Tony Pennells

I’m ready to launch, and thank you for having me on the show.

Tony Pennells

I’d be happy to.

I think the specifics here are so many entrepreneurs and business owners, they get into business because they’re passionate about a contribution and what they want to do but equally they get into business because they believe it’s going to give them to create a freedom, of time freedom, of money freedom and opportunities that they wouldn’t have if they just stayed in a regular job and obviously a gateway to balancing work and life.

However, the reality of what we see is that so many business owners out there end up working longer hours, and it can be very easy to get trapped in their business. Consequently, often they are taking irregular and poor wages and income personally from their business. So they’re working longer hours for lesser income ultimately 80% of businesses end up closing. They never end up selling for some value that allows them to build that personal financial freedom which is needed in balancing work and life.

Tony Pennells

That is true but there are other key elements that new people in this space face, key mistakes that they make which acutely increase stress. It is not necessary if they just know how to set up the business correctly.

Tony Pennells

Totally. It is about balancing work and life both simultaneously, isn’t it?

Tony Pennells

Well, if you start with a context difference. Most business owners come in and they start looking and saying, “How do I serve my client? What do I do here? How do I propose my product? What will they afford and the like?” That’s not quite the right place to start.

If you change your context, and you look at your personal world and your personal life. Let’s say if the two of you were starting a new business, you’re sacrificing the regular income that you might get from a job, and the two of you are diving to business.

The actual starting point is to say, “Okay! There are some facts of life.” You need to keep a roof over your head, you need to keep closing your back, you need to keep food on the table, and you’ve got a certain level of life that makes life worth living. It just makes it enjoyable, makes it okay, while balancing work and life.

So what do you need? How much do you need in your personal world?

Forget about your business. Just forget about that. Divorce it away from you.

How much do you need to personally be okay and then identifying that number. And a ballpark there to start with is a good enough number and I recognize it for a lot of businesses when they get it going. It is a case of reinvesting in your business and getting it up and firing and running but you still need to wait. You still need to keep closing your back, and you are still required to keep a roof over your head.

Leave your business out. Divorce it. Then you go, “Okay! How do you make sure that you have that amount coming to you regularly?” And it needs to be regulated. You need to have the confidence of knowing that in your personal life, you have that regular income and revenue coming in.

If you get that number of how much do you personally need in place, a massive amount of your stress will go away from your personal world.

And then for a lot of business owners, they go, “Okay. You need to set that paying yourself out of your business right up front.” Set up a regular payment that comes out of your business to you personally and don’t mix your personal and business money. You keep them completely separate. Treat it like a completely separate person, a completely separate entity or business.

You need to make sure that your business isn’t you. Your business is set up separately to you. You don’t mix your personal money and your business money. You don’t take your hand into the pot of your business account and take out personal expenses open above that regular amount coming in.

The business equally needs the certainty of knowing what its expenses are and it’s treating you as an employee in that regard.

But wait, beware of one thing. Your business isn’t you. You need to separate these two entities – you and your business. You must never commit the blunder of mixing your personal money and your business money.

For the business, you are just an employee, so you do not have the luxury of dipping into the coffers of the business and pulling out money for personal expenses for balancing work and life. The enterprise needs to decipher its income and expenses for certain. Do not disturb that estimate.

Tony Pennells

True. So, if you now look at the structure of your business and allow this to actually happen. If you talk about what it looks like, and then we’ll go back and look at what are your circumstances coming in.

For your business to give you that regular income, it needs a reserve. It can’t be running on empty engine. It can’t be running on petrol fumes.

You’ve got to have at least 3 months’ worth of expenses as reserve in your business to allow you to have the confidence of having that certainty of that income coming out to you.

So if you’re setting your business up for the first time, you’ve got to make sure that you actually have reserves to carry you through that initial start-up period right else you will face challenges in  balancing work and life.

If you don’t, dropping all your other income strings out and say, “I’m going to dive into this business full -time.” My preference, if somebody is asking me for advice and recommendation to start a business, I’ll say to them, “Have two years’ worth of living expenses set aside so that you could be yourself breathing, reaming time to allow your business to get started, get going, and get growing because you still need to eat.”

If you don’t have that reserve, maintain a part-time or a full-time job and start your business part-time to get it through that early phase, to get the revenue coming through the door until you can see that sustainability, and that it can afford to give you the basic living requirements.

If your business isn’t sustainable, you’re going to create acute stress in your personal world and you’re going to make short-term business decisions. You’re probably going to end up being a statistic with a failing business ultimately.

Tony Pennells

Let’s be honest, and tell the listeners here. And thanks for talking me up there as well.

Tony Pennells

Of course! Business world is the place where you tend to make these mistakes and you are very private about it. You learn so much from these mistakes while balancing work and life. You don’t want anybody to feel and think things are tough for you because you want to create this illusion and all that fluff of success. It can be a very lonely place because you think, “Maybe it’s just me.”

However, the reality is that there’s a vast majority of people out there making these basic mistakes while balancing work and life because they’re not getting the right coaching coming through. They’re just sitting quietly trying to figure out themselves, presuming that they should be able to know this.

Tony Pennells

The key is always to begin with the ultimate end in mind.

The game of money is to break the link between your time and money to ultimately create a time freedom, to create your freedom so you can live your life on your terms without exchanging your time for money. Ultimately in all of our lives, we will reach a point where we can’t work for money anymore.

Create your freedom so that you can live your life on your terms without exchanging your time for money. Because ultimately in all of our lives, we will reach a point where we can’t work for money anymore

Something will happen physically or mentally or we would just “Hey, I’m out of here,” Call it retirement or whatever you like but we will reach a point where we no longer want to exchange our time for money.

So if you know that, why don’t you step-by-step reduce the reliance on your working income both from your business, job, or career?

The way to do that is you need to build what I call a freedom generator.

Tony Pennells

You will need to cull the money out of your business to create the desired freedom while balancing work and life. It cannot stay locked in there forever. It’s all got to come out regularly or it’s ultimately got to be an exit strategy that you’re getting enough money out of your business to build this freedom generator, which is a collection of investments and assets, that pay cash flow which allows you not to have to exchange your time for money. That’s the end context in mind.

How do you secure your personal financial world outside of the business?

When you’re starting out a business, you are going to think “That so seems fine down the track.”

You never begin any endeavor without knowing how you’re going to get out of it.

From a business owner point of view, what I’d ask your listeners if they’re starting a business for the first time is, “what type of business are you actually building?

Tony Pennells

This is your expertise, your ability to exchange your time for a premium revenue out there in the market place. That type of business will ultimately never sell because your clients come for you and somebody can’t easily replicate you. but will ultimately, it won’t sell or if it does sell, will not sell for a premium price.

So, if you’re building that type of business you need to be looking right from the early days at how do you maximize your revenue, keep your expenses low, and have more chargeable hours out there in the market place.

You need to gradually take out of the business very early on enough so that it’s more than just enough for you today. It must also be enough for paying your future self-first, for not having to grope around balancing work and life.  Also, for building your personal freedom generator because that business will probably never have a real cash event at the end.

A business where each step of your strategy and the entire plan is making you become an increasingly irrelevant piece of the overall business machinery.  

Step-by-step, the business is going to rely on you less and less to the point where it ultimately doesn’t need you at all. And so, balancing work and life becomes comparatively easy for you.

Tony Pennells

That’s the kind of business most people delude themselves that they’re actually building.

If you are building that type of business, what you’re trying to do is bring people into your team who are actually better than you. In certain skills and certain areas, you’re bringing people who can do better than you and help you out in balancing work and life.

Tony Pennells

And, in that business, because the likely who had there is you actually playing a longer game. So light up the gate. What type of business are you actually building? If you’re building these two types of businesses, then what you’re forgoing securing your personal financial world. You’re playing a game of Russian roulette. It’s a dangerous game.

Tony Pennells

It’s a stressful situation. My last business was very much like that as well on the personal side. But, the reality of it is that because of those efforts which I put in balancing work and life, I had built my freedom generator. I had enough income coming in that I didn’t need any income or revenue from that business.

I was building a business, we had a hundred advisors build-up and were pretty fast-growing but, with the fast-growing, brings a lot of potential stress to it. However, ultimately I was then able to exit out of that business as well when the time became right but I’d already built my freedom generator leading to perfection in balancing work and life.

Tony Pennells

Considering whether to get a VA or build a team depends on what circumstances you have around you at the time you’re starting the business.

If you’re starting business initially without much capital, and you need to draw a wage from the business I would recommend that you would start with the business that’s built around you. You would start with yourself be your own personal assistant and do the grunt work yourself. Get things up and running in order to make balancing work and life possible in the long run and do not rely on assistants so early for the help.

I would focus on the front end of making sure you’ve got your phone ringing, and that you’ve got a steady stream of new clients coming in and you monetize the business as fast as you can. That’s where I put my image in my focus before I put the image into admin cos.

I’ll then make sure that as my time was being truly used in areas that we’re serving clients, I would then bring administrative support behind like a VA to help me get more time for dollar productive activities.

Nonetheless, before I invest administrative cost in the business, for me the ability to get your phone ringing, your lead funnel created, or flow of revenue into your business is a far higher priority in terms of getting to that space.

Get the money coming in regularly, build up a reserve in your business, and then deliberately start transitioning across to a Business Two, where you’re building a team, if that’s what you want because that’s an investment in system’s processes and people. That’s going to take time as well as money.

Tony Pennells

I definitely agree with you with that.

I think the mindset of knowing what you’re doing as opposed to making decisions that are unhealthy for the business is where that balance sits.

For me it’s a case of saying “Where is your most productive time?” and I do agree with you.

I think knowing the basics of how your business ticks, how the leads are being handled, how the clients are coming in, and what social media is working is actually important. It’s the balance of knowing where you’re than being inefficient in it.

One of the things that I see quite commonly is people that are getting into the online marketing space. They will get caught up in doing things like trying to build a lead magnet, a free eBook or something offering at the market place to be a value to allow somebody to opt-in on to their list for them to start a conversation with them. They will sit down and go, “Yes, but I want to be the copywriter, the editor” and all that sort of nature. And you go, hang-on. That’s horribly inefficient.

You can get one of those outsourced for $50, and yet you’re going to go and waste 2 or 3 months to do something in order to figure that path out. That’s not efficient use of your time as opposed to something that is, for knowing your expenses, the social media that are working, and the things that bring revenue to the front door. It’s not always easy because its debt by a thousand cups when you’re starting a business.

Tony Pennells

I’ll take the one thing that you said a little earlier Luis, is your friends who are multi-millionaires with multiple businesses, kudos to them!

There is a step beyond it, and that is not even needing your businesses at all. Having a collection of passive investments that set up the cash flow that in their own right can generate enough income without you having to look after it money trip that you are financially okay.

Also, it’s important to learn balancing work and life because even your multi-millionaire business friends, and business owners, at some point are not going to want to put any day-to-day time in their business. They’re not going to want to have a look over that and watch those businesses.

So even then, they’re in a transition. They need to make sure that they’ve secured their personal financial world, while balancing work and life at the same time. In fact, very few people in business ever actually do this. People in business quit their businesses and it’s their business net worth as their personal net worth and personal wealth, but that is not the case.

Tony Pennells

I’d be happy to.

The biggest tip I’d be suggesting there is for most people on this call, you are actually building the first type of business. You’re building the business where it’s built around you and your expertise.

If you look at how much you need to  make personally, you also need to be working at very quickly, how you take enough money out for your future self – the You who’s not working, that you can actually put money aside outside of your business to build your personal world.

Make sure that out of every dollar you’re taking out of your business, a percentage of that is being put aside for the future You, the You who needs to rely on a different income stream coming in.

Tony Pennells

And thank you for having me on the call guys.