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Money isn’t everything and nor should it be. However, building a sustainable and financially secure life is good planning. Strangely, we’ve found that business owners often prioritise financial security for the business over their own financial needs. The refrain that they don’t need to be ‘rich’ as long as the business is thriving, is oft repeated.
Whilst ‘rich’ is defined as the accumulation of money, ‘wealth’ means having enough money and the time to enjoy it. ‘Real wealth’ can be defined as the number of days you can live and cover your financial obligations and needs without earning money.
So many business owners don’t pay themselves an MRS (market related salary) or receive a ROI (return on their investment) via a portion of the profits. Rather, they tend to live a life of feast or famine with whatever is left over at the end of the month. Some regard their business to be their retirement plan and begin saving or investing and growing their wealth too late.
Considering the amount of blood, sweat and tears that goes into building a business, it doesn’t seem right that so many find themselves out of pocket whilst working all hours.
So how can business owners go about creating and achieving their own wealth? Sticking to the basics and remembering that building a successful and sustainable business remains first and foremost. The critical success factors in the achievement of this are:
Yes, customers are essential and the lifeblood of any business. However, avoid the obvious trap of becoming so fixated on the customer that it robs you of the time needed to focus on the finances. Key financial focus areas should include:
The purpose of a business, as we see it, is to: “Profitably create raving fans that generate surplus income for wealth creation.”
The more wealth we create, the more freedom of choice we have. This opens a plethora of different options. It affords us the space and time to focus on our own lives and what is important to us – be it more time with family and friends, new skills, hobbies, helping others or ultimately, leaving a legacy that will continue long after we are gone.