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Should a small business owner act rich?????????????????

My prospective new client today shared that in his opinion, acting like he is successful, is a necessary part of growing a business. I asked for the definition of successful and was told that it meant driving an expensive car, living in the right neighborhood, wearing expensive clothes and being seen at the right restaurants and social events. This same prospect is looking for a mentor to help him turn his almost break even business into a profitable one.

My own definition of success (being “money” rich) is reaching the point in your life when you have enough money saved to support your family without having to work. A car that runs, a comfortable home in a safe neighborhood and clean clothes, make up the rest of the package.

As business owners, customers invest in us not because we have all these “visible nice things”; they invest in our ability to deliver to them a more favorable future through our services and products. That is the point that has to be stressed and proven to our potential and current customers.

In my 30 years as a mentor and business consultant, my most successful business owners (financially successful) did not look like they were millionaires. They sold themselves by their ability to perform, to deliver more than they promised and built their referral base by their action and not by their “looks”. Long term, good clients know by your actions, your ethics and your integrity that they want to do business with you.

The recent economic downturn closed a lot of businesses because they were over extended, had expensive office rents, expensive leased cars and a list of other impressive, but not needed  “business support items”

As a Certified Financial Planner I am very conservative in my spending recommendations and help my clients budget for profitability by allocating their resources in a reserve and investing where they can get the greatest return. Spending several hundred dollars a month on a good marketing program will yield a much greater company bottom line than spending the same amount on impressing prospects and clients by driving a new expensive car.

Recognizing the importance of “budgeting for profitability” is a necessary part of growing a successful business. Take a look at your budget, are you budgeted for profitability?

Every person is the architect of their own fortune.     Appius Claudis, Roman general, 53 B.C.E.

Nick J. Petra CFP

Next week will have new support material in the finance section, subscribe today.                                                                        

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