Several people have brought their concerns to me about struggling with too little time or too little money. How does a business leader address a balance or make a trade off?

I received a question from a reader who works ten plus hours per day, but fails to make money. This is a common dilemma.  He wanted advice about how to turn this situation around. 

The Prophet Haggai wrote, “You have planted much, but have harvested little. You eat, but never have enough. You drink, but never have your fill. You put on clothes, but are not warm. You earn wages, only to put them in a purse with holes in it." (Haggai 1:6, NIV)

Often I advocate that starting a side business is better then quitting your day job to launch a full time business. You can read my earlier posting on starting a side business:  http://bit.ly/VDSf3E .

The Lord makes a plan for each of us. The Lord said, "I know the plans that I have for you... plans for welfare and not for calamity to give you a future and a hope" (Jeremiah 29:11 NASB).

Every business faces some risk of merchandise returns or warranty work. We need to anticipate and plan for these. 

I advise contractors to place some portion of income into a reserve account to pay for future warranty costs. Past warranty work experience provides a good guide. Larger homebuilders understand that a part of every sale needs to be set aside for this. Likewise, even small contractors should place funds aside.

Some smaller contractors face cash flow problems. When they bid jobs they tend to bid tight, not always thinking through every aspect of the job.  Jobs cost involve more than time and materials. They also involve the future cost of fixing problems. If your find out that 3% of each job is spent in servicing warranty work, then; when you are paid $9,000 for a job, place $270 into an account to service warranties.

When you do this, you will have funds available to over these costs and won’t need to take money from current work.