Show me a business owner, and I’ll show you someone who lives the self-employed paradox: working 80 hours a week so you don’t have to work 40 hours a week for someone else. And after you’ve invested your 80 hours, if there is cash left over at the end of the week, it’s yours. All yours.
And you deserve to be rewarded, right? A weekend getaway after working seven days a week for the last four months would really recharge your batteries. A new car would be just the motivation you need to keep hustling. And a little Amazon online shopping while procrastinating the next task smoothes the edges.
I started my business 11 years ago for only one reason: so I could put more money in my pocket. When I was hired as a staff accountant for a CPA firm, my production was about 50 clients per month. Within a year, I was completing 100+ clients per month, but there were no bonuses or pay raises. It didn’t take long to realize that if I owned the business, I would have personally profited from the additional 50 clients. I would have reaped the cash rewards of going down the learning curve and putting into place processes that improved my efficiency. It was a no-brainer. I quit my job and opened my business.
From the beginning, I viewed every extra dollar in my bank account at the end of the week as my reward. I had no reference or other life-experiences to cause me to believe owning a business could be any more than that. That’s what you did as a business owner. You worked, you made a profit, you spent the profit on personal stuff. I now realize that although I owned a business, I still had an employee way of relating to money.
About five years into my business, I realized my “why.” (See Start With Why by Simon Sinek). Owning my business has been the most liberating experience of my life. It has changed my politics and how I see the world. It has taught me more about myself and others than any book, church sermon or therapy session. And it has brought me the most joy. (I don’t have children, so I can say this!) I want to help others who also want the unique and life-changing experience of working for themselves. And one of the best ways to help others do this is to help them with their business finances. This is now my why.
Extra cash in the bank is not why you work 80 hours a week and think about your business the other 88 hours in the week. Cash flow helps you realize and fulfill a very important life purpose, because cash flow allows you to realize your business WHY.
Next time there’s extra cash in the bank, think about your why. Then use that cash to make it come to life. You may need to pay down debt or invest in better equipment. You may need to give your employees a much-needed bonus or raise. Or you may want to bring that new idea you’ve been thinking about for months to life. Cash is not your reward. Cash is a very powerful tool. Investing cash in your why will bring you your true reward!
My upcoming blog posts will provide specific and practical ways to effectively use your cash flow so you can increase your profits and grow your business. Once your business has true, solid profits (not just extra cash in the bank), you can then confidently take the profits that you deserve.