The Financial Runway That Decides If You Survive

Welcome to today's episode of Black Belt Startup with Ferris. Thank you for tuning in. So what's new in the world of entrepreneurship? What if I told you the biggest threat to your business isn't competition? It is the clock. Yes, it is the clock. Not enough time. Your financial runway. And that is, that's what takes most businesses down. And more than rejection, slow sales, or even lack of demand, running out of money is the number one reason businesses shut their doors. And also, for those of us, or for those of you who are thinking of starting a business, the fear of running out of money That's what keeps a lot of what I call would-be entrepreneurs stuck in jobs that they don't even like. And that's why today I want to talk about the financial runway and how to make sure that you don't run out of time, because unless you have unlimited access to cash, you are working with a fixed runway. And there's this invisible hourglass that flips the day you decide, I'm doing this, I'm starting my business. So in this hourglass, every grain of sand that slips through, through, through it, it is time. It's, uh, if you don't have a mechanism to slow, uh, the, the slipping of the sand or or add to it and extend that time, your business never even has the chance to take off. And I'll never forget when I expanded one of my companies, you know, here overseas. Same services, different market. You know, in my mind, we've done this before. We knew how to sell, how to market, how to deliver. We found some great local partners, and it was in Dubai at the time. We put together a solid plan, and we set aside a 6-figure budget because we had become profitable by that time in the US, and we figured we want to expand. And we thought, with all the know-how we've had and the name in the industry, cash flow positive in 3 months, no problem. But reality Everything took longer. Finding leads took longer in this new market. Getting leads to sign up for our services took longer. Getting paid took forever, much, much longer. And then it took us over a year before we started to sign up sizable contracts and, and help us— that helped us with the cash flow. And while that business eventually worked out and we grew it, we grew it to 7 figures, it put enormous pressure on our finances in the US and also enormous pressure on me. As you know, I had to support this other company that is 12 time zones ahead. It was not a— was not an easy feat, but that experience taught me that it's not enough to have skills and confidence If your financial runway isn't long enough, you'll burn out before the business can catch momentum. Or if you're not burning out, it's going to be a very tough struggle, and you might end up having to shut the doors or borrow money or do things that you did not plan on doing. And that's why today I am sharing a map every founder needs, and there are 3 components of what I want to cover today. One is how to develop your own and your first 6-month runway. 2, how to stretch that runway long enough to scale, and then how to weigh the pros and the cons of self-funding, borrowing, or bringing in investors or partners. There is an inflection point in most businesses where to grow to scale, you need some, some infusion of capital. And, and next, in our next episode, I will be covering in, in detail everything you want to know about sources of funding. But today I just will touch on— I will touch on the pros and cons of self-funding, borrowing, or bringing in partners and investors. So whether you're just starting or maybe already started a business and you're running a business but your finances, your finances are not in order and they feel shaky, I promise you, you'll walk away with practical strategies including some tips on mindset and maybe even a new perspective on time. Now before we dive in, a couple of Housekeeping items. One, whether you are watching or listening live or tuning in later, I'd love to hear from you. Let me know what business challenge you're facing. Are you still in this vetting the idea phase? You're still thinking about taking the leap and starting your business? Or maybe you've started and you're struggling with marketing, with sales, with maybe hiring or retaining employees. Let me know what sort of issues, what sort of struggles you're going through. I'd I'll be more than happy to answer them. You can leave me a comment, or if it's something very personal, you can email me at feras@startupwithferas.com. Feras spelled F-E-R-A-S. And I keep all that information confidential. I take a look at it. I don't share this with others. And then I will, I will, um, send you either some, some resources or give you some, some advice that I hope will be— you'll find helpful. A lot of people helped me along the way, and And I'm here to help you succeed and avoid the mistakes that I made, and also some of that gray hair that was a result of all these years of, of starting and launching, growing businesses, some to 7 figures and one to 8 figures. And the other housekeeping item is that every Thursday, starting actually today, we're moving the time to 1 PM Pacific, 4 PM Eastern. We go live with this, with these episodes, and I cover a business topic, and then I answer questions that we get, that I get from the community. So if you want to get your question answered real time, mark your calendar, subscribe to the channel, hit the like button, and this way you make sure that you don't miss, um, the next, the next live stream and, and the ones to come. And again, I'm happy to answer your questions in comments or email me if you don't get, get it chance to participate live on these, on these episodes. Cool. Let's see if we have any questions from the community. We are good so far. So jumping back in, before we go into the mechanics of, of the financial runway, I want to talk about mindset, and there are 2 principles I want to cover. One is frugality. Eric Schmidt, the former CEO of Google, once said the great founders are frugal. They understand what money needs to be used for, and then they, they understand what money needs to be used precisely for certain areas. So raising money, or maybe using your own resources, is one thing, but How to use the money and where to use it, when to use it is really important. And that is absolutely true. And as you'll see in the sample runway worksheet that I'll walk you through, you'll have to— you'll be forced to make tough decisions and trade-offs on how and where to apply your financial resources, both in personal life and also in the business. So that's number one thing. The second principle is on being conservative in your financial projections, in your projections in general in the business. Now, I'm all for optimism and positive thinking and bold thinking, but bold thinking, bold, bold, bold thinking, you need to, You need that optimism. Entrepreneurship is all about dealing with uncertainties and having faith in your ability to do something and do something big. So I'm all for that. But at the same time, with that optimism, that optimism has to be grounded in reality because numbers on spreadsheets can look fantastic, But the truth is sales will take longer than you expect. Delivering what you sold and making sure the clients are happy will take longer, and then customers will pay you later than promised. Now ask me how I know. Trust me, this is from the trenches. So when you are planning for your business, or maybe you've already started a business and now you're planning for the next quarter maybe the next 12 months, it's always better to be conservative in these projections because if, if things go well, you come, you come out on top. And then if things take longer like they usually do, you're still in the game instead of being forced to shut down too early or to again make certain decisions, bring in a partner or investor that you really did not want to to partner with. So, so 2 things here from a mindset perspective. One is this mindset of frugality. The nice office, the nicer office in town, you know, can wait a little bit. Um, the latest version of the iPhone can wait for a little bit. We'll walk through this in, in when, when I go through the, the financial, uh, worksheet. Uh, but keep that concept of frugality in mind, although it's very hard these days to do so because we are constantly bombarded by marketing messages to spend on things we don't need, at times with money we don't have. So, so this mindset of frugality is really, really important. The second one is on being conservative in projections. around sales projections, about expenses, and we'll walk you through some of those examples. All right, so this blueprint that I'm about to share, the financial runway worksheet, is based on a 6-month timeline, and I have it set up where if you are maybe doing some— you're side hustling today, or maybe you're still working in corporate and you're planning your move, I have it where there are 3 months for you to plan, And then 3 months for you to actually transition into, into a full-time. So you'll see that in the worksheet. And then it— but it doesn't have to be, uh, 6 months. If you have more time, you have more resources, you can collapse this timeline and maybe do everything in 2 months. Or if you have less time because you're dealing with personal issues or you have just a lot of obligations Maybe you're putting only a few hours a week instead of maybe 10, 15 hours a week. Maybe you need to make this a 9-month runway. So it doesn't matter really. Don't stick to 6 months because I shared it. I like this 6 months and I like you to put a plan behind it. I think that shows commitment and it needs discipline to launch that business and go full-time in it. But if you need to collapse it or expand it, you can do so. And also, you know, one thing to keep in mind, if you expand this runway too long, it just may affect your momentum. And then if you collapse it to a few weeks, it probably means that you're cutting corners. So 6 months is— a 6-month runway, I think, is a good approach, good time window to plan around. All right, so let me share with you this sheet. And, and by the way, I do have a link, and we'll make sure this is in the description, where we, we show you, um, what I, I have. Uh, you can make a copy of this spreadsheet. It's a Google Sheet with a lot of tabs. You can make your own, and then you can customize it based on your numbers and based on your data. So let me go and share. It is at bbsu.net/runway. Again, bbsu.net/runway will get you to this financial runway. It's a Google Sheet worksheet with a lot of tabs. Make your own copy and then you can insert your own numbers. So now let me just— give me a second to share. This. Okay. Where is the sheet? I thought I had it shared. It doesn't look like it is shared, and now I'll share it again, and it's going to be right here. Cool. All right. So you should be able to see this on your screen, and then for those of you who are listening. I think I'll— you should be able to follow. Uh, I'll, I'll, I'll, uh, ideally, you, you know, you watch this on your screen, but, uh, in case you can't be on screen now, so you can, you can definitely follow as I'll go through the details. All right. So here you see that, uh, go to the first tab, personal expenses, and that's where I want to to actually have an inventory of your expenses. So right here, again, I have some typical personal expenses, um, depending on when you live, where you live, um, what city, uh, depending on if you're single or maybe you have a partner, you have children, These numbers will vary significantly. So don't— if you live in downtown San Francisco, this is different than if you live in Tulsa, Oklahoma. So you put in the numbers that work for you. In column D, I have the sample data. In column F, you can enter your own data. So going down the personal expenses, I have food, childcare, medical, housing, transportation. Civic engagement, internet, other necessities, all that good stuff. At the end of the day here, at the end of the year, you need $50,000, and then taxes and other, other things around that, that you have to do, it adds up to $70,000— sorry, to $60,000. So that is on, on the personal side of things. Now you might also This covers the expenses. Now you might also have some individual— individualized expenses. You might have loans that you have to pay, maybe elder care for aging parents or relatives. Maybe you still want to contribute, contribute to your retirement although you're building a business and cash is tight, but this is really important for you. So I have these categories here: education and training, professional membership, hobbies, recreation. Maybe you plan this holiday, this vacation for $3,000 here. That's travel and vacation, gifts and donations, sports activities, pet care. This list of individualized expenses based on the assumptions I had, it adds up to $10,000. So We have $10,000 for these custom expenses and then $60,000 from sort of shelter, food, rent, all that good stuff. It adds up to $71,259. That is almost $6,000 a month. So this is what you need to bring in, not in terms of revenue but in terms of money, net And a pro tip here that you should— if you're starting a business, you have to know the foundations or the fundamental concepts in accounting and finance. Revenue is not cash flow, is not profit. You have revenue, you have expenses, then you have your margin, your profit. Um, so, so do learn about the basics of accounting and finance. I have a playlist on, on accounting. We'll add the link to to it in, in the description. And if you have a specific question about that, you know, let me know. I'm not a CPA, but I've been around the block enough to, to help guide you on how to make sure you understand these numbers. But check out that, that playlist on, on finance and accounting and understanding just, just the foundations, the fundamental concepts in, in finance. So, so you need $6,000. Back to our worksheet here, you need $6,000 to just to survive. Now, when we talked about frugality, no judging here, but if this amount, $6,000, is just— it's going to take you a long time to attain because you need to learn marketing and sales and you need to The sales cycle maybe for your— the service you offer, maybe, maybe longer. So you can bring this number down. You can go down. Let's start, for example, with hobbies and recreation. I have $3,000 here. Maybe cut this down to $500. Travel and vacations. You're planning on a trip to the other coast and maybe do something local. For that first year of the business because you have, again, it's all about trade-offs. Sports activities, maybe you're part of, and hobbies, maybe you have 3 hobbies, maybe cut down to 1 hobby. I still want you to be active physically. You know, I want you to be engaged emotionally and have relationships, you know, maintain and grow the key relationships in your life. But you have to, there has to be a trade-off between the money that you have and the money that you have to put aside for the business. So, so look at maybe I'm, I'm, I'm renting in this nice apartment in downtown, maybe I can have a roommate and go to something that is a bit more— that's less expensive. So you have to make some trade-offs as you plan to start and grow that business. So potentially, ideally, you want to bring this number down because you want to have time You want to extend the runway, right? If based on this amount, $6,000 a month, your runway— maybe you only have $18,000 in your savings and that you want to, you want to invest in this business. So if you can bring this down, if you only, if you only have $18,000 and your monthly expenses are $6,000, that means you'll have a 3-month runway. Now, if you can cut down this amount from $6,000 to $4,000, then your runway is going to extend into 4 to 5 months, right? So it's all about trade-offs, and starting a business and growing a business requires you to make decisions on where is it and when to make these sometimes tough financial decisions, so that you can have longer runway, so that you can increase your chances of of this business taking off. So that is on the personal side of things. On the business side, again, I'm listing things here to be thorough: office rent, utilities, office supplies. You need a website, website development, marketing, professional memberships. Maybe you're an accountant, you need to be part of the California or the Texas Association of Accountants, um, you know, insurance. Business licenses, legal fees, accounting, right? These add up to $25,000 again based on the assumptions that I entered in this worksheet. In column F, you can add your own numbers. And there might be also some specific in your business, in your service, in your— the consulting business that you have. There might be specific expenses related to the business. For example, you might need to have a, a software subscription you're an HR consultant or an IT consultant or maybe a financial advisor, you need to buy certain software so that you can deliver your service to your clients. So you have to account for that equipment if your business requires equipment, tools, material, certifications. All of that also adds up. In my example here, I have $9,000. So we have $25,000 for the regular typical business expenses, and then $9,000 for these business-specific expenses, it adds up to $34,000. That's $3,000 a month roughly for businesses. So we had $6,000 from— for our personal expenses, and now $3,000 from our business expenses. So if you had $18,000 as, as the business, that, that initial budget, initial investment that you put in for this to start this business. If you have $18,000 and your expenses, personal and, and business, are $9,000, you'll only have a 2-month runway. So go back with this mindset of frugality and look at every expense that you listed. Office rent— do I really need an office initially? If your service, if your consulting services require you to meet clients somewhere that is nice. You can't do it in the garage or in your room or your office at home, then yeah, maybe sign up with WeWork or one of these services where you can rent a room when you need to. Maybe again, everyone's conditions or circumstances are different. Maybe you don't have enough room in your, in your, in your home or in your house or in your apartment because maybe you share with someone else. You might have to be somewhere else so you have some peace of mind. so you can be more productive. I understand that. So, but you have to make that decision and you have to be intentional about it if you're serious about having, uh, having a longer financial runway, right? And then you look at website development. I want you to have a professional website. It doesn't have to— it does not have to have all the bells and whistles, and you don't have to go and hire the, the top designer. You can do something, you can go on GoDaddy. I don't I'm not affiliated with any of these services that I'm mentioning, but just so you know, you can go on godaddy.com or, or, or any of these services and, and get a website that looks okay, looks professional, uh, not, not top of the line, but looks okay, presentable. And then you can spend more time on, on the copy, on the text and the images, and making it a bit more personal. So take a look at these expenses when you are entering them for your business and then decide what you can shave off, what you can maybe reduce, and see if you can maybe instead of having to have $9,000 in income from the business, maybe you can drop it down to $6,000. So that will help you extend your runway. So that is in terms of expenses and in terms of, um, give me just one second here. Yeah, in terms of personal expenses and in terms of your business expenses. Now, in terms of that runway to launch, if you're in this— if you happen to be in the— in this— the— if you're listening and you're thinking of launching a business, what I mentioned so far is all about expenses and controlling, reducing these expenses. At the same time, the second mindset principle I mentioned was about being conservative in your financial projections. So what I have on the screen here, this is tab number 4 in the worksheet, is I assumed there are 2 phases here. Phase 1 is you're planning to launch the business, so there's zero sales. In column C, I have zero in sales. Again, you can enter your own data in column F because you might be already side hustling and you already have some income, so that's good. You can add that here. And if you have some recurring— if you recurring revenue, that's awesome. Let's say you do copywriting, you write, you leverage AI to, to, to do more research and, and make sure the, the copy is, is personalized and not just AI generated. And you offer the service to small businesses or business owners, and you have these retainers where you are charging $500 a month from 3 clients, that's $1,500. Awesome. Add that here in the spreadsheet in column F. But from a bigger picture, I'm saying zero sales in the first 3 months, and then you start to transition, you start to get revenue in months— month 4, month 5, and then month 6. So I have the numbers here on the screen: $3,500, uh, the first month, month 4, $6,000 in month 5, and then $9,500 in month 6. Okay, and then zero revenue in the first 3 months. So if you look at the chart here, my fancy chart, you'll see that this red line here is the expenses, the personal and the business expenses that you need to have to just to survive. Rent, food, you know, taking care of those who are dependent on you. And then according to this, the numbers I have in my worksheet, that break-even point will happen close to between month 5 and month 6. So it's really important if you want this breakpoint to happen sooner, You either have to increase sales or you have to reduce— you know, increase sales or increase revenue, or you have to reduce costs. There's no other way around it. Of course, you can borrow money, you can get investors. I'll talk about this before we end up— before we end the episode today, and I'll speak on— I'll have a deep dive on funding resources in the next episode, 2 weeks from today. But For now, this is what you see. You'll break even in month six because you have a lot of expenses and you have set aside some money to cover your basics. Now, if you happen to be, you have to have a lot of savings and and and and and you can do this for twelve months, then that's fine. But again, remember, if you expand, if you expand. This runway too long, I don't think you'll be able to, to build momentum. And maybe, maybe it's a sign that you're not serious about the business, starting that business, or maybe you just, you're too busy with other things, or you have personal things you have to take care of, or your, um, your, your full-time job is just taking a lot of your time. But extending this, extending this runway long, I think, just prevents you from building momentum. And the last thing I want to say about here, about this point here, is that you can, you can do this in 2 different ways. Some people, when it comes to entrepreneurship, some people go all in, and some people like to transition in. So, so that's really up to you. There is risk involved. I mean, you can mitigate some of that risk if you don't go all in, but also the cushy job, the benefits, the 401k, the, the PTOs, all, you know, all the benefits of having a full-time job. Those, those, that cushiness might, might actually prevent you from, from thinking seriously and taking action to help you build that business. So going all in, in my case, when I started my first business, it was after a devastating layoff, and it took me, you know, a little bit of time to recover from, from, from what hit me. Uh, and then, and then I couldn't get a job. The, the job market was very dry. That was in 2003. I applied to so many. I updated my resume the next morning or 2 days after. I, I was mourning for 2 days and crying. It was really hard. had a family to support. Um, but then I, I just did not get— I did not land one interview. So I was in a way forced into entrepreneurship with, with a co-founder, with an amazing co-founder. And then we said, you know what, we got to bring food to the table. So we went all in and we were putting 60, 70 hours a week. And then, and then we were knocking on doors, you know, getting rejections, learning about all, all this, all this thing that's called this thing called entrepreneurship. And it took us a while to figure it out, but, you know, eventually we got our first client and then our second client, and then we went after bigger clients, and things worked out after pretty, pretty stressful, painful 2 years. Those, those— but, you know, we learned a lot. And, and, you know, without that commitment and the discipline and the partnership and a lot of people who helped us, you know, brought us warm leads, you know, in our network, without that, we wouldn't have been able to survive, but we did it. So, so going all in has its, its positive, its pros, um, but some of us are— they like to take less risk, and that's, that's okay. You can, you can transition, transition in entrepreneurship, but just be aware that it requires still a lot of commitment after hours, at night, after a long day at work. And if you have some family responsibilities, you You still have to dedicate some time for this new venture that you are dreaming of launching, and then maybe some hours on the weekend. So just be aware of these trade-offs. I think that's really the point here that I'm trying to convey is that you have to tally up your expenses, personal and business. You have to put a sales projection plan, and then this intersection point here, that is where you break even. And then assuming you've done your job properly, you can— Assuming you've been thorough in identifying your expenses and with this frugality mindset, you've reduced the expenses, and then assuming you were conservative in your sales planning, not some sort of pie-in-the-sky numbers, you significantly increase your chances of extending your runway and increasing your chances of success. Because time is really important and you're managing that time, that hourglass we talked about earlier. So that is on the runway and also on extending that runway. Those are the 2 points here I wanted to cover today. And keep in mind that as an entrepreneur, maybe this is a 3rd mindset principle that I should have mentioned earlier, You have to be brutally honest with yourself, because most founders don't fail in the market. They fail based on— in the spreadsheet, in a way, because rent doesn't care if you are building a dream. Food doesn't wait for your first client, and then debt collection and the cushion that— the financial cushion that you had, that you have, don't pause because you're passionate. So I want to build this amazing company, I'm passionate about it, I, I want to change the world, I want to build a business with an amazing culture. All of that is great, but without proper planning, without being conservative in your planning, without being frugal, it'll be really, really hard to extend this runway and to take off, for your business to take off. Enough on runways. Now, in terms of this inflection point, you've managed to survive, you've managed to break even, you've managed maybe to hire a couple people, and now it's time to shift gears. You've stopped the bleeding, and now you've taken that first breath of stability, but you put all this time, all this effort, you jumped into entrepreneurship not to just be stable. Stability isn't the finish line. It is the launchpad. And operationally, there are a few tips here quickly. If you've reached that point, you can start, you want to grow and increase your revenue and increase your profitability. Right? So you can start maybe raising prices, you can get more recurring work, you can, you know, keep your expenses, you know, burned low and keep the pipeline warm and keep, you know, shipping and delivering and getting bigger clients. That's operationally all things I want you to do, and I have a ton of videos if you check out our channel. Again, if you're not subscribing, take a minute and subscribe. Hit the like button. I, I would appreciate it if you do that, especially if you're enjoying and benefiting from this content. And also share this video with others who would benefit from it. But I have a lot of videos on how to— how to— on pricing. We have the ultimate guide on, on pricing for consulting businesses and services, services businesses. We also— I also have videos on a whole, whole playlist on sales and growth. So check those out on the operational side. Operational side, I won't be covering this today, but the last thing I want to cover is that there will be an inflection point in most businesses where you want to grow beyond what you can do organically. So, so you need to get funding. And again, I'll dedicate all of, all of next, the next episode on, on I'll do a deep dive on all sources of funding and the pros and cons and specific tips on how to get that funding and the gotchas and the things, you know, I have scars from. But as you are thinking of growth, at one point, as I said, there's this inflection point where I need more money into the business. I've seen the light at the end of the tunnel. I've made some sales. I just now need to really put in systems. I need to hire, whatever the case might be. You need some money that the business cannot support organically. So you have options. These are the most common options. Do you self-fund? You get— tap into other savings, or maybe you sell some asset that you have. Do you borrow, or do you bring in investors or partners? So these, these are ways to ingest money into the business, get that capital in so that you can grow to the next level. And the idea here is I want you to be aware of the pros and cons because a lot of people jump into borrowing or jump into bringing in an investor or they tap into their savings And each of these options has its own pros and cons. That's what I want to cover today, but I want you to make sure that before you make a decision on getting more money in the business, I want you to have a full understanding of the pros and cons. And again, don't make these decisions lightly. They have serious long-term implications on the business. So I'll cover a couple of pros and cons for each of these scenarios, and then if you have a question about funding, if you have a question about, you know, about to bring in an investor, they're asking for 70%, I want to give them 20%, what's going on? Let me know. Leave me a comment or send me an email at feras@startupwithferas.com. I'll be, I'll be more than happy to answer. And for those of you who are live, again, feel free to leave us a comment. I'll answer it in this session. So 3 options, as I said: self-funding, borrowing, or bringing in an investor or a partner. There are other, there are other options— grants and other things— but these, there's, these are not as common. So for self-funding, the pros are is that you have full control. You keep 100% ownership and 100% control on decision-making. You have that power. And in a way, when you're putting in more of your money, more of your capital, your assets into the business, I think it creates more discipline about spending. You're not spending someone else's money. So it forces you to focus on profitability and careful spending. So these are the pros for self-funding. Now the cons are that you'll have limited access or limited resources. Again, unless maybe you've inherited some money or you have a lot of savings or you did well in Bitcoin, in crypto, or whatever the case might be. If you have some, you know, $1 million sitting aside and you want to spend half of it on a business, that's your prerogative. For the rest of us, If you're self-funding, at the end of the day, you'll have more limited resources, and then growth may be slower without external capital. And the other con here is that there's a higher personal risk. Your savings and financial security, um, could be on the line. And, and if you have— and I always tell founders this— if you're tapping into your personal resources, make sure Make absolute cert— be absolutely certain that every person who's impacted by decision is fully on board. Don't put the house, you know, on the line and your spouse, your partner is not on board. It's really important. You, you already have a lot to deal with. At work, you want to have some peace of mind at home. And if you start to tap into resources, and I, you know, I won't go into a lot of details on this episode, but I tapped into my personal resources and I kept— before I kept, I ran those decisions by my wife and explained to her what I'm about to do and the potential, and I kept her updated on progress. And did not at any point, uh, got to a point where at any point risk everything, everything we had. I did tap into our 401 plan and I depleted it, but that was at a point where we were seeing a whole lot of potential and there was a huge opportunity that I did not want to miss. And all that paid off, and we were very responsible financially as a family and also as a business. So, so, so, so just make sure that you can deal with that risk, and then people who are impacted by that decision are also on board with your decision. So that's on self-funding. 2 more, and then we wrap up the episode today. Uh, borrowing— the pros and cons of borrowing loan and credit. Again, the pros are quick, quick and easy access to cash, especially if you have a good personal, you know, financial credit. And then if you have, if you have access to maybe a line of credit, or you can get business loan from, from the SBA or others, you retain ownership. You have to pay the money back with interest, but you retain ownership. So you don't give up any equity. And also, you still, you are still the king of the castle. You, you make the decision, decisions, and And you have all the power to do so. And then you also, when you borrow, in most cases, the repayment is predictable. So you know that you have a fixed amount you have to pay on this specific schedule. So that is— that can help you in financial planning. Now, the cons of borrowing is that debt pressure. Payments must be made regardless of the business the performance of the business. And then I've seen this, I've seen horror stories, you know, that this risk of over-leverage— if you are borrowing and then you borrow more and you borrow more, that could hurt your credit, or even your personal assets might be on the line if things go south. So keep— be mindful of these decisions, both on on, on borrowing, the pros of, of quick access to, to, to capital, and then you retain, maintain ownership. And then on, on the con side, there's a huge risk if you are overleveraging, if you know you buy, you borrow more than you can, you can pay, pay back. The 3rd point here, and the last point for today's episode, is on bringing I was about to sneeze, sorry about that. On bringing in— sorry, I did end up sneezing. I think I muted before I sneezed, so I spared you that sound. So on, on the third point here is bringing in partners or investors. So, so the good thing is that you get more capital right away. You don't have to pay interest and paid back, this capital can fund your growth quickly and you can go after bigger opportunities. Also, you typically, if you have maybe a silent partner, maybe board member, you bring in an investor, you get also expertise. They have money because they've They've done things hopefully well in their life, and then they can share with you their expertise. So you have more access to expertise, and you can have maybe access to their network, their connections, and also credibility that they have. So a lot, a lot of good things come when you bring in money from an investor or maybe a business partner. Of course, there are cons. As you give up some of that equity, as you get that capital in from investors or a business partner, you lose control of decision-making and you have to share now. And also, depending on who owns what, you might be overruled on many things. So be aware of that. Make sure that you are comfortable with that loss of control. And second, there will be pressure for returns. Investors may want to push for growth faster than maybe what you're thinking or maybe what you have plans for because maybe you have a baby on the way. And for the second half of this year, you were going to go not as aggressively, not as fast, not work as hard because of your duties at home. Investors, they want a faster return. So that pressure for returns could actually be very, very difficult to deal with. So be aware And maybe negotiate specific terms when you are taking money in. So we'll talk about all the sources of funding next week. I have 6 categories, and I'll add to it a touch of— I have a martial arts-themed sources of funding episode in 2 weeks from now. So again, make sure you sign up, you subscribe to the channel, like the video, and share it with those who would benefit from it. And to conclude here, 3 things we covered is this mindset of frugality, the mindset principles of frugality and being conservative in your financial projections. 2, build your runway, personal and business expenses, and then your sales planning, and revisit that runway periodically. And then when it comes to funding, don't rush into getting funding from others borrow money, assess the pros and cons of these decisions. So if you want to get more tips on starting a business, on growing a business, join my Black Belt Startup weekly newsletter. You can go to startupwithferz.com and sign up there. I share practical tips, strategies, insights, lessons from the trenches. I share questions and answers, you know, questions I get from entrepreneurs and my answers to their questions, and really strategies to help you grow your business. And if you have any question, any question on that, that you're— or a challenge that you're, you're faced with on, on your journey to entrepreneurship, to, to, to financial independence, um, on, on, on this vision that you have to, to grow and build and grow and scale an amazing business, don't hesitate to reach out. I'm here for you, and we will see you next time. I do have— oh, I have a couple of comments. Sorry, I did not see that. Uh, Miguel, thank you so much for your comment. I'm sorry, I just saw that. I didn't see it earlier. Uh, Miguel says, thank you so much for doing these sessions and all your videos, Feras. Miguel, you are most welcome. If you have questions, Miguel, with this nice comment, I'm happy to answer it in detail. So feel free to reach out at feras@startupwithferas.com if you have a specific question, but I appreciate you attending and your comment. Alrighty, that's it for today. See you all next time. Bye.