The Pinched Income

Jonathan is trying to start a business but has no business experience. Every time he makes a sale, his profit goes into the next setup or his household funds. Dave helps Jonathan figure out what could be missing.

QUESTION: Jonathan in Houston is trying to start a business but has no business experience. Every time he makes a sale, his profit goes into the next setup or his household funds. He doesn’t feel like he’s getting ahead with this gig. He’s on track to earn $40,000 this year and he used to make almost $70,000. Dave helps Jonathan figure out what could be missing.

ANSWER: You’re getting something out of it if you put the money in household funds. My guess is that you’re not making enough profit yet. You are on track to be living on $40,000 a year and you took a pay cut from your old job. That’s not a permanent thing, but that’s the reason for your pinch. You are used to having $5,000 a month and now you’ve got $3,000 a month.

You can either sell the car that you owe the most money on or turn this thing around and get your income up really fast. The problem is not that you’re in business for yourself—it’s that your personal income went down dramatically.

I want you to hear me say out loud that there’s a reason for this pinch, and it’s because your household income is down. That’s why you’re feeling a pinch. The only way to solve that is to get rid of some of the outgo, such as sell your car, or get your income up. But you don’t have to have money to get your income up. There are other ways to do marketing.