sundays

Dave Ramsey Says...
q
I own a small business,
and I’m having trouble
scaling up while keeping
expenses down. Do you
have any advice for me?
AThere are two types of expenses: fixed and
variable. Variable expenses rise as the volume and
size of your business grows. A good example of
this would be shipping. The more stuff you move,
the higher your shipping bill. Fixed expenses are
there regardless of your income. Rent is a fixed expense.
The amount doesn’t change, and you have to pay it whether
you’re making money or not.
The best advice I can give you in a scenario like this is
to take a deep breath, and accept the fact that you need to
slow down and grow slowly and steadily. If you let expenses
get out of hand you’ll be chasing them and playing catch up
for the life of your business. Overhead kills businesses, Josh.
It’s the death knell.
qI’m thinking about starting
an auto detailing business.
Do you have any advice on
how to start something like
this, and what to consider
first?
AWhen you’re running your own business, you’ll find
out quickly that your boss is a jerk who works you
like an animal. Working for yourself is one of the
toughest things you can do for a career, and you
better make sure you’re doing something you love,
because it’ll take years of blood, sweat and tears
to be successful. If you don’t absolutely love auto detailing,
and if you’re thinking about it simply because it’s plausible or
you think you can make money doing it, I’d advise giving up
on the idea. If that’s your stance, it’s really more of a side job
than a business.
Think about something you’d want to be doing every
day five years from now, and have anywhere from 20 to 200
people doing it with you. You’ll always do a better job and
have more fun when you’re involved with something you
love. And when it comes to running the business, pay cash,
have a written game plan and don’t be afraid to grow slowly.
Lay out a smart business plan ahead of time, and know
everything from your marketing strategies and cost of startup
equipment and supplies to what your projected revenues
are and the per unit charges for all your little widgets. Lay
this all out like you had to prepare a report for a college
class, and that’s what a business plan looks like.
I’m excited for you, Justin, because you have lots of
entrepreneurial spirit. You might not make $100,000 your first
year, but who does? Just take your time. Be patient, be smart,
and give people a quality product and professional service. If
you’ll do those things, chances are you’ll be a success!
ABOUT DAVE:
Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books:
Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard
by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and
on the web at daveramsey.com
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1/28/2014 1:23:12 PM