Last week we wrapped up our third Mentorship and had an amazing group of entrepreneurs from Seattle, Texas, Ohio, Illinois, Maryland, New York, Connecticut, Maine and New Jersey.
We left a ton of time throughout the weekend to answer specific questions they had and I was truly impressed with the depth of some of the questions that were asked.
One guy asked what were my 3 biggest mistakes in the life span of GFP.
The answer for me was very simple.
The number one mistake that I made in the beginning was not having a sound grasp of the numbers.
As a trainer turned entrepreneurs it took some hard lessons to realize actually how important knowing your numbers really is.
One of the biggest mistakes I see young business owners make is not paying themselves a fair wage for all the time they put into their business.
I took one of my coaching clients through this exercise and we figured out he was paying himself $4/hour.
I then asked him if he felt he was worth a little more than and the answer pretty clear.
Not paying yourself as the owner of the business gives you an inflated view of the cash flow for your business.
Here is the problem with guys like us(trainers turned business owners) having inflated cash.
We buy stuff.
We buy things we want but really do not need to run our business.
We start spending money like we have a lot more than we really do.
This is a huge problem that will eventually catch up to you.
There will be a time where you will need to draw more money to live.
Maybe you get married, maybe you have a kid, maybe you buy a home.
This time will eventually come and it will put a strain on your business because it is not used to paying out that much money to you.
The other thing to remember is when you start hiring more team members. Team members are awesome but they cost money, lots of it.
As you remove yourself from the training and you hire others to do all the work your profitability goes down, way down if you were not paying yourself in the first place.
Make sure to pay yourself as the business owner from the get go and remember you are in business to make money for yourself and your family, not to be able to buy lots of stuff for your business.