07 Dec Business You
I strongly believe being self-employed is the second hardest occupation in the world (parenting is definitely the hardest).
When you are employed you have the luxury of only doing what you are good at doing and not having to worry about the rest.
If you are good at accounting, you are the accountant. If you are good at marketing, you are the marketer. If you are good at plumbing, you are the plumber.
You get the drift?
On the other way round, if you are self-employed, then you have to do everything! Regardless of your niche or skill set, you have to be across everything.
You are the accountant, the marketer, the HR consultant, the business strategist and even the plumber in some cases!
That is what makes being self-employed so difficult, there are so many areas of concern to be across.
In my experience, when you need to be across so many things something always gets missed.
In a lot of cases, it is Business You.
What is Business You?
I firmly believe that you should run yourself like a business. You should run yourself to maximise LONG TERM sustainable profit and reduce your expenses.
However, I find that many SME owners (both successful and unsuccessful SME owners) often fail to run Business You.
You have a close friend (we always use close friend because this will never happen to you right!) who is running a business. However, it is not that clear whether what this business is, what is actually does and whether it is making money or not.
So, curiosity gets the better of you and you ask.
Friend: Ummm, well I do a few different things in my business, depends on what I feel like actually.
You: Okkayyy, so are you making a profit?
Friend: Ummm, not sure actually, truthfully I have no idea what sort of income I make and I don’t really keep track of my expenses. I seem to have enough in the bank account but not much else
You: Okkayyy, so where do you want to be in five years?
Friend: Ummm, I have no idea actually, I just take each day as it comes! Just want to keep paying the bills!
You: Okkayyy (makes up excuse to go to the toilet to avoid this awkward and confusing conversation!)
If you are a small business owner, would you expect this business to still be around in five years? Do you expect this business to grow? Do you expect this business to be successful?
I’m not a business coach, but I highly doubt it!
Can you imagine Jeff Bezos, Mark Bouris or Gary Vaynerchuk running their business like this?
If you are a successful business owner I am sure you have a plan about your long term goals and objectives. I am sure you have a good idea of your revenue and expenses and how much business you need to bring in each month to make a profit.
I am sure you have a good idea what you want your business to look like (not just financially but also from a lifestyle perspective).
If you are not across these areas, I would suggest you have hired someone to do this for you!
For the record, selling your business is not a long term plan. If you can make money from selling your business that’s fantastic, but this should not be your only wealth building plan. Just ask any taxi owner how that is working out for them…
So, here is the big question.
Why don’t you run your personal finances like you run your business?
As a financial planner, it brings me to tears how many business owners I know who have worked their guts out building a business but have failed Business You.
I can still picture the 55-year old electrician who built up a successful small business but didn’t have any personal assets to show for it. For health reasons he needed to retire in the next few years.
But he had less than $50,000 in super and a $250,000 mortgage on his home. Centrelink was not going to pay him what he needed to meet his living expenses in retirement.
For this successful business owner, it was all but too late.
There was no thought of retirement. There was no thought of building up an investment portfolio for when you cannot work. There was no thought into a personal insurances (what I refer to as a Plan B). There was no long term vision.
Employees get some of this (certainly not all) looked after via their employer or their super account by their employer.
Those who are self-employed are not that lucky. They have to do these things themselves. But when there is so many things to look out for when you are building your own business, Business You often gets neglected.
If you have the skills and capacity to run a successful business and a successful Business You, then hats off to you. Well done and I wish you every success.
However, if you know that Business You is not successful and there are things you should be doing but are not, then I think your Business You needs a Chief Financial Officer (CFO).
A Business You CFO will create a Plan A, ensuring you don’t work to age 90.
A Business You CFO will create a Plan B in case you are unable to work due to injury or illness, ensuring you and your family are financially looked after.
A Business You CFO can ensure your cashflow is structured so you can meet your ongoing expenses.
A Business You CFO can build confidence in your own financial situation and the comfort that you don’t have to be on the hamster wheel for the rest of your life.
A Business You CFO can help you ensure you don’t have to run your business by yourself.
I’m not here to tell you how to run your SME. There are other people much more qualified to do this.
But if you know your Business You is not where it needs to be, don’t put it off any longer. Get in touch today and let’s get your financial situation under control.
Don’t wait until it is too late. You deserve better.