What if I told you that by the time you are done reading this article, if you choose to, you can be debt-free in your business?
Borrowing money is one of the most common ways entrepreneurs fund their businesses. Perhaps you have also, maybe you even owe money right now.
Do you find that no matter how many articles you read about “forgiving yourself” for going into debt in your business, you still have that horrible feeling at the pit of your stomach, perhaps a lot of fear, and just want it to go away?
When you see the balances every month, do you have to fight back feelings of guilt and shame, and secretly think you are a fraud?
Examining the word “Debt”
When I think of the word “debt”, to me it describes when a person lives beyond their means to buy things they don’t need, with money they don’t have. In essence, they rob their future to satisfy the moment. (I certainly was guilty of that in my younger years!)
Merriam Webster’s dictionary uses the following words to describe “debt”.
- SIN or TRESPASS
- The state of owing
- The common law action of the recovery of money held to be due
Well when I read that definition I just want to crawl under the table and hide. NO wonder it brings up so many feelings of shame and inadequacy. The word itself is incredibly disempowering. No wonder all these articles talk about forgiving yourself. But what if there was nothing to forgive?
I have borrowed multiple times in my business, and yet I have never gone into “debt”.
How can you borrow money and be debt-free?
Let’s take a minute and look at a different word to describe borrowed money : Credit. You know, like a line of credit, or a credit card. The tools through which we access the borrowed money all use the word “credit”. And yes, I have used the “tool” of credit, many times. Tools are a good thing!
The same dictionary describes “credit” with the following words
- Good name
- Reliance on truth
- Esteem & credibility
- A source of honour
- An amount placed at a person’s disposal by a bank
- Provision of goods and services with the expectation of a future payment
Wouldn’t you rather carry THAT energy with you in all aspects of your business, even borrowed money?
Borrowing money is not a bad thing. It can be a very smart and inexpensive way to:
- Fund major investments or system upgrades
- Ride out cash flow waves
- Manage unexpected surprises
- Invest in education and self development
The expectation is that you will profit at some future date from the borrowing. By not allowing your current cash flow to interfere with your goals, you are not allowing your present to sacrifice your future! How amazing is that?
Think about this without emotion for a moment – if the expectation of the income from this investment is in the future, doesn’t it make logical sense to defer the payment for the investment until the future? This is the strategy used by many of the world’s most profitable companies!
So what will you choose?
Are you willing to let go of the chains of “debt” and embrace the tool of “credit” and appreciate what it is allowing you to do?
You may be thinking “Nafissa, it doesn’t matter what I call it, I still owe money”.
I encourage you to think differently. The mindset and energy you carry affects your self esteem, self worth, anxiety levels etc – and if that isn’t in the right place it will negatively affect your business decisions.
So many entrepreneurs borrow money and immediately feel guilty and panicked. When instead they should be focusing on the next step to move their business forward, that they can now accomplish because this tool of credit was available.
If you find that true “debt” as I described it above, is part of your story, then pay it down as quick as possible even if it requires some sacrifice. It is such an empowering accomplishment. And, remember shame and guilt have no place when it comes to assessing financial health. It’s just information.
Repaying business borrowing (“credit”) however, doesn’t necessarily have the same urgency. It should be done strategically and systematically in a way that keeps your cash flowing freely, so you can continue to grow your profits and operate your business.
Not all credit however, is created equal. And, just because it is available, doesn’t mean using it is appropriate. And it needs to be used responsibly. In a future article I will share some tips on how to choose what to use, when to use it, and how to approach paying it back.
But in the meantime, I am hoping that you have now chosen to be “debt-free” in your business and break those chains that are holding you back, and to give yourself some credit!
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