee to entrepreneur, you will require a shift in your
thinking.  You will quickly discover that trying to get everything for free or at a
"deal" will actually hinder your success.

In the business world, you will be required to develop win-win relationships. If you
require something of someone, how will you help him in return?  Practice the Law of
Reciprocity which means, learn to give and take mutually.  In other words, when
someone gives you something, give something of equal value back.

Master these five areas and you will significantly increase your ability to succeed.

As you make financial decisions and begin to build your business ask yourself, "Is
this the best use of my money in terms of supporting my business?"  This evaluation
process will become second nature through practice and will support you in making
smart financial decisions.

About the author: Laurie Hayes, Director of The HBB Source™ helps self-directed
employees break free of their jobs to live their dream of running a home-based
business. To subscribe to her FREE e-zine for valuable tips, strategies and resources
to help you build your ideal business, visit
The HBB Source
Home Office here for your FREE subscription!
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