Borrowing Money vs. Creating Capital
The financial choices you make early on can set the tone for long-term success. One of the most important decisions is whether to borrow money or build equity through sustainable practices. Here’s why we believe that you shouldn’t borrow money and should instead grow your business at the speed of cash. The only exception? Real estate—if absolutely necessary. When you borrow money, you’re no longer fully in control of your business. You're working to pay off lenders, which means your focus shifts from building your brand to meeting someone else’s demands. Subconsciously (and maybe even consciously), this changes the way you run things. You're no longer building for yourself and your clients—you’re building to make enough money to pay back what you borrowed.
Think about it. Have you ever had someone ask you for money? How did that make you feel? Probably awkward, anxious, or even a bit put off. Then, when they tell you what they need the money for—whether it’s paying a medical bill or starting a business—how did you feel? Most people would say, "If you believe in your idea so much, why not use your own money?" That’s exactly the point. If you believe in your business, invest your own money in it. Don’t strain or risk relationships just to borrow from someone else. Banks make money by lending, and they don’t have the same emotional connection that you or your loved ones do. Borrowing money within personal relationships is where the real damage happens—especially when things don’t work out and you have no way to repay.
Sometimes, hearing "no" isn’t a challenge you need to push through. It’s a protection mechanism. It’s about timing, and timing is everything in business. When you understand the importance of timing, you become more aware of how vulnerable you can be in all areas of your life, especially in finances. Instead of rushing into debt or borrowing money, take the time to understand your financial situation, and learn how to steward your money wisely. This is a lesson that applies not only to your business but also to your overall financial well-being.
The key to growing your business without borrowing money? Creating capital. There are a few ways to do this, but let’s focus on two main strategies: reinvesting business earnings and saving money. Reinvesting your business earnings is a surefire way to grow your business without taking on debt. After covering your business expenses, set aside a portion of your profits to fund future growth. This could be for marketing, new equipment, or hiring staff. It won’t happen overnight, but with intentional effort, you’ll be able to build a strong foundation. The important part is being strategic with how you use those funds to further grow your business. Saving money is another powerful way to fund your business without borrowing. It might take time to save up enough capital for a big project, but this gives you the freedom to make decisions based on opportunity, not necessity. Plus, when you save, you become more intentional about how you spend your money, which leads to smarter, more sustainable decisions.
The biggest challenge with reinvesting and saving is that it takes time and patience. In a world of instant gratification, it’s easy to get caught up in the pressure to grow quickly. What’s true about a turtle and a rabbit? They are both still moving. Through saving and reinvesting, you learn to appreciate your business more, and you avoid making hasty, irrational decisions with money. There is one exception to the “don’t borrow” rule: real estate. If you’re looking to purchase property for your business, borrowing money might be necessary. Real estate can be a solid investment for business growth, but it should still be approached with caution. If you do borrow, make sure it’s part of a long-term, well-thought-out plan. Starting and growing a business without borrowing money is challenging, but it’s absolutely possible. By focusing on reinvesting and saving, you can grow your business at your own pace, without the pressure of paying off debt. It takes patience, discipline, and a willingness to play the long game. In the end, it’s a great way to ensure success.