What’s the fastest way to go $25,000 into debt? Buy a failing business with no personal savings.
That’s exactly where I found myself in January 2019, nervously looking to find cash to prevent my business from collapsing before it even started.
I had just signed the deal of my life and was with my head in the clouds.
But within days, reality crashed down on me. By January 2nd, my new business was already on the verge of disaster—$25,000 in bills due, no revenue for at least a month, and nothing in my bank account.
I didn’t think this through very well. My head was still in the clouds when I started, but I didn’t take into account all the starting costs and monthly costs that you pay at the beginning of the month.
Panic crept in, but if there’s one thing I’ve learned about myself, it’s that pressure sharpens my instincts. The more stressed I get, the more my business intuition kicks in.
I had two choices: find a way out or watch my business collapse before it even started.
How the hell was I going to fix this?
I had no savings. No cash flow. And no revenue until February.
But my bills? They were due in January. I had to cover a mountain of costs with money I didn’t have. This was a classic beginner mistake. Looking back, I don’t know why I didn’t tell anyone.
Maybe I was afraid of disappointing my family and friends.
Maybe I didn’t want to admit I was struggling.
Either way, I couldn’t fail. I had to fix this.
The Costs Were:
- Rental security deposit (3 months) – $9,300
- Employee salary (end of January) – $3,500
- Accountant costs – $500
- Car down payment for the new lease – $3,000
- Utilities & insurance – $1,500
- New website – $2,500
- Marketing costs – $1,500
- Other costs (maintenance, business administration programs, bank loan setup fees, new insurance policies) – $2,500
Total Expenses: $24,800
Immediately, I was almost $25K in debt.
I was able to have a negative balance of $25K in my bank account, but I would already have reached that limit by the end of January.
Here’s how I overcame this first problem with liquidity.
In business, you have to come up with solutions—because no one is going to help you with struggles like this.
Again, I contacted my landlord. At this point, I was a pain in the ass for him because I had already negotiated a lower monthly rental fee.I asked him if it would be possible to pay the deposit at the start of the second quarter, in April, but he wouldn’t budge.
“I want the rental deposit now because I have already been good towards you by lowering the rent. Welcome to the business world.”
Well, there we go, it’s January 2nd, and I’m already having problems.
After this conversation, I made a call to another entrepreneur who had a successful business and explained my problem. He came up with a solution that would cost me a bit more money in the long run, but would save me in the short run.
It was possible for me to let the bank pay the rental deposit, but they would charge me $180 monthly until I could pay them back. This arrangement is called a bank guarantee.
Afterwards, I called the bank, and my account manager started laughing.
“Welcome to the business world,” he said.
The bank was happy to help, and as of now, I would be paying a $180 monthly fee to the bank for covering the rental security deposit.
This was one problem solved, onto the next one.
I asked my friend if I could pay for the website over 12 months, and he agreed since I explained my financial struggles to him. He understood that I had just started out.
I also called the car company to see if I could delay the car lease by three months because I couldn’t afford the down payment. Again, I was totally honest about my situation, and the car salesman felt for me.
He made an agreement that I could use the car immediately and postpone the down payment by three months.
With these calls, I was able to postpone almost $15K in costs for January. The crisis was averted, and I could finally start focusing on growing my own business again.
While solving this problem, I learned three very important lessons that every entrepreneur should remember when facing challenges.
- Always factor in startup costs and early expenses when taking out a bank loan. When you buy a business for an X amount of dollars and don’t have any personal funds to fall back on, you must calculate your startup costs and the first months of expenses before you generate revenue and add them to your bank loan. This means you’ll be borrowing more upfront, but it prevents liquidity issues in the early months—which can be a killer for new business owners. Yes, this approach increases your total loan amount, meaning you’ll pay slightly more in interest and have a higher monthly repayment. But those payments are spread out over the entire loan term, making them manageable. The real danger isn’t the long-term debt—it’s running out of cash in the first months and seeing red numbers on your business bank account.
- I made mistakes. I admitted them. And I asked the people I owed money to if they could work with me. I had no leverage—no room to negotiate. But sometimes, the best move is simply to be honest and see what happens. If you don’t ask, the answer is always no.
- When you’re stuck, don’t try to figure everything out alone. Ask experienced entrepreneurs what they would do in your situation. After all, why do you think there are so many business consultants? Most business owners have been through tough times—maybe even the exact struggles you’re facing right now. And more often than not, they’ll have creative solutions you’d never think of. The best part? They’re usually more than willing to help.
“Before we start with 2019, let’s look at the numbers of 2018. The business generated €190K in revenue but only €25K in profit—a meager return. As I mentioned earlier, I managed to cut €50K in costs, which meant that even if revenue stayed the same, my profit would jump to €75K.
But I had bigger goals. I set my sights on €240K in revenue with a target profit of €90K. But wait—shouldn’t my profit be €125K if revenue increased by €50K while keeping expenses low?
Not exactly. The more your revenue grows, the more you have to reinvest in your business. And that’s exactly what happened.”
Earlier, I mentioned how I cut accounting costs from $1,000 to $300 per month. It felt like a win, until I realized I was terrible at managing my own business administration. I didn’t enjoy it, I procrastinated, and as a result, my bookkeeping fell behind. And when your numbers are delayed, so are your business decisions.
By April, I knew this wasn’t sustainable. I renegotiated with the accountant, increasing his fee to $700 per month so he could take over the business administration again. It meant an extra $5K per year in costs, but the trade-off? Peace of mind and real-time financial insight.
“The same thing happened with our marketing costs. They were working well, but the monthly spend increased from $300 to $800—an extra $6K per year.
Add a few more unexpected expenses, and suddenly, you’re spending way more than you expected.
“This is why watching costs is crucial. The previous owner let $50K in unnecessary expenses creep up simply because he never questioned them. I wasn’t going to make the same mistake.
Costs are necessary for growth—investing in marketing helps expand your business. But if you don’t track expenses carefully, they can quietly spiral out of control. You need to control your costs, or your costs will control you.”
So I made a rule: At the end of every year, I would review every expense in my business and decide whether to cut it or keep it. “No exceptions.”
Total Costs of the Business in 2019
🏠 Housing Costs
- Rent: $37.2K
- Utilities: $3K
- Total Housing Costs: $40.2K
📋 General Costs
- Telephone: $1.5K
- Office Supplies: $1.5K
- Licenses & Administration: $1.5K
- Subscriptions: $2K
- Insurances: $5K
- Car Costs: $6K
- Maintenance Contracts: $3K
- Accountant: $7.5K
- Total General Costs: $28K
📈 Investments
- Investments: $30K
- Total Investments: $30K
📢 Promotional Costs
- Marketing & Promotion: $10K
- Total Promotional Costs: $10K
👥 Labor Costs
- Employee Salary: $40K
- Total Labor Costs: $40K
💰 Finance Costs
- Loan Interest: $4K
- Loan Repayment: $17K (Lower because I started paying in april)
- Total Finance Costs: $21K
🔹 Total Overall Costs: $169.2K
Now that the cost side of business is clear, let’s get back to revenue and profit.
My goal was €240K in revenue and €90K in profit. The plan? €30K for my salary, €30K reinvested into the business, and €30K set aside as a cash reserve.
One of my first investments was something I had already mentioned: signage. Our practice was in an A-location, but poor visibility meant potential clients were walking past without realizing we existed.
So I made my first investment: $4,900 in new signage. And the impact was immediate.
Suddenly, we had walk-ins. People came in without appointments, asking to book one. Some even asked, “How long have you been here?” or “Is this a new practice? I never noticed it before!”—proof that our location had been hidden in plain sight.
We saw the effects online too. Website visits and Google Profile interactions increased, confirming that people were noticing the practice more. This small investment led to real growth.
Other investments I made included:
- renovating the venue by hiring a painter, which cost me $10K.
- The new website creation cost $2.5K.
- Some old equipment had to be replaced, which was another $10K.
- Smaller investments, like new computers and desks, which cost around $2.5K.
The venue looked much better, and clients appreciated the improvements.
I saw my revenue growing steadily every month, especially when I compared the months of 2019 to the same months in 2018—each month had a +20–30% increase in revenue.
Slower Summer Months & The Mistakes I Made
When summer came around, business slowed down.This was normal, July and August were vacation months, and many of our clients were out of town. We had plenty of empty spots in the schedule, and looking back, I realize I made a few mistakes.
Why You Need to Make Good Use of ‘’Empty Hours’’ in Your Business
During the slower months, I slacked off. I lost focus. Instead of using the downtime productively—working on my website, analyzing financials, networking with other business owners, or improving my administrative work—I wasted countless inefficient hours watching YouTube, partying, and scrolling through my phone.
This was one of my biggest weaknesses. I thrive under pressure—I need stress and urgency to stay sharp and productive. But when things got quiet, I lost my edge.
Then, September came—and suddenly, business picked up again. That’s when I realized I had wasted valuable time. The work I could have easily handled in the summer was now piling up. I found myself working 70 to 80 hours a week just to make up for lost time.
The Lesson? Always Be Working on Your Business During Business Hours.
Even when things seem slow and easy, use that time wisely. Get ahead, plan for the busy season, and never let a lack of urgency stop you from making progress.
Preparing for the Best Quarter of the Year
The last quarter—October, November, and December—was still ahead, and I knew it would be the most important one. I reviewed the revenue stats from 2017 and 2018. 2017 had been slightly better than 2018, but both years were underwhelming. My goal? Outperform the fourth quarter of 2018 by at least 30%.
The Final Stretch: Growth & Long Hours
The last quarter of 2019 was intense. I worked long hours, but the business was truly starting to grow. Clients were returning, and more younger, working professionals were finding their way to the practice outside of regular hours. The expanded opening times paid off, allowing me to capture more revenue during peak periods.
The agenda was still far from fully booked, but we had made major progress. In 2018, our schedule was only 50-60% full, but by the end of 2019, we had reached almost 70% capacity.
Did I Hit My 30% Revenue Growth Target?
On the last day of the year, after wrapping up all the work, I took one last look at the revenue numbers for the final quarter. I had been calculating projections in the weeks prior, and I was pretty confident that we had hit the 30% growth target.
Here’s how Q4 revenue compared to previous years
Revenues Q4
October 2017 – 18.500 November 2017 – 18.000 December 2017 – 17.800
October 2018 – 17.300 November 2017 – 16.600 December 2018 – 16.400
October 2019 – 22.250 November 2019 – 22.500 December 2019 – 22.400
“We did it!” A 33.4% revenue increase in the last quarter!
At the end of the year, we had a total revenue of 238.500 dollars close to the prediction of 240.000 dollars. I paid myself a salary of 30k, invested 30k in the business and kept 40k as a cash reserve.
This was one of the proudest moments of my life. All the hard work, late nights, and struggles of 2019 had finally paid off. I was over the moon!
I think you can all guess how my New Year’s Eve went, plenty of drinks, good friends, great music, and a well-earned celebration to close out a year that tested me in every way possible.
But this high lasted only for two months because in March, COVID-19 showed up on my doorstep. Want to read how that went? Take a look at part 3
7 Most Important Lessons I Learned in My First Year as a Business Owner
My first year as a business owner was a rollercoaster—financial struggles, long hours, and constant problem-solving. But every challenge taught me something valuable. Here are the 7 biggest lessons I learned:
- Cash Flow Can Make or Break You
Lesson: Profit means nothing if you don’t have cash in the bank.
- I nearly ran out of money in the first month because I didn’t account for delayed payments.
- Always plan ahead, keep a financial buffer, and secure flexible payment terms whenever possible.
2. Honesty & Humility Go a Long Way
Lesson: Being upfront about my struggles got me unexpected support.
- My landlord, suppliers, and even my bank helped me because I asked.
- Sometimes, admitting your mistakes and asking for help is the smartest move you can make.
3. Never Waste Your Slow Periods
Lesson: The time you waste during quiet months will come back to bite you.
- In the summer months, I lost focus, watching YouTube, partying, and procrastinating.
- When business picked up again, I was overwhelmed and working 70-80 hours a week to make up for lost time.
- Always use slow months to work on your business—financials, marketing, systems, and planning.
- Expanded Opening Hours = More Revenue
Lesson: If you’re not available when customers need you, you’re leaving money on the table.
- Extending hours to evenings and weekends brought in younger, working clients who wouldn’t have come otherwise.
- Adjusting to your customers’ schedules can significantly increase your revenue.
5. Cutting Costs Helps, But Don’t Be Cheap in the Wrong Places
Lesson: I saved money on an accountant, but it ended up costing me more in the long run.
- Some cuts (like renegotiating rent and switching car leases) helped my bottom line.
- But cutting important services (like accounting) led to more stress and inefficiencies.
- Be lean, but don’t sacrifice the things that actually make your business run smoothly.
6. Small Investments Can Have a Huge Impact
Lesson: Some small, smart investments give you an instant return.
- A €4,900 signage upgrade brought in walk-ins, new customers, and higher visibility.
- A €10K renovation made my practice more inviting, improving client retention.
- Even small things, like a professional website or better branding, can boost revenue.
- Set Clear Revenue Goals & Track Your Progress
Lesson: If you don’t track your progress, you’re flying blind.
- I set a goal to increase revenue by 30% in Q4—and that focus helped me make key decisions.
- I regularly compared numbers from 2017, 2018, and 2019 to measure progress.
- Every business owner should set targets, track financials, and adjust based on real data.
