Until you get your initial investment in your business back in your pocket, your business is unsuccessful.
This is money you have that you put into your business as seed money. One of the 10 Critical Business Factors that we use to measure business success says that a critical criteria is MINIMAL start up cash.
And the minimal is a variable term. There is some risk that you could lose this money so you only want to invest what you can afford to lose.
Remember, if you borrowed money from the bank or another financial institute you would be paying the loan back each month plus interest. If you borrow from investors, you may be borrowing under some other terms of trade and it is important that your investors get their return.
But the money you put in is YOUR investment and until your business pays that back to you, your business is unsuccessful.
One reason why many owners never recover their investment it that they forget to track their money. They failed to do several things properly at the beginning. These include:
- Opening a separate business account and putting money into and out of that account from your personal account and tracking it in your accounting system
- Keeping a journal of your investment and withdrawals
- Paying for small things with cash in your pocket and never claiming that money or tracking that money in your company account.
Whatever you initial investment of capital is, your business only starts to be successful on the day that all that seed money is returned to you. And every year or time, you need to put the money back into the business, you need to keep tracking the repayment to you.
You may never be able to recover and be rewarded financially for the time you invest but the capital must be paid back to all investors for a business to be successful
So the numbers to watch in this blog are the numbers associated with your initial investment. If you put money in, keep an eye on your getting it back. Too often, a business goes broke and so does the owner because they have never recovered the initial investment.
Keep counting. More important numbers next blog.
Passionate about Your Purposeful Performance in Business
Get your copy of 10 Critical Business Factors to find out the other criteria for business success