Lessons Learned From Losing Money In Business

Painful experiences are life’s way of teaching us valuable lessons. The folks over at www.findmyworkspace.com share lessons we can learn from financial setbacks in business.

Even successful companies lose money, all the time. Bad investments, bad decisions, wrong business partners, they can lead to financial losses in any organization.

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Losing a big lump sum can be especially fatal to smaller companies with limited funds. But the key is how you bounce back stronger and wiser than ever after a devastating experience.

Ideally, we want to learn some of these crucial lessons without losing our own money. So we pooled together some of the key takeaways from entrepreneurs who have suffered huge setbacks and survived.

  1. Plan what you will do with your first million before you earn it.

Sooner or later, you are going to earn your first million in the business. Make sure that you put it to good use.

The best way to ensure this is to have a concrete plan. Decide beforehand the percentage you will save, spend or invest. Plot the specific investments you will make.

And when you finally see those 7 figures in your bank account, you know what to do. This will prevent you from getting carried away in overspending your hard-earned money on leisure or celebrating your achievement.

  1. Invest in what you know.

Stick to industries and companies that you are knowledgeable about. With these businesses, you have a better idea on how the market behaves or the trends in that sector. You know the factors to watch out for.

If you choose to invest in an unknown territory, understand that the risks are greater. So allot an amount that you are ‘willing’ to lose.

  1. Good investments take time.

You can minimize the risk of making bad investments when you allot the time to study your options in advance.

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Make sure that the information you have is updated before you shell out for any investment.

Of course, there may be instances when you have to make quick decisions to take advantage of a great opportunity. But make sure that any risk you take is well-calculated.

  1. Have good advisers.

Seek mentors who have more experience, success and expertise. As mentioned earlier, learning from the mistakes of others can save us a lot of time, money and headaches.

In running a business, there are so many aspects to look at. You definitely cannot be a master of everything: sales, finance, vendor management, technical know-how’s… if you can find someone who can complement your weaknesses, it will help your venture go a long way.

  1. Invest in people.

One of the main reasons why businessmen lose money is because of incompetent employees. You may have the greatest ideas in the world, but without well-trained team members to help you implement them, your efforts may end up in vain.

You may want to invest in the latest technologies, but remember that machines cannot completely replace human skills. Instead, equip your people with the necessary skills and invest in a winning culture that promotes teamwork, creativity and accountability. Support your team during tough times and they’ll definitely do the same for you.

  1. Do not put all your eggs in one basket.

When you are starting with your first business, you will have to concentrate all your funds and efforts in growing that venture. However, as the business grows bigger, you might want to consider diversifying your offerings or expanding into other products or services.

Make it your goal to have multiple streams of income. If you can come up with a source of passive income, that would be very beneficial.

Building a diverse portfolio gives you the flexibility to be able to change direction every time something doesn’t work. It allows you to cope with seasonality and low months for certain items, but make sure that you don’t lose your focus on what works.

  1. Money is not EVERYTHING.

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Making money should not be your main goal in doing business. Sure, it’s nice to have the cash and the things you can buy with it. But you should be in business to fulfill a purpose that is bigger than getting rich financially.

Always keep in mind that there are so many things more important than money- values, family, health, honor, etc. If you lose money, it is not the end of the world! You can always earn more money but people are irreplaceable.

So keep your chin up and move forward.

In life and in business, you win some and you lose some. You will definitely suffer some setbacks, but you will also enjoy victories. Learn from each mistake and press on towards your goals… stronger and wiser each time. You can never succeed if you play not to lose. Instead, work smart, focus on the right things and play to win.

 

photo-gemma-reevesGemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with several clients across different industries such as advertising, online marketing, technology, healthcare, family matters, and more. She is also an aspiring entrepreneur who is engaged in assisting other aspiring entrepreneurs in finding the best office space for their business.

Check out her company here: FindMyWorkspace

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