Magazine article Black Enterprise

Peak Performance: Business before Pleasure

Magazine article Black Enterprise

Peak Performance: Business before Pleasure

Article excerpt

No business can survive without sufficient cash flow. If you fail to invest continuously in your company, your dreams of self-employment can quickly come to a grinding halt. So if you want to increase your chances of beating the odds that doom many new businesses, you'll need to develop--and more importantly, utilize--your frugal sense.

"Our business is alive and well because we are financially conservative," says Gwen Mizell, co-proprietor of AAmerican Marketing Systems Inc. in Memphis, Tennessee. She and her co-owner husband, Steven, started the security firm in 1983 after eight years in corporate America as a bank associate branch manager and electrical engineer, respectively. "We even kept our jobs on a part-time basis to save as much money as we could," she says.

Newly minted entrepreneurs must resist the urge to spend excessively. In fact, they may actually need to live below their means until the business stabilizes and brings in a sizeable profit. "Sacrifice is the key," says Mark Perry, a partner of Alston & Perry, a CPA firm in Piscataway, New Jersey. "You have to go without personal luxuries if your cash flow can't support them."

In the meantime, the Mizells made a commitment to cut back on miscellaneous spending. They gave up trips to the movies and sporting events, and cut back on vacations. By the time they quit their jobs five years later, they had saved about $20,000 to reinvest in their company. "You have to take care of the important things first," says Steven Mizell. …

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