When running your business one of the first things to focus on is cover your expenses (CYE).
It’s nice to be picky with which customers you want to deal with. It’s nice to want to save the world. It’s nice to only do what you want to do. The problem is, until you are covering your expenses you really can’t be as particular as you would like.
The first step is to know what your actual burn rate is. How much is being spent each month? Without knowing that, it’s difficult to know the minimum you need to bring in to cover your expenses. Guessing isn’t the answer.
While getting to the point where you are covering all of your expenses you might have to make some sacrifices. If this means taking on a client you know is going to be difficult, you do it. If this means doing some side work to pay the bills, you do it.
The thing to remember is until you are regularly covering your expenses, beggars can’t be choosers. This doesn’t mean you should compromise your beliefs but it does mean you should make sacrifices when necessary.
One thing to remember is you can control some, if not all, of your expenses. The amount of money you pay yourself (outside of absolute necessities) can dictate how high your expenses are. The amount of things your company wants vs needs can affect expenses.
Once you are regularly covering your expenses, then you can start to be more choosy. This is when you can start saving the world but it doesn’t do much good to try to save the world when you can’t save yourself first.
Cover your expenses and then do what you want. Those who go in the opposite direction will frequently struggle long term.
Have a great day!