The Work-Life Balance myth for Small Business Owners

work life balance
work life balance myth
“By all means, put your life into your business but don’t let your business take over your life!”

I often hear people carry on about creating work-life balance. You probably do as well. Actually I reckon you’ve told yourself a few times that you should create more work-life balance, haven’t you? But work-life-balance is a myth for most people, especially for business owners.

It’s a nice concept. All ideas about life that revolve around balance are attractive and sensible.

Absolutely. Except for one thing:

For small business owners, your business is your life. So how do you go about creating a balance between two things that are largely one and the same?

Work-Life Balance is a Silly Idea for Small Business Owners

Ask any small business owner in the midst of getting his or her business off the ground and to a sustainable state, and they’ll tell you they virtually never switch off, they’re really never not at work. There is always a part of their brain that’s on the go:

  • I wonder what would happen if I bought that second vehicle?
  • Am I going to get enough money in this month to pay everyone?
  • I wonder if changing the headline on my website will have a positive impact on my Google ranking?
  • Where am I going to find my next new employee?
  • I think there’s an opportunity to offer my products to aged care facilities… How can I best approach that market?
  • We’re out of toilet paper in the office… Don’t forget to pick some up tomorrow on the way in.

It never stops… does it?

Conventioanl Wisdoms Are Not Going to Work for You

work-life balance The conventional idea of work-life balance is actually a nonsense for most small business owners. You can’t close the door behind you at 5.30, go home and switch off. Your office might be at home anyway, or you need to catch up with some admin after the kids have been put to bed.

That’s how it is in small business. Your business is such an important part of you that somehow separating it from your “life” and creating a balance between the two is simply impossible.

But at the same time it has been proven time and time again that everyone needs to switch off, everyone needs to sleep 7 to 8 hrs on average and everyone needs to have social and personal connections with others and that’s before we talk about kids and family, hobbies, sport or health.

How do you manage that as a small business owner so that you don’t burn out, become unhealthy and forget your kid’s names and birthdays (and they yours?)

I believe it starts by acknowledging that life as a small business owner is not the same as life as an employee. It won’t ever be and conventional wisdoms about work-life balance are simply not going to work for you. No point beating yourself up about it, no point telling yourself you “should” go home at 6 and not take the laptop. If you don’t finish that quote tonight you’ll miss the deadline and then the whole thing comes to a screaming halt… Tonight you’ll just have to get back to it as soon as the kids are in bed and if it takes to 2 am to finish the quote…so be it.

Frustrations and Joys

But there are both frustrations as well as great joys to being a business owner, and one of the greatest joys of being the owner is the fact that you can do exactly what you want, when you want and no bastard can tell you different.

I often work on the weekend. As a matter of fact I am writing this article on Saturday evening as we speak (Nigel no friends obviously)… But I don’t mind… On the contrary. I’m going to take off half a day on Monday to do two yoga sessions in the middle of the day and on Thursday I am spending several hours cooking dinner for my daughter and her family and I’ll probably knock off work by lunchtime.

The great joy of being your own boss is that you have the ability to design your work and your life to suit yourself:

  • Want to burn the midnight oil tonight? Great, go for it.
  • Want to sleep in tomorrow and go for a walk? Nobody’s going to stop you.
  • Wake up and the sun is shining, the surf’s up and it’s monday? Grab your board and jump in the car and have a ball.

And if that means you have to catch up tonight and tomorrow night, all good… You’re the boss.

To me, having the flexibility I have is the biggest reason I would never want to work as an employee ever again. It would drive me insane.

Idealised Pictures

Have I sketched an idealised picture of life as a small business owner? Probably.

Do most business owners actually have such a perfect life? Are most business owners actually living the dream?

No most of them don’t for one main reason: Guilt.

Guilt

guilt trip Business owners don’t take off and go surfing when the sun is out and the surf is up because of guilt.

True, right?

Tell me. how many hours a week do you think you have to be at work, working, not to feel guilty? Is it 40 or more?

Truth be told it’s not about the hours, is it? It’s about being seen to be the first one in the door in the morning and the last one out the door at night.

Really? Is that what you started your business for so you could always be the first one in the door and the last one out?

I had a first coaching session with a new client the other day. Talking about the logistics of having regular coaching sessions with me, led to her concerns about her work commitments and how to fit in the hours working with me. She said, can’t we have our sessions in the evening maybe, because today when I left the office I felt I had to make some kind of excuse about why I left the office for the afternoon. I feel guilty leaving the office when they’re all working hard on a Friday afternoon.

I often say that small business owners are the most guilt driven people on the planet (even worse than Catholics, and that’s saying something obviously)

Food for Thought

So think about this… You have created your business. You have given it life and you’ve done so, because you wanted it to provide a certain type of life for yourself and your family and to make you feel proud and challenged and excited and engaged and rewarded; to build on your resourcefulness, to maximise your skills and experience and expand your opportunities in life.

And instead? You feel guilty for wanting to sleep in tomorrow and get to the office at midday.

Do you see my point?

Exactly… You know what to do tomorrow I think!

More about the myth of work life balance and small business owners and yet build the Great Business and Life you dream off here.

Financial Management

profit

Why cash is more important than profit

register for webinar

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business. 

In this series of articles and associated webinars and workshops, by Roland Hanekroot you will learn the basic concepts and get the knowledge you need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some small simple “First Steps” you can take straight away to put the knowledge into action.

Financial Management

profitIn the fourth of these articles we’ll look at the Financial Management and ask:

What do you need to know and how do you need to apply that knowledge to put your business on a solid financial footing?

3 Principles

There are 3 principles you need to understand to manage the finances of a business well:

1)    Why do we need to make profit?

2)    Profit and cash are not the same thing at all and they don’t even have a direct relationship between each other.

3)    Cash is what you must worry about all the time… not profit

Why Profit?

Let’s address the principle about Profit first. The first thing to understand about profit is that it is not the purpose of business. Profit is a vital component of business, but it isn’t the reason the business exists. The Purpose of your business must be something much more important and something your customers actually care about. (More about this idea in my article about Purpose and Vision click here)

Why Profit?

Let’s address the principle about Profit first. The first thing to understand about profit is that it is not the purpose of business. Profit is a vital component of business, but it isn’t the reason the business exists. The Purpose of your business must be something much more important and something your customers actually care about. (More about this idea in my article about Purpose and Vision click here)

The 3 Functions of Profit

Profit has 3 functions:

1)    To pay investors and stake holders in a business a return on their investment.

2)    To provide the business with funds to invest in itself to grow or develop the business.

3)    As the thing by which we measure how well we are doing in running the business.

The first function is straight forward, if someone invests $100 or an hour’s work into a venture, that person wants to see a return for that investment. That return can only be payed out of the profits of the business.

The second function is also straight forward, in that, if you want to buy a new machine or tool or vehicle for your business you need to have the money to pay for that. Profit is what provides that money. (You can borrow for that purchase of course, but then the purchase is effectively made out of future profits)

The third function is about this: How do we know if our business is going well or not so well? The simplest method to answer that question is to keep track of the financial numbers and profit is one of the most important of those.

Profit and Cash

The second principle about profit and cash is what brings a lot of small businesses unstuck. A large proportion of the businesses that make up the horrendous statistics on failures in small business do so because of a lack of understanding of this principle.

Profit is a simple sum (on paper) of sales minus costs. So if you sell stuff in a week for a $100 and it costs you $50 in raw materials that week and $25 in office costs, it means that you have made $25 profit that week.

river Cash (your bank balance) bears little relation to those numbers in most cases. The $100 of stuff you have sold might not be paid for that week or even that month. You also might have had to pay for the raw materials some time previously and your office costs (staff and rent etc) may have to be paid every Friday. So that at the end of the week your bank account will actually be significantly in the red even though you’ve made a profit.

Cash Flow

So cash needs to be calculated in a different and slightly more complicated manner than the simple profit and loss equation.

When thinking about cash it is useful to think in terms of flow… money flowing in and out of your account, like a river flowing into the sea. If it rains upstream in Queensland for example, it may take a month for the Darling River to start swelling downstream in South Australia. So when talking about cash we usually talk about cash flow…. Money flowing in and money flowing out. If more money flows into your bank account in a given period than flows out in that period, your bank account swells and vice versa.

Cash is the main thing

cat And that brings us to the third principle that you need to understand about financial management of the business.

I said that the thing to worry about in your business is Cash and not Profit. For most people this is a counterintuitive statement.

The truth of this principle is actually much more straight-forward than you might think, because:

Only cash can be used to pay for stuff

Theoretically, your business may never make a profit and yet survive, as long as you continue to have enough cash to pay the bills, your staff, your raw materials, the rent etc. Obviously without making a profit, the business will ultimately run out of cash, but that can take years in some circumstances. So as a business owner who is committed to put his business on a solid financial footing, Cash-flow must always be your first concern.

This is the topic we will be talking about at the March Small Business Masterminds ‘live’ workshop as well as the Masterminds online webinar, both on 13 March. If you would like to attend either the webinar or the workshop, go to http://smallbusinessmasterminds.com.au 

Take the first steps:

As mentioned in the opening paragraphs of this article, I will suggest some “First Steps” actions you can take right away, that will get you started on implementing the topics and principles we discuss:

  1. Download the Article by Roland Hanekroot: “Cash-flow, the Basics”: follow this link
  2. Have a look at a great blog post on the Times of London about the importance of profit in business: Follow this link
  3. 5 ways to improve your cashflow in INC magazine: Follow this link
  4. If you are not already doing so, start by paying yourself a regular “wage”. A weekly or monthly amount you can live on as a minimum, and record this wage in your books as an expense to the business. You may decide to invest this money back into the business if you don’t need it to live on, but by paying yourself such a wage you will gain a more accurate insight into the profitability of the business and you will start to see how much money you are actually investing into the business and therefore should get a “return” on in the future.
  5. Start a proper bookkeeping program (Xero, MYOB, Quickbooks, Saasu, Freshbooks) and ensure it gets kept up to date at least monthly.
  6. Ask your accountant or bookkeeper for a simple cashflow spreadsheet and either start to use it yourself monthly or ask your bookkeeper to do so for you, you’ll be surprised how easy it is to start to get a handle on the cash flowing in and out of your bank account.

About the author and the Masterminds sessions

roland

Roland Hanekroot is a business coach who works with Small business owners to help them have more Fun in their businesses and build businesses that sustain them for years to come. Roland is also the author of “The Ten Truths books for Business owners” (more about the books here: http://thetentruths.com.au)

Every month Roland Hanekroot runs a business development workshop as well as a webinar called “The Small Business Masterminds” more information here and to register for the next webinar or workshop, follow this link: http://smallbusinessmasterminds.com.au/ The first time is free.