One of the frequent limiting beliefs I see in small business owners is the idea that profit is evil. It’s one of the biggest contributors I have seen to the endemic poverty mindset plaguing our micro-entrepreneurs. It’s time to shift this thinking and make friends with our money. After all, if you think it’s so bad, is it any wonder you don’t have any?
I have had these ideas dancing in my brain for years, and I need to thank Ed Kless for inspiring this article at last. I was taking Ed’s webinar on The Top Ten Business Myths, and his #1 Myth went hand in hand with root of this limiting belief.
Ed Kless’s #1 Business Myth: Business is a Zero-Sum Game.
I called Ed later to ask him to expand on this a bit more for me. He said, “We need to eliminate zero-sum game thinking. This is the idea that if somebody wins, somebody else loses. There is no finite pot of money that is going to run out. Wealth is created on both sides of a transaction.”
I loved this. When we help others we create a community where there is plenty for everyone. We simply need to understand the value of the things we want and need. You may think that paying four dollars for your fancy latte is highway robbery, but in the end you decide that you either want the money more or you want the coffee more. Begrudging the price of the coffee only keeps us from enjoying it to it’s fullest. We need to change the way we think about transactions and simply start seeing price in terms of value received. If something isn’t worth the price to you, then don’t buy it. It isn’t worth getting upset over.
“Business must be run at a profit, else it will die. But, when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.” – Henry Ford
Money and profit are not good or bad. They are neutral. They are whatever we choose to use them for. Money is the tangible and quantifiable energy that we use to manifest the things that we want and need in our lives. Profit is the battery that we use to power those wants and needs at a later date. The most important thing to keep in mind is WHY you are doing what you are doing. What dream are you working to fulfill? The dreams are why we exist.
“Profit is the price we pay for tomorrow.” – Peter Drucker
In order for a business to survive, it must be profitable. Also, as the business owner, it’s important for you to recognize your essential and valuable role in your company. You need to get paid! It’s important to understand your cash flow and plan ahead to set aside funds for your pay as well as your company’s profit.
These are some of the key fundamentals that we coach our clients on at Polymath as members of the Profit First Professionals.