Episode 502 – Leveraging Capital for Your Cleaning Business
Do you ever find yourself in the following situation? You are all in committed to growing your cleaning company, but you don’t know if or how you should borrow money or what you should or should not invest. Here’s the thing: if you don’t go “all in” on your business, you might be better off with a job. When people are faced with needing to invest, they often stop at this point. Today we’re going to go deep into some false beliefs about leveraging capital for your business.
False Belief – I need to borrow a bunch of money for “supplies”.
One of the nice things about our industry is there is a low barrier to entry! It doesn’t take a bunch of money off the bat to be successful. You don’t need to buy the more expensive, newest brand of supplies out there to start off, so don’t let the idea of not having supplies yet scare you off!
False Belief – Because there is a low barrier to entry, I should do this on a shoestring.
Because your competitors are all “bootstrapping it” you have an opportunity, but you just need to invest in things with a positive ROI (return on investment). It’s a fine line between not wanting to waste capital on supplies but at the same time, you don’t want to be completely cheap or on a “shoestring” budget with your supplies.
False Belief – All debt is bad OR All debt is good…
BAD debt is buying something that goes down in value. GOOD debt is INVESTING on something that goes UP in value faster than the interest you pay! It’s ALL about ROI! There is always a risk when you put capital into a business. Things that I’ve found that are worth the investment are: systems, processes, education, books, and client attraction services.
False Belief – Millionaires all started rich and never borrowed money.
Here’s a fun fact: US News reports that 88% of millionaires are self made…let that sink in for a moment.
False Belief – It’s really important I have a good credit score.
The one thing WAY better than a good credit score is CASH!
False Belief – It’s really important I don’t pay high interest.
Actually, it’s really important to invest in things with a positive ROI!
False Belief – I can be successful without doing anything scary or out of my comfort zone or RISKING anything.
You can be successful like that, but it’s called a J.O.B (just above broke)! You can NOT be a successful entrepreneur without risking time AND CAPITAL!
False Belief – As long as I am investing in my business, it’s ok to go into debt.
You STILL want a HIGH ROI. Invest in systems and processes. There is a reason people wait in line to pay hundreds of thousands for a FRANCHISE. It’s the SYSTEMS! Invest in good systems for the BEST ROI! Think about it this way: if college is a “good” deal, investing in proven systems to actually make money and create wealth is the BEST deal for an entrepreneur
Entrepreneurs MUST handle risk and capital! Get this right and you will be successful in life, not JUST THIS business!
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