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5 Mistakes Millennial Entrepreneurs Make With Money

I’ve seen too many start-ups die because the founders blew the money. Here’s how your start-up can avoid becoming the next victim.

Andrew Medal

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Building a new company isn’t easy. Only a fraction of the start-ups founded each year survive for five years, and even fewer are run by young entrepreneurs. Business leaders who have experience running companies tend to be more likely to found a successful start-up than first-timers – which many millennials are.

That being said, there are some advantages to being a millennial entrepreneur. The generation is known for having innovative ideas, drive and spirit, all factors that can contribute to building a successful company. The trick is to avoid being among the 24 percent of failed start-ups that crashed due to running out of money.

Here are some mistakes to avoid, so that you don’t become just another statistic.

1Managing cash flow poorly

The amount of cash moving in and out of a startup needs to be managed extremely well, especially early on. According to the Association of Chartered Certified Accountants, 82 percent of businesses fail due to not paying attention to cash flow. Unfortunately, a lot of millennials aren’t financially savvy, making cash flow management a significant liability for a millennial-run business.

To avoid this mistake, you just need to pay attention to what’s going on with your finances. Look at where all income comes from and how it’s all spent. Set up a system – as simple as an Excel document – to keep track of everything. If you don’t, you leave yourself open to issues such as not knowing profit margins, not having the records necessary to get investors or unnoticed theft.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

2Fundraising too much, too soon

It can be easy to spend a lot of time planning how to raise money from investors and venture capital firms early on in a start-up. A lot of young entrepreneurs consider the amount of money raised at the beginning a measure of success. Focusing too much on fundraising, however, can be bad for business.

Spending all of your precious time and energy on generating as much funding as possible can take you away from other, more important tasks. For instance, instead of setting up solid business strategies and planning thorough marketing pushes, millennials can get caught up in the fundraising game.

Keep in mind that with the right planning, your business will make money.

If your business makes money, you can run your startup with minimal outside control or ownership. That’s often a lot more valuable than some cash in your pocket at the starting gate.

3Trying to control it all

It’s very common for young start-up leaders to try to control everything because they feel they are the only ones who know their products, services and business plans inside and out. However, along with the risk of burnout, taking over all aspects of your financial planning can hurt your success.

Due to the relative inexperience of many millennial entrepreneurs, it’s usually a good idea to get advice and input on your financial strategies – whether that’s from an accountant, a financial planner or a friendly neighbourhood business person with an eye for finances. If you don’t, you run the risk of making inadvisable financial decisions that could tank your start-up.

Another option is to hire a person or team to help out. As long as you make your vision clear, outside help can save your bank account and your sanity.

Related: 9 Top Tips For Young Entrepreneurs

4Hiring the wrong people

staff members

It’s important to hire a team that will have your back and occasionally save you from yourself, but hiring weak team members can quickly drain your finances and ruin your startup. Be conscious of whom you’re hiring and any assets and liabilities they bring with them.

The costs associated with hiring the wrong people are significant. Not only are you paying their salaries, you also must pay for training, recruitment and other related expenses. Further, weak employees result in lost productivity and sales. If you aren’t getting a return on your investment, then what’s the point?

With this risk, it can be tempting to hire low-cost employees and consultants. Don’t fall into this trap – you’ll often pay for it in the long run, as they can be inexperienced or unreliable, costing you more later on.

5Spending in the wrong places

Millennials are an idealistic generation, there’s no doubt about it. As great as this characteristic can be for coming up with innovative ideas for start-ups, it can also get in the way of practicality. For instance, many young entrepreneurs spend too much money on developing their new product or service, and not enough marketing it.

Related: 8 Reasons Young Entrepreneurs, or the Young at Heart, Lead the Way

If you spend all of your time and finances on trying to perfect a prototype without getting out in the field and selling it, you lose out on several advantages such as customer feedback, users and acquisitions. You will waste time that you could spend interacting with your customer base and learning what they really want.

There’s no reason that millennials can’t found successful start-ups. With the drive and spirit of this generation, innovation is limitless. By avoiding financial pitfalls, young entrepreneurs can put their big ideas into action.

This article was originally posted here on Entrepreneur.com.

Andrew Medal is the founder and CEO of creative agency Agent Beta, which fuses together clever and creative design with advanced technology to help companies and brands thrive. He recently published his first book, Hacking the Valley. Follow his personal blog at AndrewMedal.com where you'll find life advice, inspiration and entertainment.

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Personal Finance

7 Steps To Achieve Financial Freedom

Achieving financial freedom doesn’t necessarily mean becoming filthy rich – not that that hurts.

Brian Tracy

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In this video, Entrepreneur Network partner Brian Tracy explains the seven steps you need to take to achieve financial freedom. Now, financial freedom doesn’t mean becoming filthy rich – lottery winners go bankrupt all the time. Instead, financial freedom is about becoming disciplined and using your money in a way that ensures you can live the sort of life you want both now and in the future.

Related: 5 Qualities Of Successful Entrepreneurs

That’s why the first step isn’t about getting a lot of money. Instead, it’s about teaching yourself to think positively about money. That way, you’ll be in the right mindset to move forward.

Click play to learn more.

This article was originally posted here on Entrepreneur.com.

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4 Ways To Become A Millionaire Even When You Start With Little

It costs nothing to take advantage of the limitless opportunities online.

Timothy Sykes

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The hardest part of becoming successful is getting started to begin with. But despite the challenges ahead of you, there’s a way to become a millionaire when starting with little. I’m going to show you four reasons why you can become a millionaire with just a small investment.

1First focus on learning, not big gain

Education is your greatest weapon. Focus on learning in the beginning. Don’t make the mistake of focusing on making huge gains in the beginning. Learn everything you can because this is how you build the foundations for long-term gains.

They say that if a millionaire goes bankrupt they’ll nearly always be able to get it back. And that’s because they might have lost their money, but they have the knowledge of how to get back to where they need to be.

Related: 21 Choices Millionaires Make That You Aren’t Making But Should Be

2You can learn loads about any topic online

online-learning

I’m grateful for the internet. It’s the single biggest library in the world. You’re reading this article right now and you’re acquiring knowledge you wouldn’t have been able to acquire 40 years ago. Use the internet to its fullest extent, whether that’s through reading books, browsing articles or watching video tutorials.

Set some time aside every day to learn something online. It could be a video series or a favorite blog. When you get into the habit of learning regularly you’ll find that you advance much faster.

3Focus on the niche you love

These days you can learn about anything and target the niche you’re passionate about. This is what I was able to do with penny stocks. I found a gap in the market and provided knowledge to people who wouldn’t have otherwise being able to access this sort of information.

You can do that with absolutely any niche. When you find a niche you’re passionate about and you use the reach of the Internet you start to make huge gains.

4Prove your expertise by creating free content

Your reputation as an authority is the new business card. There’s a reason I created a penny stock guide and made it free for all. You may have already seen ads for it on social media. The way to succeed with little is to create a reputation through your content.

It’s the gateway to success because through free content you start to build relationships with others who value your work. And from there everyone gets richer.

Related: How To Become A Millionaire, Explained In 1 Minute

You can do lots with a little

The days when you needed a huge investment to become successful are long gone. These days you can do so much with just a little. Find what you love, advance your knowledge in that area, and create a product that fulfills a need. Finally, work on building up relationships through portraying yourself as an authority on your subject.

Combine everything together and you can accomplish anything.

This article was originally posted here on Entrepreneur.com.

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12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

Get-rich-quick schemes rarely work but doing the right things every day rarely fails.

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There’s a mindset that’s prevalent these days. It’s one of instant gratification in an on-demand society that looks for quick results with very little effort. Entrepreneurs know that life doesn’t work that way. You need to put in the sweat equity if you’re looking to gain serious results.

When it comes to making money, certain good habits push us forward while some bad habits deter us from getting rich or even making any semblance of serious money.

Clearly, many people are making money and some are making lots, but if they mismanage it and pilfer it away on mindless pursuits, building the proverbial empire is going to be far harder.

Making money is one thing, but creating wealth is an entirely different thing. Obviously, most people can quickly make an extra $100 by selling used items or doing a small gig on a site like Fiverr, but if you’re looking for the kind of cash that can make a significant difference in your life, embrace these 12 millionaire habits. They are sure to drive you in the right direction. You’ll find ways to create real wealth by beckoning financial opportunity and potential windfalls through a positive mindset and a sound emotional, spiritual and mental state. That is quite literally the most powerful mixture of habits that exists for entrepreneurs.

1Always add value

Value makes the world go round. Everyone wants to get value out of an exchange. The most successful entrepreneurs in the world know that if you’re going to make lots of money, then you need to always be adding value. Always seek to add more value to whatever services, information or products you’re selling.

Related: 13 Habits Of Self-Made Millionaires You Could Adopt Today

2Wake up early

The early morning hours are replete with quiet solitude. It’s when you can refine your thoughts and implement your plans before all the distractions of the day. If you are constantly dealing with interruptions throughout your day, find your happy place in the morning. Wake up early so you can plan whatever will advance you toward your goals.

3Exercise

exercise-good-life

Making money isn’t just about implementing good career or business habits. You need to be fit emotionally and physically to fire on all pistons. Exercise in the morning, even if briefly. Exercising gets the blood flowing and oxygenation to the cells, helping you to think clearly and be laser-focused. This habit is implemented by some of the world’s richest entrepreneurs.

4Daily goal setting

You have your long-term goals in place but, if you’re looking to make serious money and quickly, you have to set goals every single day. These are milestones on your way to your biggest and most outlandish goals. Do this when you wake up, first thing in the morning, so that you stay on track and on target. Decide what will move you closer to those financial goals by the end of the day, then go out there and do it.

5Effective time management

Everyone in this world has the same amount of time. The 24 hours of each day is life’s greatest equaliser. It doesn’t matter what we do, where we’re from or how much money we have, we all have the same amount of time.

Effective time management is a must for those looking to get ahead. Whether your goal is to earn a lot of money over time or you just need to earn a little bit of extra cash quickly, properly managing your finite time is what makes it possible to succeed.

Related: 4 Bad Money Habits That Have Left Millionaires Broke

6Networking

Networking is one of the most important habits to have in life. The sayings go, your network is your net worth, and if you lie down with dogs, you’ll definitely come up with fleas. Reach out to others and find out what you can do to add value to their world.

Don’t ask for anything in return, especially not right away. Just insert yourself into the mix, and eventually the opportunities will find you.

7Innercising

John Assaraf

John Assaraf

John Assaraf, who built up a billion-dollar real estate business and is featured in the movie The Secret, preaches the importance of “innercising” in his NeuroGym system. Innercising is mental exercise to reprogram subliminal conditioning deeply embedded in our subconscious. The goal is to frame the mind with a positive financial outlook which attracts money and opportunities to our lives, rather than pushing them away.

8Healthy diet

Will eating healthier help you to attract more wealth or make more money in the interim? You can bet it will. Sound body, sound mind. To have the precision thinking and focus of a highly-trained athlete, you need to eat healthily. Our bodies spend a large amount of their energy on processing foods. Unhealthy eating leaves us with less energy for achieving our goals, whatever they are.

9Saving and investing

Obviously, saving and investing is fundamental to building wealth. It won’t happen as fast as you’d like, but the larger component at play is having moment-of-the-opportunity cash to invest when something requires your attention immediately. When you have capital and are no longer living paycheck-to-paycheck, you’re ready to earn more money when the opportunity presents.

Related: 20 Habits Holding Me Back From Being A Millionaire

10Mindfulness

If you play a cutthroat game and walk all over people, few opportunities will come your way. Being mindful and respectful of others attracts opportunities that you can eventually convert into cash. Be mindful about how you act and what you say so it doesn’t come back to bite you in the butt.

11Work with a mentor

Mentors are great for helping you to earn extra income, whether small or large. A mentor who’s achieved outlandish goals in your industry will offer guidance to help you get where you’re looking to go.

Find a mentor and work with them daily. Ask for their help and guidance as you navigate the choppy waters towards success.

12Contribute to others

Contribution is born from an abundant mindset. When you are sated and have enough for yourself, look to contribute. You can trick your mind into an abundant mindset by simply contributing your time to others. You don’t have to give money. Only time. It’s a subconscious mind trick that moves you away from scarcity to attract more money and opportunities into your life.

This article was originally posted here on Entrepreneur.com.

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