What’s so great about being cheap?
One of the richest men of all time, J. Paul Getty liked to talk about it. He brought it up because he liked to win and people were always asking him for advice. Being such success in his business gave him insight few had.He knew that what he called the “frugal” person had a much higher likelihood of becoming successful than others.
So why was such a wealthy man such a fan of being cheap?The sad fact is that most new businesses fail. Statistics show that the reason most new businesses fail is due to lack of planning, specifically in the area of funding and finances.
The reason is because of margin of error. . The result is that they run out of money before they can get their new income streams up to a high enough level to cover expenses. well enough, fast enoughIt’s not that they don’t do well. It’s that they don’t do
They don’t have a cushionCalling the person who is starting a new business frugal, a tightwad or a skin flint is not derogatory! It’s a compliment. It shows wisdom. It shows they are thinking ahead.
So they fail, unnecessarily.
This margin of error gives them higher odds of surviving until sales reach survival levels. On the other hand, spend thrifts have no margin for error.
The cheap entrepreneur can handle surprises better than the spendthrift
They are more likely to have money left over in their budget to cover surprise expenses or slower than expected sales.
Listen to J. Paul Getty.
He knows what he’s talking about.