Why it matters what you pay yourself as the business owner.
Business owners often don’t pay themselves at all, but just draw money out of the business account when they need it. At the end of the year, the accountant adds up all the “draws” and books it to something appropriate in the balance sheet to make the Tax Department happy and it’s all good. Sp why does it matter how much you pay yourself, why should you pay yourself at all and how much should you get paid?
Clearly, a big factor in how much profit your business makes and whether or not the business has the cash to pay it’s bills is how much money you draw out of the business at any one time. If your business turns over half a million dollars and you have 4 employees and an office and you pull out $200K yourself every year there may not be enough money left to pay for Cost of Sales, staff wages and overheads (or tax, for that matter), and if you pull out nothing at all, it might look like your business is enormously profitable. Your wages, drawings or dividends are a significant factor influencing the health of the company.
So wat’s wrong with letting your drawings depend on whether there’s enough money in the bank to pull some out?
If your business doesn’t make profit, it’s a hobby.
A healthy small business ought to make somewhere north of 5% net profit before tax, every year. I generally advise my clients to aim around 10% as a guideline. (10% of revenue… so for every $100 in sales, the business ends up with $10 of net profit). There is no golden rule about this number, but it’s a useful guideline in most cases.
Net profit is the money that’s left after all costs of the business have been paid, and you, the owner of the business are absolutely one of the business’ costs, a major one at that. And you rightly should be a cost to the business, just like the electricity and the rent and the mobile phone bills and the staff. Without you the business can’t function. You are the CEO and general manager, the head sales person, the chief cook as well as the bottle washer. In any other business, all those people would need to be paid and probably quite highly, and so should you. If you do not pay yourself a proper wage, you’re not professional and nor is your business.
Dribs and Drabs for the boss
I recently started working with a client in an architecture business. The client has 4 staff plus himself and he pays his staff and all his other costs, but he only gets paid in dribs and drabs when there’s money available. He showed me his P&L and proudly pointed to the net profit his business made last year. But when I asked him how much the business was paying him, it turned out that he just drew out some money every now and then and that his drawings didn’t show up in the P&L. In effect, if he were to pay himself as much as his lowest paid staff member, he would have made a loss last year. In other words:
My client wasn’t running a business at all, he was running a hobby.
My client has now implemented a weekly minimal wage for himself, run through the books as a wage, showing as a wage in the overheads and we’ve updated his business targets to be in line with the new reality. The business is not out of the woods yet, but there is a new air of professionality in the practice and my clients is learning to think like a business owner rather than a hobbyist.
How much then?
The second question therefore is: How much should I pay myself?
Again, it may seem that there is a certain arbitrariness to this question. But the answer is actually quite straightforward:
You should pay yourself as much as it would cost you to pay someone else to take over from you.
Assume you want to go on sabbatical for a year and bring in a CEO to run the business for you… Doing everything you do for the business now… What would that cost? $80K, $100K, $120K? Whatever the answer to that question is, that’s what you ought to pay yourself.
This may well be unachievable right now, (it is for my client… He can only manage about $60K right now), but it’s certainly something you should work towards over the next year or so. It will put the business on an entirely different footing and every time I introduce this discipline with my clients, the business starts to change completely… guaranteed.
Getting help, Business Life Coaching, external support
Building a Beautiful Business starts at home…
What does it take to build your own Beautiful Business and Life? What is Business-Life Coaching anyway? What are the Principles of Business-Life Coaching? How is Business-Life Coaching different from any other form of business support or guidance. And above all, why should that matter to you at all?
Business-Life Coaching… It’s about everything
When thinking about building a Beautiful Business, we tend to think about:
And possibly a bunch of others I’ve yet forgotten.
When did you last look in the mirror?
Which of those are the most important, do you think? Which of these matter more than any others?
They’re all important, no doubt, but the key factor in developing a Beautiful Business and Life isn’t in the list above. The aspect of business that “Rules them all”, in the words of Gandalf in The Lord of The Rings, is looking at you in the mirror… That’s right, You… Little Old You.
More money, more time, more balance, more life…
The Principles of Business-Life Coaching can be expressed in this statement:
If you want something you’ve never had before,
First, you’ve got to be someone you’ve never been before.
As you’re reading this page, I imagine you want the future of your business and your life to be different than it is now. You want to grow, make more money, find more time, have greater work-life-balance, retire (with a bunch of cash), make the world a better place, be proud of the stuff your business produces, and make a difference.
And that’s great, I love supporting people that have exciting dreams and want to make a splash. It’s what I get out of bed for every day.
Are you the kind of person?
But none of us can have any of those dreams, unless we’re prepared to become the kind of person who builds the kind of business that makes the kind of profit you dream of, or that makes the kind of difference we dream of, or that is sold for the kind of dollars we dream of. Would you like to Discover what’s possible for you and your business?
Hence my focus on Business and Life Coaching. The “hard” skills as well as the “soft” skills of developing your business. I will teach you about the latest business management thinking, and we’ll design new systems customised to your business. We’ll create business and marketing plans that work and implement them. We’ll get clear about the Purpose of your business, you’ll implement controls and get good at numbers so that you have your fingers on the Pulse every day. We’ll get your staff firing on all cylinders. We may develop new products and come up with innovative solutions to bust past the hurdles that have held your business back.
You’ve Got All Da Moves…
We’ll do all that and much more besides, but at the same time we’ll be working on what it takes to be a great business owner who builds a Beautiful Business and Life. We’ll work on leadership skills, self management skills, developing your vision, prioritising what’s most important in your life, goal setting, strategic thinking, planning, communication, people management, how to get out of crisis management, and above all we’ll work on how to look after yourself.
Building a Beautiful Business and Life, is a journey out of your comfort zone. It means you have to be prepared to look at yourself, acknowledge that you’re the bottleneck that holds your business back and say:
This is the eighth post in the series of The Ten Priorities: Laying the Foundations for a Great Business and Life. The eighth Priority is about Managing your People. The introduction to this series on The Ten Priorities is here.
Great businesses employ great people that deliver great work.
Business owners who want to build great businesses must get good at managing people. There is no way around that.
But for many business owners, people are a source of great stress and anxiety. They spend their days hoping things will go ok, and practice the ancient art of:
Management by keeping your fingers crossed
And that’s because they Abdicate, instead of Delegate to their employees.
Abdicating is giving someone a job and hoping they’ll somehow get it done right.
Most people feel good when they have an opportunity to do good work. Human beings (and employees are in fact human beings, I promise you) get a lot of satisfaction from doing good work, but the problem is, they often don’t know what constitutes good work. They’ve not been given clear outcomes, and they’re given conflicting priorities and feedback. And so, they flounder, they make it up themselves, they disengage, and the job does not get done right.
Delegating, on the other hand, is about discussing the job with the employee; explaining to them what the required outcomes of the job are; making it clear what good work looks like; asking for input and buy-in on the job; asking what the person needs to be able to deliver the required outcomes; agreeing on time frames and check-in points, and finally, agreeing on reporting and KPI’s for the work. (More about engaging your staff here)
When you learn how to delegate while keeping your fingers on the pulse as opposed to keeping them crossed, you will start to build a great business… I promise you.
This is the sixth post in the series of The Ten Priorities: Laying the Foundations for a Great Business and Life. The sixth Priority is about not doing it all on your own. The introduction to this series on The Ten Priorities is here.
Do you have a little voice on your shoulder, that whispers in your ear?
Most of us do.
And a lot of what the little voice whispers in our ears is not very nice, is it?
The basic message from the little voice, is that we suck.
We’re not good enough. We’re not cutting it as parents, as lovers, as friends and especially we’re not cutting it as business owners.
And for most business owners that little voice goes from whispering to yelling, the moment we even consider committing the heinous crime of asking for help.
Asking for support in business, is almost guaranteed to get the little voice on our shoulder extremely excited.
Deep down we all believe that being a great business owner, an inspiration to our staff and customers alike, means we must do it all ourselves. We seem to think that business success is only meaningful if we’ve done it all alone.
Hogwash… Utter nonsense.
It takes a village to build a great business. One of my most successful and oldest clients has built a whole team of specialist advisers, coaches and mentors around him. (more about getting external help here)
I guarantee that no matter which inspiring business role model you interview, they’ll all tell you their success is due partly to the support of one or more mentors, coaches or advisers.
No-one can do it all alone.
You need other people to:
Hold you accountable to your plans and goals.
Brainstorm with you and be a sounding board.
Support you when you stumble.
Give you honest opinions, advice and feedback.
There are many ways to get outside support. You can join a business support group, get a business coach, or mentor, start your own advisory board, or all of the above. But whatever you do, dropkick your little voice…Forget trying to do it all on your own… You can’t … I promise you.
More about the various forms of business support, guidance and advice that are available to small business owners here
The secrets to getting Un-Stuck, take control and to make Business Fun again
Many small business owners feel frustrated, stuck and overwhelmed in business on a daily basis. They operate in crisis management mode, running around from this urgent problem to that emergency all day long, extinguishing brush fires along the way.
In the first years of business, you accept that all this running around and stress is par for the course, but a few years on, nothing much has changed, you’re still running around fixing everybody else’s problems and the stuff you really want to work on, for the long term development of your business, just keeps getting pushed back and back forever.
Fun in business Overwhelm and Stuck in business
Do you feel stuck as well?
Most business owners have experienced that sense of frustration and the secret to building a Beautiful Business and Life, is to find your way around this state of overwhelm and take control of your business. The first step to getting unstuck in business is to start thinking differently about your business than you have until now.
Did you know that all that matters in business is Fun?
Fun is the opposite of Overwhelm and being Stuck. When you’re having Fun, you’re not Overwhelmed and when you’re in Overwhelm, you’re not in control and you’re having Fun. The two are mutually exclusive.
And when your business is Fun, it means everything is working:
It means you’re making money
It means your staff are engaged and doing great work
It means your customers love you
It means you’re proud of the product or service you deliver
It means you’ve created a level of balance in your life that works towards your wellbeing.
So Fun in Business ought to be a key focus to help you move from crisis management and overwhelm to taking control and building your own Beautiful Business and Life.
I’ve also written a book about Fun in Business, The Ten Truths for Making Business Fun. You can download it for free as Ebook or Audiobook here.
Fun is serious business
It may seem strange to make Fun the key focus in the development of your business. We’re generally told that the function of business, the purpose of business, is to make money. Hence we should make “maximising shareholder value”, making profit and generating cash in other words, our key focus. But in many years in and around business, I’ve come to believe that to really build Great Businesses that Stand the Test of Time, we need to think differently about business than we’ve been taught for the past 200 years.
I like to quote John Mackey, the founder and CEO of Wholefoods markets in the USA. The company was recently bought by Amazon for US$14 Billion. Wholefoods made profit and paid dividends to its shareholders every year for its entire existence. In other words, John Mackey has established credentials where it concerns making money in business. Yet John Mackey wrote a book called “Conscious Capitalism” (more about the book here, as well as here), and in it he says this:
“Thinking that the Purpose of business is to make money, is as silly as thinking that the purpose of human beings is to eat food. We need to eat food, eating food makes us feel good, but we eat food so that we can do what we need to do on this earth. It is the same with business and profit. Business needs to make profit, and plenty of it, but it needs to do so, in order to fulfil its purpose, the reason it exists”
So, yes, business must make money. The business must generate profit and cash flow, and it must work hard to maximise its return to shareholders. Undoubtedly… As I say in elsewhere in this website: “A business that doesn’t make profit, is a hobby.”
If your focus is making money, there will never be enough. This year you might focus on making $100,000 profit, but as soon as you’ve made $100,000, you’ll want to make $200,000, and then $500,000 and so on, there’s always more money to be chased.
If your focus is making money, why pick $100K or $500K, why not $531,629,23? or $496,187.42. Any number you pick will be arbitrary, and hence meaningless.
If your focus is making money, your brain won’t cooperate. To your subconscious brain, there is no difference between $100K or $150K. Your subconscious can not think in concrete concepts, such as numbers, it can only get engaged by emotional concepts.
If your focus is making money, you’ll wonder what it’s all been about when you’re on your death bed. Nobody has ever lain on their death bed and thought: “I wish I’d made more money”. I guarantee you that much.
How do you get beyond money? Take these four steps;
So, if you want to get unstuck, stop being a crisis manager and move out of overwhelm in your business, you must start thinking beyond making money.
These are the big 4 steps to take to move out of overwhelm and into having Fun in Business:
Ask yourself the Big Question of Small Business: Why does your business exist, and why would anybody care about that? (The Purpose question, more about the Purpose of Business here)
Learn to ask yourself every week: How much Fun in Business did we have last week, and how can we make next week a little bit more Fun? (I’ve written about measuring Fun in Business in my book and also here)
Develop a discipline around your time. Know that your time is the most valuable asset of your business. As a responsible business owner, it is your job to ensure that you look after your most important asset and get the best return you can from your assets. This means you must discipline yourself not to waste your time on things that are actually not all that important. (Read more about business owners and time management here)
People: Get the right people on the bus, in the right seats, facing the right direction, and the wrong people off the bus. There is no greater cause of stress, overwhelm and frustration than people. (More about managing people here and here)
Further reading about overwhelm, taking control and Fun in business:
I believe personal development is integral to developing your business. The two always go hand in hand. It’s the reason I refer to myself as a Business – Life Coach, rather than a business coach. It all boils down to one word: Leadership.
Most business owners, in the deepest dark reaches of their mind, are afraid they’re not quite cutting it as entrepreneurs. Oftentimes, as business owners, we start our business on the back of a profession, a trade, or a skill we have learnt (plumber, architect, accountant, software developer, designer, mechanic, chef, retail manager) and we feel confident in that particular skill. Starting a new business is an enormous buzz. But once we start a business based on that profession, we suddenly realise it takes a lot more than being a great plumber to build a great plumbing business.
Time to think, doing nothing
Where’s the toilet paper?
Few business owners have studied to be a business owner, and even those who have attained an MBA or similar qualification, find they’re not prepared for the realities of life as a small business owner. Suddenly everything is down to you, the big decisions about whether or not to bid for that contract, or hire that expensive employee, or sign the lease for the new office, as well as making sure the toilets are stocked with toilet paper and that there’s ink for the printer. To top it off, your people look to you to have Vision, to have the answers and to be the leader.
Three pieces of good news about your leadership
It can be a frightening place to stand in the middle off, but there are three pieces of good news:
You got this far and you’re still standing, so you must be doing something right.
Your people actually want you to be the leader and they’re ready to forgive you just about any stuff up you’re going to make along the way.
Leadership is something you can learn, practice and get better at.
What is leadership then?
Leadership starts with this statement:
Your business is what it is today, because of WHO you ARE today.
That may seem obvious. But what may not be so obvious is what follows.
Because what it means is this:
If you want SOMETHING you’ve never had before,
First, you’ve got to BECOME SOMEONE you’ve never been before.
Systems and knowledge are never enough
Many business coaching companies sell a “system” that will supposedly deliver a business that generates a million dollars of profit every year. Those systems are often well thought through, well presented and well worth looking into, but they rarely work, at least not by themselves. The reason they don’t work is that Change, business Change or personal Change, is never about systems and knowledge. Just like we all know the system for losing weight (eat less, and exercise more), most of us business owners already know most of what we need to know to Change our businesses.
And just like losing weight means becoming the kind of person who commits to a regimen of eating less and exercising more, changing our businesses means having to become the kind of person who commits to a regimen of developing as people, as managers, as communicators, as coaches… As leaders in other words.
We have to become leaders, the kind of people, who do what needs to be done, to build the kind of businesses that make a million dollars net profit (or substitute whatever figure is relevant for you).
Becoming that kind of business owner, that kind of leader, who builds that kind of business, doesn’t happen overnight. You can’t flick a switch and suddenly become that person. Change is a Journey, an adventure, a process of growth. It takes time and commitment, and nobody can know, on forehand, what your adventure is going to look like or what the outcome of your Journey is going to be. Every business owner has his or her own Journey to make, and every Journey is different.
The one thing we can be sure of is this:
Change won’t happen unless you get on the Journey.
Getting on the Journey means stepping out of your comfort-zone and then staying there. You have to push off from the shore, get out onto the ocean, set a course for the horizon and not come back, because Change never happens in the safety of the harbour.
And you know this already. Take a look back over your life to date: It’s all been a Journey. Ten years ago you couldn’t have done what you do today.
But sometimes we just get stuck for a while in the safety of the harbour. Stepping out of your comfort-zone, leaving the harbour, is hard. The day-to-day of scrubbing the decks, repairing the sails and polishing the brass work gets in the way. And before you know it, the day-to-day is all there is.
The two questions you need to answer
That leads to two questions:
How do you know you’re ready to get on the Journey?
How do you get on that Journey?
The first question is the easiest as well as the hardest to answer:
You’re ready when you feel you’re ready.
More about the connection between personal and Business Change:
Do take a few minutes to watch this gorgeous TED talk by David Whyte, on past and future and journeys of Change.
There’s nothing wrong with being in the harbour for a while. We need to make sure the ship is seaworthy and safe, we need to make sure we know how to sail the ship, we need to learn to navigate and we need to get clear about the compass course we’re going to set once we get under way. The harbour is a great place to do all those things. But there comes a moment when the pull of the wide open ocean becomes irresistible. That’s when it’s time to go. And when you do: Set the course, hoist the sails, put your gaze on the horizon, and don’t look back.
How do you get on the Journey?
And the second question: How do you get on that Journey?
There are many ways to strike out, but one way to get onto such a Journey of discovery, is with me. I take my clients on inspiring journeys like that all the time. You could think of me like the captain of the ship. I know how to keep the ship safe, I know how to navigate, how not to hit the reefs and how to get safely back into harbour at the other end.
And I’d love to come on your next adventure with you.
Once you’ve decided that it’s time to push off and get under way, the process I will take you through is this:
We’ll get very clear about the state of your business and life as it is at the moment. What are the strengths of the business? What are your strengths as the business owner? Where are the stresses in your life? What are the areas in the business that are falling behind? What are the areas you need to develop in as leader?
We take several small steps first. You’ll get to put your toe in the water, feel what it’s like working with me. It’s called the Five Steps to Discovery Process, and it’s mostly free.
We’ll get equally clear about what we want the other end of the Journey to look like. In 6 – 9 – 12 months what do you want your business and your life to look like, in great detail? We’ll develop an enormous set of Goals and picture of the desired future. The Goals will include tangibles, and intangibles. It will include financial targets, and KPI’s across all areas of the business and your life. It will include your state of mind and your health and wellbeing, and everything else that you need to explore and discover to build the business and the life you dream off.
We’ll develop a strategic plan for the achievement of the Goal, with a wide range of monthly milestones.
We’ll shake hands and commit to the Journey, get on board, set the compass course for The Goal, push off, and not come back.
Ultimately, making the decision to Change, to get on the Journey, is Fun. It may not always appear that way, when looking out onto the vastness of the ocean at first, but it will be the most satisfying decision you’ve taken in a long time… I promise you.
Work-life-balance is elusive for most business owners, but here’s how to find it
Work-life-balance is a term that’s been bandied about by many business and life coaches, in the books and videos by the life style gurus and in the personal development industry. It’s what we’re all supposed to be creating for a long and happy life. It’s the dream. Sadly, it’s a distant dream for many business owners.
One of the reasons for the unattainability of the dream, is that the generally accepted idea of Work-life-balance is a myth. Many great philosophers and thinkers, such as the gently spoken Alain de Botton, consider that the way we think about Work-life-balance is fantasy (Watch Alain de Botton’s TED Talk here). We need an entirely different picture to model our lives on, if we want to feel satisfied about our life and work.
And you know this is true too, because in your business, if anything is to get done at all, it’s down to you; if you don’t do it, the whole thing collapses like a house of cards. You’re often the first one in the door in the morning, and the last one out the door at night. You have breakfast and lunch on the run, and after the kids have been put to bed at night you have to catch up on your admin and quoting. And by the way: Isn’t it funny how with every new staff member you employ to lighten your workload, you seem to get busier?
Work-life-balance: It’s personal
To create a better Work-life-balance in our lives as small business owners and entrepreneurs, I believe there are a few principles we need to understand first:
Balance is a personal thing, what works for you won’t necessarily work for anyone else.
What feels right, is right. There are no hard and fast rules for balance.
Balance is a never ending negotiation. There is no set formula for balance. Priorities change constantly in life and business.
Sometimes we’ve just got to do what’s got to be done.
There’s nothing wrong with working hard, there’s nothing wrong with averting a crisis, but too much is too much.
Sometimes, not doing something, at all, (whatever the thing might be at this moment), or not doing it perfectly is fine. Your business and your life will most likely survive and the world will not come to an end.
Nobody has ever come to the end of their life and said: “I wish I’d worked harder”.
There is no rule book for Work-live-balance. There have been times in my life when I’ve worked insane hours while feeling totally balanced, in “flow” and happy, and other times when I’ve worked much less hard, yet felt overwhelmed and stressed. And just because I might work fewer hours per day, than you might do, doesn’t mean I have achieved better balance than you do. If you feel that your life is balanced, it is, and if you feel your life is out of balance, it is also.
All-nighters can be fun sometimes, can’t they?
As business owners, sometimes we’ll be confronted with situations that simply mean we have to pull an all-nighter or work on Sunday. It’s part of the package of being a business owner. It can even be highly rewarding to pull an all-nighter on a project, with a deadline looming and at the end of it, know you’re the one that’s made it happen, pulled a rabbit out of the hat. It can be one of the most fun experiences you have in business.
I will always remember the last weeks leading up to the opening of the Olympics in Sydney in 2000. I and my team worked every hour that God gave us for two weeks straight to complete the fit-out of the Holland Heineken House in Darling Harbour. It was probably the hardest I’ve ever worked in my life. That’s now 18 years ago and I have nothing but fun memories of that period (and about the 14 day long party with 100,000 of my closest friends in the Holland Heineken House afterwards).
The simple fact is that if you feel good about your life and the mix of things you spend time with, you’re in balance, and if you walk around feeling bad about the fact that your kids or your spouse or your choir or your health and fitness or your peace of mind are missing out, then your life is not in balance. And what’s more, it’s really important to understand that what is right for you today, may not necessarily be right for you tomorrow. It was perfectly alright for me to spend those weeks building the Holland Heineken House and barely seeing my family, for those weeks, at that time.
Things change… Don’t they?
But it would not have been alright for that to be my life all year round. It may be fine for you right now to catch up on your email after the kids have gone to bed, but it may also be that at some point in the coming year it will start to bother you, and then it’s not alright anymore.
But one thing is absolutely sure. You’re going to want to take the issue of balance in work and life seriously and check in with yourself regularly what is and what isn’t right, and you will want to move towards finding the balance that is right for you, because nobody has ever laid on their death bed wishing they’d worked longer and harder. (The top five regrets of the dying)
The 4 quadrants of time management. And also watch my video about managing the most valuable asset of your business here
Learning to delegate (one of the 4 D’s, see below)
Work-life-balance follows automatically once: you’ve learned what really matters in your life, you learn to say No to the stuff that doesn’t matter, you learn to trust that you’ll probably make the right decision (after all you’ve got this far, why not assume you’ll continue to do ok), and finally you learn to set time aside for the important stuff you must do and delegate the rest (or apply the 4 D’s)
Once you’ve learnt all of that, you’ll have started to create a Beautiful Business and Life and that although it mightn’t look like Balance to an outsider, it works for you, and that’s all that matters.
I’d love to help you take those 5 steps above. I have created a Five Steps to Discovery Process to help you get moving and find greater balance in your life and Build a Beautiful Business and Life. The steps are small and mostly free, find out more here.
The 4 D’s
The 4 D’s I mentioned a couple of sentences ago are a nice management concept. The idea behind the 4 D’s is somewhat parallel to the 5 things I talked about above. For any task that comes across your desk consider one of the 4 D’s:
Do It –If it takes less than two minutes, and it needs to be done, just do it now. You could schedule it for later, or delegate it, but it might take you a couple of minutes just to do that. Save yourself the hassle and do it now.
Diarise It –if it’s going to take more than two minutes, if it’s got to be done, and you’re the right person for the job, block out some time in your diary in the next week or two to Do It.
Delegate It –The secret of getting more done and scaling your business is to delegate, delegate, delegate… So get good at delegating and look for every opportunity to do so.
Dump It –When you really stop and think about it, and you have a look at the 4 Quadrants of time management, some stuff isn’t actually all that important… A lot of demands on your time are firmly in quadrant 3 (urgent bu not important) or maybe even quadrant 4 (neither urgent, nor important) … The world won’t come to an end… What’s the worst that could happen… DELETE.
Have a look at my Big Pain of Small Business survey to see how you compare against other business owners on balancing work and life. You might also like to complete the very short Richard Branson Questionnaire, to see how you compare against the most famous of all the noble knights of business, who also seems to have his work and life sorted better than most of us poor peasants.
Each of the 7 Big Questions has a dedicated page on this website, with links to many relevant resources both within my website as well as throughout the internet. Scroll down or click on the links above for a summary of each of the 7 Big Question with a link to that question’s full page.
Summary: To build aBeautiful Business and Life, we need growth. Seth Godin made a great statement some years ago on his blog. He said: To build a great business you only have to do two things: first you have to do great work or deliver a great product and second you have to make sure lots of people know about it. And that’s exactly how simple it is to build a Great Business that Stands the Test of time. But, as with so many things in life, it’s easier said than done.
Business growth is about research and product and systems and quality assurance and innovation and inventory management and people management and everything in between and then when you get that right, it’s about customers, and marketing and sales and social media and communications and PR and SEO and content marketing and advertising and design and branding and of course leadership and you might well argue that before all of that comes Visioning, Mission, Purpose, Goal setting and Strategic planning. In short Business growth touches all aspects of business. Read More Here…
Summary: To build a Beautiful Business and Life, we need to make profit. A business that doesn’t make profit and that doesn’t generate cash flow isn’t a business, it’s a hobby. Profit is not the Purpose of business, and nor is generating Cash the reason the business exists, but without profit and cash it is not possible for the business to deliver on it’s Purpose.
Business growth will have an impact on the flow of profit and money in the business, both positively and negatively, but many other aspects of business have an impact as well. There’s pricing, discounting, inventory management, costing, trade terms , collection policies and procedures, expense management, cost control and many other aspects of business will determine the profitability and sustainability of your business.
And on the other hand there is financial management. The management , reporting and analysing of the flow of profit and money through the business. Having your fingers on the pulse of all of the key indicators of the health of your business every day, week, month and year. Management of the numbers in other words. Read More Here…
How can I become less overwhelmed and feel happier every day?
Summary: To build a Beautiful Business and Life, we need to get unstuck. In my experience, business owners operate in a state of overwhelm many days of the week. They’re often first in the door in the morning, last out the door at night and have to catch up on their admin and email after dinner. They run around from crisis to crisis most days, extinguishing brush fires along the way.
Staff don’t seem able to tie their own shoe laces without input and supervision from the boss. Customers expect the business owner personally to solve all their problems, immediately, rather than the perfectly qualified and expensive staff that are employed by the business for that purpose.
As a result, the critical business development projects are constantly pushed back and the business gets stuck in the mud. The way out of this overwhelm is to learn to focus on three letters FUN. Fun in Business is the opposite of overwhelm. Developing a discipline on making Business Fun again works, because when business is fun it means everything is working. Read More Here…
How can I find the right support, advice and guidance?
Summary: To build a Beautiful Business and Life, we need support. One of the most consistent complaints I hear from business owners is that it’s all down to them. They feel alone and unsure of themselves. They need to have a sounding board. The people around them don’t get it. The staff are affected by the decisions the business owner needs to make, and so are their spouses and family.
Human beings work well with external accountability and advice. Independent external support is invaluable to any business owner who wants to build a Great Business that Stands the Test of Time. External support can take many forms: A mentor, a business or life coach, management consultant, a virtual board, an executive coaching group, a regular get together with a group of fellow business owner buddies or all of the above.
One thing is for sure: Don’t think you can do it on your own. But how do you go about finding the right support for you? Read More Here…
How can I find work-life-balance in my business and my life?
Summary: To build a Beautiful Business and Life, we need to create a balance between the demands of the business and those of the rest of our lives.
In the many years I’ve worked with business owners, I’ve come to believe that business owners are the most ‘guilt driven’ people on the planet, “worse than Catholics” I sometimes joke. Business owners generally go through life believing they are not up to the job in some way. They tell themselves (and me), that to compensate for their perceived failures, they’ve got to work harder than anyone else in their business or else how could they ever ask their people to put in the hard yards when required? (see also what I wrote above about overwhelm). But in the mean time they’re missing out on the important stuff in life. Their health and well-being suffers, as are their families.
For business owners to create a greater balance between work and life, the first step is to acknowledge that owning a business is never a 9-to-5 job, you probably won’t ever be able to close the door behind you on the way home entirely. The business is your baby, you’ve put your heart and soul into it and it’s part of who you are as a person.
Once you acknowledge that fact, the immediate next step is to recognise that your own time, your health and your general well-being are the most valuable and important assets of your business and as the business owner it is your prime responsibility to look after your assets. In other words, not looking after yourself and ensuring you are in a great physical and mental state means you are not taking your responsibilities as the owner of the business seriously. Once you’ve learnt to accept the realities of those two principles (contradictory as they might seem from time to time), you’re on the path to create the business and life you dream off. Read More Here…
How can I become a better business owner and leader?
Summary: To build a Beautiful Business and Life, we have to become better business owners. As I’ve said above in the “work – life – balance” summary, most business owners feel they’re not quite cutting it as entrepreneurs. Oftentimes, business owners start their business on the back of their profession, trade or skill they have learnt (plumber, architect, accountant, chef) and they feel confident in that particular skill. But when they start a business based on that profession, they suddenly realise that it takes a lot more than being a great plumber to build a great plumbing business.
Few business owners have studied to be a business owner, and even those who have attained an MBA or similar qualification, find that they’re not prepared for the realities of life as a small business owner. Suddenly everything is down to you, the big decisions about whether or not to bid for that contract, or hire that expensive employee, or sign the lease for the new office, as well as making sure the toilets are stocked with toilet paper and that there’s ink for the printer.
To top it off, your people look to you for having vision, having the answers and being the leader. It’s a frightening place to stand in the middle off, but there are three pieces of good news: (1) You got this far and you’re still breathing so you must be doing something right. (2) Your people actually want you to be the leader and they’re ready to forgive you just about any balls up you’re going to make along the way. (3) Leadership is something you can learn, practice and get better at. Read More Here…
Family business: How can we negotiate our roles as business and life partners better?
Summary: To build a Beautiful Family Business and Life, we need to get good, both at working with our spouses as well as living with them. As I’ve said above in the “better business owner” summary, many businesses are founded on the profession of the business owner. The plumber starts a plumbing business and the lawyer starts a law practice. A little way into the life of the business, the founder of the business, along with the spouse of the founder starts to appreciate that it takes more than being a great lawyer to build a great lawyer business and the business flounders.
Often, it is at this point that the spouse decides to enter the business as well, to sort out the chaos, in no small measure, to protect the interests of the family, and the family business is born. 70% of all businesses in Australia are family businesses and a large percentage of those can be classed as husband and wife family businesses.
In my experience there is wonderful opportunity in being in business with your spouse. It holds the possibility of providing for your family very well and there is a great opportunity to grow as a couple. But waking up beside your business partner in bed every morning also comes with a bunch of unique challenges. Read More Here…
Mirror, mirror on the wall, who is the fairest of them all?
This is the first post in the series of The Ten Priorities: Laying the Foundations for a Great Business and Life. The first Priority is about You, the business owner. The introduction to this series on The Ten Priorities is here.
As seen on Kochie’s Business Builders on Channel 7, on 1 October:
I sometimes like asking my clients what they think is the most valuable asset of their business?
Most people I ask that question of will mention, their customers, their staff, investments, equipment, IP, etc.
Of course, it’s a trick question, because the answer is, it’s You.
All other assets, as valuable as they might be, you can buy, borrow, hire or steal more of. But you, your time, your health and your brain cells are absolutely limited.
The first responsibility of any business owner is to look after the assets of the business and to maximise the return the business gets from those assets. And so, the most important job of a responsible business owner is to look after him- or herself.
Breakfast sitting down
Responsible business owners prioritise themselves.
They ensure they get enough sleep and rest. They ensure their brain gets time to relax, so it can function optimally. They ensure they have breakfast sitting down, most days. They get some form of regular exercise and they look after their own mental health and wellbeing.
You won’t always be successful at prioritising yourself, some days things just get out of hand, but regularly, maybe at the start of every day, stop for a moment and plan some space for yourself in the day.
If you take the responsibility of looking after your most valuable asset seriously, you will start to build a Great Small Business that Stands the Test of Time, and your Life will never be the same either… I promise you