How to Build a War Chest – While You Are At War

They don’t make recruitment posters about it, but I would argue that its logistical capabilities are one reason the US Military is the strongest in the world. A tank can’t go very far without gas and the most hardcore soldiers can’t continue to advance without ammo or food. If you think about it, what makes the military’s logistical capability impressive is that it does its best work in a time of chaos, danger, and unknowns.

Just like entrepreneurs who have done phenomenal work in the last few months – a time of chaos, danger and unknowns. Make no mistake, we are still at war for our businesses and entrepreneurs need to have a warrior mindset if they are going to survive. One of the greatest advantages that some entrepreneurs had was a war chest of cash that is providing stability and fuel for their business. However, after months of reduced revenue, some war chest may be depleted (or exhausted); some entrepreneurs never had a war chest and have survived on grit, ingenuity, and scrappiness. Both types of entrepreneurs need to replenish their war chest. So how do you grow a war chest when you are at war?

1. Attention to details: dictate and control where every single penny is spent in your business. This may mean getting to know your financial reporting system more intimately than you ever wanted – but if you mind the pennies, the dollars will take care of themselves.

2. Develop a plan: extra cash doesn’t fall out of the sky. If you want to build your war chest, then you need to have a plan to divert cash into it. There are many tactics to do this, Profit First being my personal favorite, but a plan is critical. Another powerful tool is a 13-week cash forecast. This not only helps you forecast when (and how much) cash you are going to need, but it helps you determine exactly how much (and when) you will be able to put back into your war chest.

3. Be prepared for a counter-attack: Every entrepreneur knows that when you least expect it and are least prepared – something bad will happen. A piece of equipment breaks, a key supplier runs out of inventory, shipping companies double their rates. The reality is that you don’t know what is coming for you and therefore you have to be creative, flexible, ruthless, and prepared for whatever is going to happen.

4. Protect your war chest: Separate your war chest from your operating account. Put it in another account, or even another bank, to reduce temptation and fraud risk.

5. Lean on your support system: One of the best examples of building a war chest during war was the United States during World War II. We are all familiar with the sense of patriotism, sacrifice and support that the nation had supporting the “boys” while they were overseas. It was the support, ingenuity, and discipline of these supporters that allowed the US to go from a relatively small military to the dominate military on the globe. Entrepreneurs need to do the same thing. Every entrepreneur has a Fab 5, or 5 people they surround themselves with that push them towards success. These people are not (or they shouldn’t be) selected because they are good golfers or throw amazing parties. No, they are selected because they understand what you are trying to accomplish and then bring insight, creativity, experience, and connections to the table to support you. 

I understand that this may seem like an impossible task, but this is the life that you have chosen. Hard is what you do every single day. If you would have heard last year, what the last 3 months were like – you may have said that it was impossible to survive; but here you are. The strength, ingenuity, creativity, grit and determination that entrepreneurs have demonstrated the last few months has been inspiring. I know that this is hard, but hard is what you do every single day.

Being an entrepreneur is one of the most difficult and demanding things you can do. The good news is that entrepreneurship today is a team sport. Hit the connect button on LinkedIn or Facebook NOW and together we will work towards hitting your 10-year target. Along the way we will increase your profit, strengthen your leadership skills and transform your banking relationship into a strategic partnership. This will lead to confidence in your path, freedom to dream up bigger targets and a business that is enjoyable to own. When we connect, tell me how you forecast your cash over the next 13 weeks. Is it in your head, on an excel sheet, or something else?

Greg Martin is an entrepreneur’s insider to the banking industry and passionately believes that every person was uniquely designed for a higher purpose and calling. Greg guides entrepreneurs in defining and achieving their purpose and calling. His deepest passion is living life with his wife and their wonderful son.