by Mark Laughlin 

The new business is opening today.  The money is just going to be pouring in.  Cah-ching!  I’m going to be rich!  Rich! Rich! Rich!

I should get a new car right away.  After all, I’ve got to portray the right image!  It should be something fast and sporty, maybe a convertible.  Definitely red!  Oh, and I’ve got to have a new large screen plasma HDTV with surround sound.  Definitely with surround sound! 

Maybe I should contact a realtor.  A brand new house in a nicer neighborhood on a big lot would be great.  A pool might be nice.  Definitely with a pool, a big pool!  After all I’ve got a got an image to maintain!

WRONG!!!  Wake up and stop daydreaming! 

You’ve got a long way to go before you break even, let alone start making money.  Put those purchases on hold!  It’s not the time to be spending.  In fact, it’s time to think about cutting back until the new business is on a solid footing and making money.

I just got off the phone with a client who is investigating franchise opportunities in his western state.  I have been working with him for over two months now and we have developed a dialogue.  I have gotten to know him very well.  His former company downsized and shut his office down.  They gave him a severance check and said adios after many years of busting his rear.  This is a story I hear way too often.  Unfortunately, it is becoming the American way of life.

When you are accustomed to living a certain life style, it is hard to do without.  We all get spoiled and pampered and change is very difficult, especially at our own expense.

My client had cleared this hurdle.  He sat down with his family soon after unemployment became a reality.  They discussed how all their lives were going to change.  He had analyzed all of his day-to-day expenses and created a list of what had to go and what needed to be cut back.  He was fortunate that his wife still had a good job that would cover the majority of the household expenses.

Many first time business owners never have this conversation with their family.  They keep living the “high life” and just keep on spending plastic money.  They still take their vacations.  They still go out to eat three or four times a week. 

What are they thinking?  Do you really think a new business venture is going to come out of the chutes and start making money from day one?

I take my hat off to my client for having his head screwed on straight.  He is not going to be one of those new business owners who have to stop advertising in the third month because he can’t make his mortgage payment.

Let’s take a look at what he did:

• He said bye-bye to house cleaning services, landscaping services and ChemLawn.
• He shut down the second phone line and deactivated the cell phones.  Long distance phone calls were a distant memory.
• He went with a $4.95 a month dial-up Internet service provider.
• He shut down the bottled water service and the newspaper.
• His wife who was spending $125.00 a month in tolls commuting to work started leaving 15 minutes early and taking the back roads to avoid the tolls.
• He eliminated going out to eat.
• They cancelled their vacation plans.
• He shut down the cable TV and lived with the six free stations they got with their old roof top antenna.
• He put them on a strict grocery budget.  Junk food came out of the equation.  They shopped the grocery store sales.  Leftovers became a good thing.
• The sewing machine came out of the closet.  Clothes for a family of five were repaired and not just given to the Salvation Army.
• He went with higher deductibles on his home and car insurance.

Are you willing to compromise your family’s lifestyle?  Are you willing to sit down with your family and have that talk so everyone is on the same page?  You may not need to cut back as drastically as my western friend, but you will probably need to make some lifestyle adjustments!

Besides your planned business expenses, have you allocated 12 to 18 months of family living expenses while your business is ramping up?  What can you do to save money so you don’t have to cut your advertising budget or have your payroll checks bounce in month three? 

Going into business for your self always sounds like a great idea.  But going into business is a crapshoot!  Being in a franchise system improves your odds of surviving, but it is no guarantee that you will survive.

Do you have what it takes?  Are you going to walk away with your tail between your legs when things get tough or will you dig in and fight?

If you’re willing to compromise, do without and have a never say die attitude you might be ready!  If you can’t do this, pull out the Sunday classifieds or go out to Monster.com and go find yourself a job!