A large number of small businesses fail each year. There are a number of reasons for these failures, but one of the main reasons is insufficient funds. Too many entrepreneurs try to start and operate a business without sufficient capital (money). To avoid this pitfall, first review your situation by analyzing these three questions:

How much money do you have?
How much money will you need to start your business?
How much money will you need to stay in business?

Use the following categories to compile the needed data to complete a personal financial statement to answer the first question:

Personal Financial Statement

ASSETS

Cash on hand:
Savings account:
Stocks, bonds, securities:
Accounts/notes receivable:
Real estate:
Life insurance (cash value):
Automobile/other vehicles:
Other liquid assets:
TOTAL ASSETS:

LIABILITIES

Accounts payable:
Notes payable:
Contracts payable:
Taxes:
Real estate loans:
Other liabilities:

TOTAL LIABILITIES:

Completing this personal financial sheet will set you on the right road to business startup success.

While reading this article, you will develop a bank of resources and instill habits that reinforce what is needed to reach your business goals, develop a sustainable business, and achieve your ultimate dream.

In the article, you are further honing your business ideas and determine what finances you have and will need. You will develop your entrepreneurial goal into one that is both personally exciting and one that provides its own sustainable source of motivation. You will also mold your ideas into your personal values in order to make it part of who you are. This one strategy will assist you in developing the strong financial knowledge The High Performance Entrepreneur needs to develop sustainability.

In other strategies in my the remaining The High Performance Entrepreneur strategies, you will learn how to develop the daily routines needed to keep you on your path. You will create action plans to use as visual displays to keep you on track. Through self-assessments, you will orient yourself around daily, weekly, and annual reporting schedules so you will know how close you are to your goals.

Look for other articles in the series by me.

The first step if you want to solve your debt problems is to know your income and expenses. You must know how and where your money is spent. Knowing your spending is as important as knowing how much money is coming in.

You may someday be the next person who buys the world’s most expensive cup of coffee and bagel if you don’t know where your cash flow stands!

If you said five dollars for a cup of coffee at Starbucks or Dunkin’ Donuts is rather expensive, none would argue with you. Yeah no one but Jake Drehar might.

Jake looked forward to each day was a hot cup of coffee in the morning, the one thing he can’t miss in even in summer heat. Jake started it off with his coffee everyday and it would not be a good day otherwise. Jake walked to the counter at his favorite coffee shop on one Monday near the end of the month. He had known about writing a few checks that month and the balance in his checking account may be running low. He paid with his debit card as he expected his paycheck would be directly deposited into his checking account that day and he had some cash in his wallet. He’d pay cash if the debit card were declined.

When the cost of his coffee was put on his debit card, he was pleasantly surprised, thinking his paycheck had cleared. Then he ordered a bagel and paid for that with his debit card. He received overdraft notices from bank two or three days later. He was assessed a fine not only for each overdraft but he was charged a fee for the bank covering his transactions. Jake’s coffee and bagel cost over $120 because of the two fines and two bank fees!

The experience of Jake is an extreme one but it is common. Endless ways are there to lose track of our finances. We put ourselves in peril of being hit with fees and fines that cause bigger and bigger problems when we do lose track.

We all tend to overestimate how much money we have and underestimate how much we are spending. This is the reason we lose track. Our spending sneaks up on us hence we do this. Moreover, it is amazing how little, everyday expenses add up over the year.

On your way to work each day spending on one medium Dunkin’ Donuts or Starbucks coffee and plain bagel adds up to more than $687 over the course of one year.

Daily purchases have a greater impact on your total expenses than you’d think. Keeping track of what is coming in and what is going out is most important.

Do you want to keep better track of income and expenses? Read *The Road Out of Debt* which offers you simple and ideal solutions for taking control and resolving your financial problems.

Lifestyle, what exactly does it mean to you? Everyone seems to have their own ideas and they can be quite different. But no matter what your own view on lifestyle is, it is a certainty that finance will impact on that definition.

Taking into account your own definition of lifestyle, it is obvious that to live it as you want to you need to have the necessary financial resources to fund it. If for example you want all the latest technological gadgets as they come available then you need to be able to afford them. If you are unable to find the money readily and without hardship then you need to change your lifestyle image.

If you envisage your own ideal lifestyle and you want to live it, then you need to make plans to finance it. It is time to get real and practical. You can keep spending money but then your debts will keep rising and you will end up in a sorry state.

In today’s society you may feel pressurised into feeling that you should have a certain lifestyle. Television, radio, magazines and the Internet all tell us we should have this or that in order to be fulfilled. But you need to take a long hard look at your own particular financial situation to see if you can live up to these ideals.

Believe it or not people can be mistaken when examining their own situations. They assume thay have more money than they actually have in reality. Common sense goes out the window as they want certain pleasures now without looking further down the road and planning appropriately.

They compare themselves too often with other peoples lifestyles, and naturally want to have that for themselves also. But no two peoples situations are alike no matter what it may seem like on the surface.

Closely and at all times take a detailed stock of your own financial situation both now and into the future. Foolish spending in the present can lead to all sorts of heartache in the future. You could be putting your house or car at risk of repossession. You could even become bankrupt. Do not let your heart rule your head, live sensibly and within your means, and just enjoy the pleasures that you have. In this way you will be able to continue to enjoy them with no worry or stress.

Copyright (2006) Ben O’Rourke. This article may be freely used as long as the resource box and links are left intact.