The reason any of us have ambition, build ability, and take action, is because of the personal rewards that come as a result – both financial and non-financial.
Before we look at the rewards from owning a business, though, let’s first look at the costs. Owning and running a business takes vision and courage, but it also takes three key resources: time, money, and energy. If the business goes well, then over time it will give all three back. If, however, the business does not go well it can even more quickly take all three away sending you into a deeper spiral.
As previously shown, on average, business owners work longer hours, earn less, and are more stressed. Most businesses consume a lot of time, money and energy and most don’t give a lot back. As such, it’s crucial to consciously and purposefully plan how you’re going to make money:
a) On the way through.
b) At the end of the businesses life.
You should never leave this to chance, especially if you’re a services based business which is harder to exit and generally needs to make the bulk of its wealth for the owner on the way through e.g. lawyers, accountants, other professional services, architects, trades.
When talking about rewards from business, money is the obvious starting point because even if you’re not money driven, everyone, and every business, needs money to survive and thrive. Everyone gets into their own business for a personal reason, whether to gain freedom, follow a passion or provide employment, but underlying all these reasons for most is the desire to build real financial wealth to make those personal dreams come true.
“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million”
“Time is money” of course, so if your goal is to have more time for other things like interests or family then the more money you make in business the more time you can afford yourself for other things by employing more staff, or taking a longer break, or selling some or all of the business.
There are of course many traps in the sole pursuit of financial wealth, though, and affluence has been described by some as a “5-star prison”, so it’s important to also look into the many other non-financial reasons why, for owning a business. We’ve listed these 10 key reasons why below:
- Stimulation – passion/variety/ creative fulfilment
10. Helping others/sharing knowledge/giving back
Self-esteem/actualisation/fulfilment in some form is what we’re all searching for, whether we know it or not, and can come from either internal validation (yourself) or external validation (others).
When thinking about the rewards you want from your business, you should also consider any ethical beliefs that are important to you as well. You can make a lot of money in a lot of industries but some of you may not be happy making money out of gym memberships when people don’t attend, diet DVD’s that effect very little change, or selling marijuana legally in Colorado.
As a business owner/leader, it’s important to know these reasons/rewards why you’re in business so that you can set values, vision and goals that are aligned to this.
WRONG EXIT Many business owners are reluctant to share their true financial aspirations and some even misguide themselves entirely. When asking one client what the motivation was for his software business, he declared that it was to “build a legacy for my children to inherit.” Less than 10 minutes later, however, when posed with the question of whether he would sell it for $20 million to Google he instantly got excited and said it would be a “no-brainer”. At this point he had a moment of realisation that he didn’t want to create a business legacy for his children at all; he wanted to create security for his family, a basic human need. From that point forward, he adjusted his entire view and operational approach of that business to a “build to sell” model.