In both poker and entrepreneurship, managing money effectively is crucial for staying in the game. As a competitive poker player, I’ve learned the importance of building guardrails for using, allocating, and saving my bankroll. These principles are directly applicable to entrepreneurs, who must carefully manage their finances, even when backed by investors.
Money is more than just a tool for buying goods and services; it’s also a unit for measuring value and success. Understanding money’s multiple roles equips you to make smarter choices, whether in poker or business.
Allocating and Saving Your Bankroll
Just as professionals in poker recommend maintaining a certain amount of bankroll to play at specific stakes, entrepreneurs need to allocate and save funds to ensure they can sustain operations and invest in growth opportunities. Here are my recommendations for treating your business money like a professional poker player:
- Plan Your Spending: Create a detailed budget that outlines expected expenses and revenues. This helps prevent overspending and ensures funds are available for critical activities.
- Monitor Cash Flow: Keep a close eye on your cash flow to ensure you have enough liquidity to cover unexpected expenses and opportunities.
- Maintain Financial Reserves: Keep a reserve of funds to cover operational costs and emergencies. This provides a safety net and helps maintain stability.
- Adjust Spending Based on Funds: Be willing to scale down operations or delay expenditures if your financial reserves are low. Flexibility in financial planning is crucial for long-term success.
Avoiding the Perfection Trap
In poker, waiting for the perfect hand can be a losing strategy. The same applies to entrepreneurship. Focus on making good decisions with the resources available rather than waiting for perfect conditions.
Take calculated risks that can drive growth and generate returns. The key is to keep moving forward, learning from each decision, and iterating as you go. Use feedback and data to refine your business model and product offerings—just as a poker player learns from every hand, win or lose.
Investing for the Long Term
Investing in poker and business requires a long-term perspective. Diversification and a commitment to growth are essential for building substantial wealth and mitigating risks.
Think about spreading your investments across different assets to reduce risk and increase potential returns. This could mean investing in new markets, products, or technologies. But no matter where you put your resources, the focus should always be on sustainable growth rather than chasing quick wins.
Financial Literacy
Understanding the basics of financial management is crucial for both poker players and entrepreneurs. Financial literacy empowers you to make informed decisions and navigate financial challenges effectively.
Keep improving your financial knowledge. Concepts like cash flow management, budgeting, and investing might seem tedious, but they can make or break your business. And don’t hesitate to seek advice from financial experts—sometimes, an outside perspective can provide the insights you need to optimize your strategies.
Wrapping Up
I have way too many stories about both entrepreneurs and poker players going broke which takes them out of the game completely. And if you’re out of the game, you can’t win!! No matter how good of a product or service you have; No matter how good of a poker player you think you may be, money is the only way to stay in the game.
Managing money like a pro poker player involves careful planning, strategic allocation, and a focus on long-term growth. By applying these principles, entrepreneurs can build a solid financial foundation that supports sustainable business success. Remember, effective money management is key to staying in the game and achieving your entrepreneurial goals.
If you’re an entrepreneur looking to improve your financial management skills and drive business success, Velasco Consulting is here to help. Contact me at jason.velasco@velascoconsulting.co or connect with me on LinkedIn. Let’s develop a winning financial strategy together.
About the Author:
Jason Velasco is the founder of Velasco Consulting where he helps entrepreneurs and professionals grow their businesses through strategic coaching, product development, and advisory services. He is also the founder of Balanced Poker, a platform dedicated to helping people integrate poker into a balanced lifestyle. Additionally, I serve on advisory boards for innovative startups, including Colabr8, a SaaS all-in-one business collaboration solution.
