“For me, it’s not about the money.” I was talking to a client about how to increase profits dramatically.
“What do you mean?”
“Well, I don’t want to be greedy and make too much.”
“So, how much is too much...?”
I didn’t get an answer. I never do. I know that some people (hopefully a small minority) are put off by my constant emphasis on making money. I know that because, as a business coach, I have talked with hundreds of small business owners about profit and have often had conversations like the one above. It’s as if the speakers feel guilty about making a profit or that it is somehow noble to loathe money...
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Me: “DO NOT BUY TRUCK.” It was my text to a client who was trying to scale his business. (He knew I was serious because I used all capital letters.)
Client: “Good price - need dependable truck for new hire.”
Me: “You have one - he can drive Ford you used to drive.”
Client, several hours later: “I bought truck.”
Me: ”I guess you’ll learn the hard way.”
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Just after I graduated from college and long before I learned the need for a cash reserve, I learned to fly small airplanes. At the time, I had enough money to rent an airplane, but not enough to rent the airplane AND pay for a full tank of gas. One afternoon my former instructor approached after overhearing me order a half-tank of fuel. “It’s okay to fly on a half tank,” she said, “so long as you run out of the top half of the tank, not the bottom.”
I often quote my instructor to business coaching clients because gas to an airplane is like cash to a business.
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“Martin, I’ve had it with growing my business and your push-through stuff. ” It was a text from a client. I called him.
“What’s up?” I asked.
“I’m going back to just me. I can’t depend on these guys I hired. If they show up, they mess up. I spend most of my time fixing their screw-ups, and I still have all of my work to do. They’re ruining my reputation, I’m out of cash, and I couldn’t pay myself last week. My life was better when it was just me. A lot better.”
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As a business owner, do you have to go to work? If you do, you are trading time for money, and that’s the definition of a job. Business owners should earn distribution checks, not paychecks.
A paycheck is compensation for time spent at work.
A distribution check is compensation for accepting the risk and responsibilities of ownership.
Distributions are a return on investment, which has nothing to do with going to work.
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