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How to avoid going broke soon after starting a business

Nick Williams, Star Tribune on

Published in Business News

Yasameen Sajady, CEO of St. Paul, Minnesota-based Maazah, is learning that day by day, it takes awhile for profits to roll in.

The maker of Afghani-style chutneys, aioli and lentil dips is expanding into Target, Whole Foods and Costco stores across the country this year.

While a major opportunity, Maazah has to finance the increase in production before it can sell it to the new retailers and keep its dips rolling to the over 100 Kroger and Central Market locations, plus Kowalski's Markets, it already supplies.

For small companies, growth opportunities like Maazah's can put owners in a position where they are reluctant to pay themselves.

"When you're dealing with these larger retailers, the purchase orders are so much bigger, you have to put so much money up front to buy supplies and bottles and the cilantro and ingredients, right? So you don't really see the profits after just 30 days," Sajady said. "It takes like 60, 90 days to kind of get above the line."

Sajady is hoping Maazah reaches $2 million in revenue this year. It would help her and co-founder and sister Sheilla Sajady fully pay themselves. Right now, Yasameen Sajady pays herself enough to cover day care.

 

"The dream is to be able to have a full-time job with a full salary and get the company to a place where you can feel comfortable to [pay yourself]," Yasameen Sajady said. "But that hasn't happened yet. This year is the year that will happen, if not next year."

So how as an entrepreneur can you pay yourself when the business comes first? These business owners and advisers laid out a game plan.

Be disciplined about finances

One of the most important responsibilities for a business owner is budgeting.

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