If you are a business owner or startup founder, becoming a millionaire entrepreneur might come to you as something that is out of your reach. That’s understandable, especially in the initial stages of your entrepreneurial journey where you just want to get your business off the ground.
However, the real motivation and determining factors that the world’s most successful entrepreneurs, who are also millionaires, have is to stick to the right metal attitude and financial habits. With those two things locked down, you too can become a millionaire.
According to Thomas Stanley and William Danko, in their book 'The Millionaire Next Door,' there are “those who look rich, and those who are rich.” Your job is to be one of those people who are genuinely rich, rather than those who spend a lot of money but who have very little in the bank.
Truly wealthy people develop the habit of "getting rich slow," rather than "getting rich quick,” Stanley and Danko point out, and to assure this, they have two rules with regard to money:
"Rule number one: ‘Don’t lose money.’ Rule number two: ‘If ever you feel tempted, refer back to rule number one, ‘don’t lose money.’”
ADVICE: Develop the Mindset and Financial Habits of Millionaires
“Wealthy people spend much more time thinking about their finances than people who remain poor,” add Stanley and Danko. “The average adult spends 2-3 hours each month studying and thinking about their money, usually at bill paying time, while the average self-made millionaire, by contrast, spends 20-30 hours per month thinking, studying and planning his finances.”
As such, your success as an entrepreneur can only improve as your attitude and financial habits improve, which clearly implies that you need to transform your mindset to achieve breakthrough success in business, and maybe even become a millionaire yourself.
Once you start working on your entrepreneurial career with a millionaire’s mindset and financial discipline, you will be sufficiently inspired and not lose the motivation to keep going despite the challenges, setbacks, and financial struggles you might face along the way.
To see yourself get to that place where your mind and habits are right and ready for the highest level of success in entrepreneurship, you will need to make some mental and structural changes.
Steps to Develop the Discipline and Financial Habits of Millionaires
Here are top tips and steps you can use to cultivate the financial habits, discipline, and mindset required to grow your entrepreneurial fortunes, become a millionaire, and finally achieve financial freedom:
1. Analyze Your Ongoing Financial Status
You cannot expect any sort of financial development if you have no clear understanding of where you currently stand financially. Hence, do a financial analysis of your business. An honest analysis will tell you whether your business entity is stable, liquid, solvent, or profitable enough to warrant a monetary investment or other intervention to reach your financial goals.
With a physical documentation of your current status, evaluate your business projects, budgets, revenues. and other finance-related entities to determine their performance and suitability. Only then can you make the required adjustments and changes to reach your financial goals.
You need to acknowledge the numbers that you earn versus the numbers that you spend each month. Doing so will help you in drafting a financial plan and budget through which you can easily manage your business, while avoiding any sort of pitfalls such as outstanding loan payments.
2. Sketch Out Your Future Financial Plan
There is a possibility that you might be disheartened to learn that your earning currently is not standing up to the total expenses. But, knowing this is the first step towards making necessary positive modifications to make your finances right going forward.
While creating a structure for your future financial plan, make sure that you:
- Know your net income.
- Establish your business expenses and personal spending.
- Know the scope where you can gain savings.
- Utilize online tools to track your finances on a routine basis.
- Note down your desired lifestyle and financial objectives.
If you don't know where you are going, then any road will get you there—it won't matter which way you go. But if you're clear about how you want your financial future to look like, you will be focused and driven do everything it takes to get there.
3. Increase Your Current Income
Once you have listed your financial and lifestyle objectives along with creating your plan for the future, it is time to work on them in order to achieve the objectives as expected.
Practically speaking, you are unlikely to become a millionaire overnight or immediately by simply cutting down expenses to bare minimum costs. You also need to chalk out how you are going to boost your existing earnings to slowly grow your income. That means start looking for investment opportunities within and even outside your current niche in the market.
Start by looking at new market opportunities within your niche and then study other markets you can enter to grow revenue. Do everything necessary to expand in the markets with good business opportunities. There might be a scope or field that remains untapped abroad that you can also serve and significantly grow your business, resulting in higher income.
While expanding your offerings and moving into new markets is easier said than done, because it may require significant monetary, human resource and time investment, it is a necessary step to boost your income and keep your business growing so you achieve your financial goals.
4. Organize Your Income, Expenses, and Savings
As your income grows, forge a plan for how you will split it between your personal or living costs, business expenses, and savings. Split income proportionally and not necessarily equally, keeping in mind the two financial rules of millionaires mentioned above—don’t lose money.
Once you are done forming a strategy of splitting your income proportionally, it is time to split your savings further into two different accounts. Set aside one savings account for your emergency savings plan and another for your retirement savings plan to cover all your bases.
The recommended way to manage your income and savings is to automate them. For example, if you owe debts in the market, create direct debits from your existing account while ensuring that the rest of your income gets transferred to your savings accounts.
Scheduling your debts can protect you from outstanding and late loan payment penalties, which can be crucial in solidifying your savings accounts and improving your financial standing.
5. Grow Your Expertise to Maximize Your Potential
When you grow your expertise and build a reputation for excellence, you’ll command high rates for your services and products. That’s why it’s important to grow both your technical and soft skills, industry knowledge, and deliver the best products, services and ideas every time.
Read widely within your industry and without. Studying and learning as much as you can is essential to maximize your potential. The most successful people in the world are avid readers. If you want to join their ranks, you must read every day and learn continuously.
And when it comes to learning, it entails more than just reading to know how to do your job more efficiently; it is also about honing your critical reasoning to become a thought leader in your field. This can help you be the originator of new thoughts, ideas and direction in your industry, which can serve as the building blocks of your becoming a millionaire.
Besides, growing your expertise opens opportunities to discuss topics and debate ideas with other experts for the betterment of your industry and the world at large. You become a valued intellectual and influencer making the world a better place for all.
Best part is, you can start growing your expertise and honing your skills in your spare time by reading, listening to podcasts, enrolling in online courses, and attending conferences and events.
6. Control Your Spending Debt
Perhaps the one obstruction that can throw you back to square one on your journey of becoming a millionaire is spending more than you bring in and accumulating huge debts. Bad spending habits and huge debts will kill your dream of financial freedom fast.
While a business debt can be considered more of a necessary investment, if it is acquired without proper planning or considerations of how to pay it back it can hit both your business and goals hard. To remain on the safe side, take steps to avoid debt and pay bills within the due dates.
Also, treat your credit card as an emergency way out instead of a luxury. Leave your debit/credit cards at home if you find you tend to buy things you really didn’t need. If you want to spend a significant amount on something, sleep on it first before splashing your hard-earned money on frivolous things that will prolong the time you take to reach your goal of financial freedom.
On a different note, even if you have some debts, start paying your debts now. The sooner you start paying off your debts, the better. Pay off the most expensive debt first and work your way towards being debt free as quickly as possible.
Once you are debt free or have only the necessary and manageable business debts, create a budget and make sure you track your expenses and stay within the budget.
7. Extend Your Professional Network
Finally, as author Jim Rohn said, you are the average of the friends you keep. If you want to be a millionaire, start thinking and acting like one. That means start building your network of successful individuals in different industries and hanging out with millionaires.
Thanks to the internet, meeting and interacting with highly successful people, influencers, and millionaires is now easier than it has ever been. You don’t have to go to exclusive millionaire clubs to interact with millionaires any more. You can simply leverage social media, email, and even their webinar platforms to easily connect and engage with them.
Building your network and expanding your circle of friends with the right people who have the capacity to catapult you to achieve your goals can be a game-changer. Be bold and proactive as you move to engage with and learn from your network of successful individuals.
Apply these essential steps patiently and persistently and you will build your fortune and reach the ultimate financial milestone you want. And when you reach your entrepreneurial dream, stay humble and continue learning and developing yourself to safeguard your success.