What I Wish I Had Known From the Start of My Field Service Management Business #1 - Your One Percent

Note: This is the first in a series of blog posts aimed at providing lessons learned from an experienced field service management business owner.

By David Crary  

I have been a business owner for over 30 years now and along the way I have found you learn something new with each year, business, staff, and economy.  Owning three different businesses over the past 3 decades has shown me that I didn’t know everything from the start (like I thought I did).  I wish I had had someone to give me a few words of wisdom and tips when I started out.

So, as my late Christmas gift to all of you, I am providing you with a series of blog posts including the three things I wish someone would have told me when I first started out.  Who knows, maybe you are just starting up and could use some advice, or maybe you are well on your way but want 2013 to start off on a great foot.  Either way, check them out and provide your own in the comments below for others to benefit from!

Words of Wisdom #1: Put 1% of your revenue away each month.

We all know how important it is to save money.  The issue most business owners face, and just people in general, is that we put all of our money into the one account we are constantly taking money out of, like a checking account. 

My suggestion to you is at the end of each month, take 1% of the revenue you made that month and put it into it’s own separate account.  This way you are not using it without even knowing you are digging in to your savings.

The extra money can be saved up for any number of things.  Maybe there is a really nice piece of equipment you know you want to purchase for your landscape management business but just don’t have the budget for.  Perhaps you run into an emergency and need the cash to fix a vehicle for your snow plowing business ASAP.  Or maybe you will just hit a tough year with a bad economy and will need to dig in to your saved up stash to get by for the year.  Whatever it may be, it never hurts to have a savings fund going for that “rainy day.”

When I had my irrigation business, I never put any of my revenue aside.  It’s not that I wasn’t saving money or low cash, but all of my money was in one account that I accessed every day.  I just figured it was sitting there so I could use it.  Then when a piece of equipment broke, I’d dig in to the fund I had all of my revenue in.  This isn’t the worst thing you could ever do for your business, but wouldn’t you rather have a separate fund of savings you can dig in to instead of your main collection of revenue?

Not only is it good for the times when you truly need the money, it is also a good form of discipline.  We, at times, can become greedy and just want to spend our money right away.  Don’t get me wrong, it is fun to go out and splurge on a big purchase or be able to go out to dinner a few times a month!   But think of how much more financially responsible you will be if you can live off of and run a business off of 99% of your revenue instead of 100%.

1% probably doesn’t seem like a lot, but trust me, it adds up.  I only just started doing this a year or two ago and I have definitely seen the benefit of it.  It not only makes me feel more secure knowing I have a backup fund for any expenses I may come across, but it also has helped me be more responsible with my money. 

One of the best things about opening up a separate account to store 1% of your revenue is that you don’t see it every day.  If you are anything like me, if I don’t see the money, I don’t think I have it to spend.  Saving the money for a rainy day will definitely pay off when you are faced with an emergency, or are just ready to make that big purchase for your field service business, without draining your entire bank account.

 

Don't miss tomorrow's post to see the one thing I learned not to fear anymore as a business owner.