A finance warning by my accountant when starting a business

On one of my first meetings with my accountant, he told me that most startups and freelancers don’t fail with their businesses because their products, service, or ideas are wrong or bad. They fail because of financial mismanagement. Many find it difficult to internalize that the money in their account is not 100% theirs, but part of it belongs to the tax office. In Germany, you are on the safe side if you set aside 1/3 of your income (excluding sales tax) for the tax office and health insurance.

Wouldn’t it be sad if we had to end our long-awaited dream of launching our restaurant, product, or service just because we spent money on a vacation, a car, or a watch? Money that didn’t belong to us in the first place? Wouldn’t that be unfair, irresponsible, and negligent to ourselves?

And even worse, wouldn’t we be depriving our fellow human beings of the result of our passion? An invention, a film, a product, or a service that might have simplified or beautified their lives?

Especially at the beginning of our project, until we can assess the financial situation more accurately, humility seems to be the virtue with which everything stands and falls.