💡 Build in Redundancy 💡
I'm a huge fan of Scott Pape, the Barefoot Investor. His journey from writing a newspaper article in the early 2000s to publishing a bestselling book in 2017 is inspiring. His guide on getting out of debt and building personal wealth is brilliant and highly applicable to SME businesses.
One of Pape’s key strategies is finding your “mojo” – a savings account separated from daily expenses that offers peace of mind and financial backup. This concept is essential in business too. Creativity and innovation suffer when you're overwhelmed by bills.
Pape’s advice on paying off credit cards, living within your means, and budgeting is sound for both personal and business finances. While businesses may face fluctuating demand cycles, the message of having a fallback position is crucial.
We often hear about entrepreneurs who risk it all and succeed, but many more risk it all and fail. Thomas Edison, for example, invented the light bulb and the phonograph but eventually saw his record company fail due to a lack of redundancy in his business model.
Phil Knight’s Nike story also emphasizes the importance of redundancy. His early business, Blue Ribbon, faced numerous financial crises and relied heavily on external support. Without a backup plan, businesses can quickly find themselves in jeopardy.
Having a Plan B and maintaining some financial redundancy can be the difference between success and failure. Most entrepreneurs won't be as lucky as Musk or Knight. History shows that unforeseen events will occur, and being prepared can help your business ride the bumps.
#Entrepreneurship #BusinessStrategy #FinancialPlanning #Redundancy hashtag#SME #BarefootInvestor #Inspiration #ScottPape