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How to Fuel Your Entrepreneur Aspirations
2 Frugal Dudes
Episode 90: We’re learning how to fuel your entrepreneur aspirations through a discussion with Tom Sylvester, a business coach and strategist for entrepreneurs looking to build the right business, increase sales, and achieve financial freedom while creating the ideal lifestyle for their families. Visit Tom at TomandAriana.com.
Tom grew up in a family situation that made him all to familiar with the negative impacts of debt. However, despite his best efforts, by the time Tom was 22, he and his wife had amassed over $220,000 worth of debt due to student loans and credit cards, despite his adamant stance against using credit cards. Tom’s key takeaway is to avoid temptation.
Rather than listening to sales presentations or getting credit increases, avoid the scenarios in which you’ll be subject to psychological sales tactics. If you can’t avoid the scenarios, mull over your decision for a few days before committing to anything.
After graduating from college, Tom was quick to discover that he didn’t want to work for someone else for the rest of his life. A friend recommended the book The Automatic Millionaire by David Bach, which showed Tom that he could shape his path, live the life he wants, and retire by age 35. With renewed vigor, he went on to start various businesses in pursuit of his goal.
Tom has been in business alone, with his father, and with his wife. No matter who you opt to partner with, Tom advises that it will add complexity to your relationship. To find something that will work, you need to have a discussion about what you want out of life and your partnership, as a way to direct your business goals.
You are different than your business. At a minimum, you should have a separate checking account for personal expenses and business expenses. This ensures everything stays legal and allows you to optimize your tax deductions.
Mixing your funds in one area is called co-mingling your funds. It can make it challenging to determine whether or not your business is profitable and to ensure you’re setting enough money aside for taxes.
Tom, like many Frugal Cashmates (Kevin included), uses the Profit First system. With this system, you put your money into different buckets to determine what money is going to your taxes, your business expenses, and yourself.
In Tom’s experience, most businesses fail out of a gap in the business model. In simplest terms, businesses should work: you find a demographic with a problem and offer a solution they’ll pay for. Most people that fail create a product first and try to discover who needs that product after the fact.
Tom’s recommendation is to talk to the people who have the problem and ask if they’d use your product or service, how much they’d pay, and the details of the problem they need to be solved.
Tom uses the lean canvas business plan to get his clients started, which allows entrepreneurs to write hypotheses about the business and do research to prove or disprove those assumptions. This helps validate one’s business before they invest too much time or money into the idea.
An initial plan doesn’t need to be complex; it just needs to give you direction.
Most entrepreneurs have heard that most millionaires have upward of seven income streams. While this is true, it can be challenging to remember that these millionaires diversified over years. Focus on one thing at a time, and ensure that one income stream is self-sufficient before adding another focus.
Visit tomandariana.com/2fd for special resources and a free discovery call with Tom.
Kevin bought a 2000-piece Lego Saturn Five kit with his money this week. It was on a whim for some “me time” with his wife.
Sean’s money went to a friend in need via GoFundMe. This is a part of his budgeted monthly expenditure for donations and giving money away. Once you have a grasp on your money, finding opportunities to give to others present themselves and the reward is well worth it.
Disclaimer: Kevin and Sean are not professional financial advisors. Do not take any advice they give without first speaking with a professional and performing your own due diligence.