Ralph’s Rulez: Going Back to Work?

Going Back to Work? It Happens to the Best of Us!

Over the years, many of my friends and colleagues have had challenges with their businesses – especially starting out! Including myself, many of the best of us have experienced:

– Cash flow problems.
– Some closed up never to try again.
– Some refinanced their homes to prop up the business.
– Some even downsized their homes to fund the business.
– Some thought that having a fantastic idea was all they needed.
– Some became disenchanted when clients were not interested.
– A few even went bankrupt.

Sound familiar?

It’s an easy mistake to make when we have all these dreams and they don’t work out. The important thing is to recognize the first (and arguably biggest point) is CASH FLOW PROBLEMS.  When this happens it’s not the end of the dream it’s just how we go about restoring it that counts.

Let’s talk CASH FLOW & work backwards (strange).

You have this cash problem and that has compounded in a disappointment spiral. So what do you do to fix the problem?  Here are some fine suggestions we have learnt over the years:

– Step back & analyse where you’re at.
– Talk to several experts in finance and study all their advice.
– Talk to several accountants and study their advice.
– Do you know any successful friends as their advice may also help?

This should make you realize that “The Correct Financial Structure” is more important than the product or business. Without that you have no business.

The Solution According to Ralph’s Rulez:
Go back to employment part or full time and work on the business after hours & weekends. This is not a sign of failure just overcoming problems on a temporary basis.

Just by changing your home repayments from Principle & Interest to interest only can free up operating cash to allow you to continue on with the business.

– Say your home loan is $300,000 @ 6% principle & Interest.
– Total monthly payment $1798.
– Change over to an Interest only loan for 3 years @ 6% interest only.
– Total monthly payment $1499.
– That’s $299/month toward helping you out for 3 years.

Now that were back on track (sort of) think of a bank account with high interest to use as a buffer/come lifeline account. This can be used for a raft of things:

– At least 1 years home payments.
– Insurance costs.
– At least 1 years lease payments if you need an office/factory.
– Replacement of tools/equipment etc

These are basic and you don’t have to hold off until you have $30k in the kitty just allocating some money every month (as per home payment) will surprise you how quickly this account will grow.

I trust this helps you out and remember, it’s not the end of the dream and many successful people go through quite a bit of failure till they find the success they deserve!