As a business owner, you know that cash flow is the lifeblood to any business. If you don’t have cash flowing through your business, it could feel suffocating.
Whoever controls your cash flow controls your life. And that’s why we focus so much on control at Tier 1 Capital. In fact, it’s our mission to help as many businesses as possible to make the best financial decisions possible. And it all starts and ends with one thing, and that is control.
According to a recent survey by Intuit, 61% of all businesses around the world struggle with cash flow. And 69% of business owners admitted to sleeping less or losing sleep due to cash flow concerns. This is exactly why we’ve put together a four step process to put you back in control of your cash flow.
Step number one, we identify where you’re giving up control of your cash flow unknowingly and unnecessarily. Unknowingly means that you don’t realize you’re doing it and unnecessarily means that working together, we could fix it.
Second step is the hardest step in the process. You got to stop doing what you’ve been doing to give up control of your cash flow. But it’s the hardest step because these are strategies and techniques you’ve been using all of your life, and you may have an emotional attachment to a lot of those strategies.
But keep this in mind, the thinking that got you in this situation is not the same thinking that’s going to get you out. It all starts with a simple paradigm shift.
Step three: You start to save in an entity where you own and control, meaning that you could access the money on your terms whenever needed, and the money will always continue to be working for you, meaning that it will earn uninterrupted compounding of interest.
Think about it this way. What impact would it have on your peace of mind if you were able to control the financing function in your life? Not banks and not creditors. Wouldn’t that be a huge burden off of your shoulders? We think so.
The fourth step is where the magic happens. We teach you how to borrow against your own capital and pay interest back to an entity that you own and control. Because let’s face it, we finance every single purchase we make, whether we pay cash and give up interest or finance and pay up interest. This solution allows you to regain control of that financing function in your life so that you are the borrower and the lender and you take out any middle man.
Conventional wisdom teaches us that debt is bad and it’s not uncommon for business owners to believe this, to pay off their debt as quickly as possible, to pay cash for major purchases. But what does that do? It gives away opportunity cost. Every time you spend a dollar unnecessarily, you not only lose that dollar, but you lose what that dollar could have potentially earned you for your business. So we work hard for profits and then we give them away because we’re focused on the wrong things.
Let’s face it, we’ve all been conditioned to give away control of our profits. We pay off our debt quickly. We pay cash for purchases. We fund our retirement with qualified retirement plans. And what do these strategies have in common? We have no control over our money, and we have no access to our money. It’s always like we’re chasing our tail to get control of cash.
But the answer is literally hidden in plain sight. Stop giving away control of those profits. What we found is that when you stop giving away control of your profits, that’s where you can start enjoying a better life for yourself and grow your business.
So what is the solution? It’s real simple.
Stop giving away control of your profits. When you do that, you’ll have more cash flow. When you have more cash flow. You can redirect some of that cash flow to start building cash assets. And when the cash assets get large enough, you can borrow against those assets and pay interest back to that entity that you own and control. After that, you just rinse and repeat throughout your entire business lifetime.
Then, when you go to retire, you can access that cash on a tax favored basis to supplement your retirement. The retirement income is just one piece of the pie of how this tool could be deployed in your business. It could also help with business succession, business exit strategies and key person retention.
Remember, it’s not how much money you make. It’s how much money you keep that really matters.