Everyone Has Debt When Starting Out

Summary

• When you launch a business, you're inevitably going to face some form of debt; it's all about choosing the type that's right for you.
• Opting for financial debt means taking money from investors, which allows you to afford skilled employees and pay them well.
• Avoiding financial debt often results in management debt, where you end up with under-skilled staff that require constant training because you cannot afford to pay more qualified personnel.
• Regardless of the type, debt is an unavoidable part of starting a business; the key is deciding which kind you're better equipped to handle and pay down eventually.

Video

How To Take Action

I would suggest starting by understanding you'll always have some debt when launching a business. So let's figure out which kind you're more comfortable with. Now, if you don't like the idea of owing money to investors, get ready to invest your time instead. That means you'll have to spend a lot more coaching your team because they might not have all the skills just yet.

Here's a good way of doing things without much money: focus on hiring folks who are eager to learn even if they don't have every skill right now. This way, you'll save cash on salaries. But remember, you'll need to teach them to get them up to speed—think of it as an investment of your time.

Also, paying your staff well when you're able to is super important. It will keep them happy, and they'll stick around longer which means less training for new people in the long run.

Now, if you choose to take on financial debt, use that cash to get skilled employees from the start. They'll need less training, which saves you time so you can focus on growing your business.

Here are your steps:

1. Decide if you're more okay with time debt (training folks) or money debt (loans from others).
2. If it's time debt, start hiring eager folks who want to learn but might not have all the skills yet.
3. Train them well and treat them right, so they grow with your company.
4. If you choose money debt, use the funds to hire the best people you can.
5. Always plan how to pay back any kind of debt you have, whether it's time or money.

No matter which way you go, make sure you're always planning ahead for how you'll eventually handle that debt. That's the secret to keeping your business healthy.

Quotes by Alex Hormozi

"whenever a business starts you always have debt it just depends on what kind of debt you want"

– Alex Hormozi

"you can either have financial debt so you take on debt from investors then you can hire people and pay people well"

– Alex Hormozi

"you can not take on financial debt and then you incur management debt because you have people who are under skilled for the jobs"

– Alex Hormozi

"then you have to keep training all these new people because you can't afford to pay the right people"

– Alex Hormozi

"there's always debt that you encourage it depends on which type of debt you'd rather pay down later"

– Alex Hormozi

Full Transcript

whenever a business starts you always have debt it just depends on what kind of debt you want so you can either have financial debt so you take on debt from investors then you can hire people and pay people well you can not take on financial debt and then you incur management debt because you have people who are under skilled for the jobs and then you have to keep training all these new people because you can't afford to pay the right people like there's always debt that you encourage it depends on which type of debt you'd rather pay down later