05 January,2021 12:51 PM IST | Mumbai | Brand Media
Sumedh Basani
Owning a business is something that many young entrepreneurs strive for but not many prepare for. It is a road with no directions or set guidelines that requires constant sacrifice and tons of work.
Sumedh Basani is one of the most influential insurance consultants of his generation. Successfully reaching the top and pooling production from several partners he has been able to acquire a position very few are able to reach in his industry.
According to the young entrepreneur, being successful often means a great deal of sacrifice even when you make it. This is rather different from what most would consider, as success for most people means spending freely, living the "good life", and enjoying in excess + abundance. Sumedh explains how he made many sacrifices in his continuous journey in business even when many would have considered otherwise.
"The truth is everyone wants to enjoy the fruits of their labor, but how much should we indulge is the real question," Sumedh states. Sumedh goes into detail on how living below your means and staying "broke" is the best path for new entrepreneurs. Sharing his experience, he explains. "People tend to spend their money as soon as they get it. As their business grows their income grows, and so do their spending habits. Most never end up saving anything at all and feel obligated to spend with their new found wealth. They often fail to invest their income back into the business to allow it to grow to another extreme. This mistake is constantly made by many new entrepreneurs and ends up hurting their business by stagnating growth."
Small business owners are often victims to their own spending habits, and fail to set aside money to push their companies to new heights. Owning a business is stressful, and at times rewarding yourself seems like the right thing to do, but ultimately it is better to manage stress, control emotions, and pay yourself first rather than living expensive.
In addition to this, Sumedh explains the importance of being efficient with your taxes. Setting aside 30-40% of all business income for taxes and utilizing the proper tax procedures to maximize your business's retention is key. A good tax preparer that understands your specific business needs will do wonders to your financial retention.
Sumedh has had a great deal of success within his companies due to his spending habits. His secret is that he continues to live well below his means and puts more money back into his businesses to allow them to grow. Driving a 2000s SUV daily and living with a roommate, he doesn't portray a heavy CEO lifestyle that many entrepreneurs in his position would. Instead, he exercises a great deal of financial regulation and restricts himself from spending aggressively. Cutting back on the luxurious lifestyle and saving money is the first thing Sumedh advices. "It's the small things that add up," Sumedh explains "meal-prepping, flying coach, driving normal cars, splitting rent when you can, and living below your means will afford you a larger budget for your business. As long as it doesn't compromise the integrity of your businesses model all savings should be welcomed."
The idea here is to consistently increase the business budget and investment as the business grows. This will cause the business to increase revenue and ultimately afford you a larger income when needed. Ultimately, every dollar that you save should be put to work toward growing your business and overall income.
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