I heard an interview recently where Musk told Neil deGrasse Tyson that he once lived off of $1 a day. Now, to be fair, that was a dollar a day just for food. The food was hot dogs and oranges. Wouldn’t be my first choice, but to each his own.
Could you live off $1 a day? Elon can.
But this brings about a bigger lesson. Musk said that when he went a whole month spending only $30 on food, he realized that he could pretty easily find a way to earn $30 a month. This is the key. So many entrepreneurs put this big number in their head as the revenue they need to hit to be able to make a full time living off their own business.
That number is big because they have an expensive lifestyle that they’re not willing to give up. The five figure mortgage payment, the several hundred dollar car payment, the money spent eating out, nights on the town, tropical vacations, expensive clothes, the list goes on.
Now I’m not saying these people are bad because they don’t want to give up their lifestyle. But they also can’t look around and wonder why their business isn’t doing better. The revenue goes right to all these unnecessary expenses. The revenue is adequate, the profit is bad.
What are you afraid of?
When your adequate revenue turns into small profit, you live in fear. You live in fear that you won’t be able to pay the bills and you’ll ultimately end up out on the streets. This means that rather than taking a long term approach to growing your business, you’re constantly focused on getting just that next dollar so you don’t go bankrupt. You’re constantly focused on the short term sale.
A lot of entrepreneurs hedge this fear by keeping a full time job to pay the bills. But that 40 hours each week spent working for someone else is 40 hours a week not spent growing your business. So it takes a back seat and revenue stays flat. You can quit the job, but then you’re living in fear like I just described. It’s a no-win situation. Or is it?
What’s the worst-case scenario?
First off, you won’t end up on the streets. Chances are, unless you have a severe drug or alcohol problem, you’ll be ok. So putting aside the thoughts of rummaging through dumpsters for food and sleeping under a bridge next to the freeway, let’s think about the real worst-case scenario.
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