I had the honour of being invited by PT. Unilever Indonesia Tbk to speak with some of their partners in distribution. 
An amazing vibe is in the air when you’re in the same room with so many entrepreneurs. These people are the real deal. They are Indonesian business owners / runners. They have shops, they have employees, they have regular customers and suppliers.
The thing is, even though business is my number one choice of Active Asset, for me it doesn’t matter where your income comes from. So whether you’re a bank clerk, a marketing director, a shopowner or a famous singer, Income is Income. In my calculation, income means numbers. I’d care more about how much is left after all your spending.
Consider these :
A singer earning Rp 60 million per month, spending Rp 6 million per month on shoes alone. Don’t ask her about the clothes billing – which of course she claimed would support her career. A marketing director earning just under Rp 100 million per month, flipped out because she just realized although she can afford 2 lovely Mercedes Benz, she cannot afford 5 salt water aquarium in her home.
A bank clerk with Rp 8 million per month take home pay, happily saving Rp 3 million per month going steadily into investments, still upset because he cannot put his children in the same international school as his ‘bank executive’ brother.
A shop owner’s business earning Rp 200 million per month. But after all the expenses, he takes home Rp 10 million per month, saving Rp 3 million per month and is super worried about renewing his Rp 75 million franchise fee due next month.
For those of you who are into business, hurrah… we’re in the same game. Keep it up! You’re having the time of your life. Just don’t get too excited because owning or running your own business is not the purpose of the game. Let me remind you that the purpose of the game is how to shape your personal finance into financial freedom. Your business will definitely be your vehicle towards that ultimate goal. However, bear in mind, as I mentioned earlier, income is income. Income translates into numbers. You can lie to yourself, thinking that last month business revenue of Rp 1 billion is your income. The fact is, it’s your business income, not your personal income! Numbers don’t lie.
My tips for the business owners / runners are simple…
- Separate your business from your personal finance. An accountant will do the trick. I have regular schedule with QM chief accountant to discuss the business’ numbers. I love it when she shouts at me, acting up a little bit, knowing that she is so important in developing the business and enjoying sometimes she can be bossy to her bosses
- Take out a form of salary from your business. Believe me, it’s worth it. Those who works deserve to earn their salary. Those who put money in, deserve to earn their dividends. So if you do both, work for your business AND have money tied into the business… you deserve BOTH! Double income… cihui kan? The thing is, when you have a start up company, I’d recommend you delay taking up dividends to make sure the company runs properly without near future cashflow problems. But do take up salary, don’t delay this.
- Never let your personal finance support your business. It should be the other way around. Most start up companies will struggle in its early years and will require more capital from the owners. But don’t you think something is wrong if someone said this to you : “Setiap bulan kami harus inject capital baru ke dalam bisnis kami!”
- Why stop at a business? Go beyond a business. Go try a second business, a third, fourth, sixth businesses. Go try properties and go try developing your personal stock portfolio. Not all of them are going to work out. Isn’t that the fun part?
My insurance salesperson friend Adi (who is very proud to be called a salesperson ) had his favourite quote this week…
The more you learn, the more you realize you don’t know.
I totally agree with him… so if you do own or run a business, you should’ve known that there are more beyond businesses. If you don’t feel that and think running 1 or 2 shops makes you king of the world, man you don’t know what you’re missing out …
Finance Should Be Practical!
Ligwina Hananto
