Check out this week’s video on Fiscal Responsibility. This is something a lot of people don’t talk about but is VERY important!
VIDEO SUMMARY
In the last video we talked about passion, and why it is important to your business. In this video we are going to talk about something that is equally as important, and that is Fiscal Responsibility. Fiscal Responsibility is the one thing you have to have to succeed. Now passion is really important. And this is one of those interesting things, because everybody talks about passion, but no one talks about fiscal responsibility. It doesn’t matter how much passion you have, if you don’t have fiscal responsibility, passion doesn’t matter. This is a really important distinction that not enough people make.
So what is fiscal responsibility? I like to talk about it in a very simple sense. Before you take action, you ask yourself, “do you have the money.” This seems very simple, and common sense. But I am constantly amazed how many businesses, people, and politicians don’t do this. Before you buy something, before you implement a new strategy, before you expand your business, you need to ask yourself “do you have the money?” Is this action fiscally responsible?
So let me give you an example of what happens. Let’s say you have a dream that you want to fly. Being able to fly is your passion. So what you do, is you find a really high cliff, and you want to fly so badly, that what you do is you jump right off that cliff. So the fiscally responsible approach, would be to still pursue your passion, but wait until you have saved enough money to buy an airplane. Do you see the distinction here? Jumping off the cliff is a really bad idea. And you have better options, like simply waiting. Just waiting until you have more money.
And I realize this is difficult for people, because here is what happens. You’re running a business and you see this great opportunity. It’s an opportunity to expand into a new market. You are passionate about. It is aligned with your company strategy. You will get great press out of it. But it will cost a lot of money. Money that you don’t have. So you will get so excited about the opportunity, that you will consider putting your company’s financial position at risk. Here is what you need to consider, and I don’t think we talk about this stuff enough. If you jump off the cliff, you are going to get hurt. If you miss this opportunity, another opportunity is going to come along later. I promise you, and it will probably be even better. Not only that, if you wait until you do have the money to go after the opportunity, you are going to get better results.
And here’s the real reason why all this works. You need to focus on the opportunities within your scope of control. Your finances only allow you to do so much. If your business’s scope is within a limited area, and you see an opportunity way out in the distance, you are going to get hurt if you go for it. Now I know I might get some angry comments from people saying “why are you limiting your dreams.” But I’m really not. I’m saying “just wait.” Focus on what is within your scope of control, and gradually increase that scope of control. Because eventually that scope will grow and include that opportunity that was way out there. This is about reaching your goals. And to reach your goals, you are going to need to stay in business for a long time. If you jump off cliffs and hurt yourself, you are going to take yourself out of the game. You need to stay in the game for the long term, and that means continually making fiscally responsible decisions.
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Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.