Most entrepreneurs make the switch from a paid job to start their own venture with a vision in mind, whether it is to have a more flexible lifestyle or a grand plan to build a business empire and leave a lasting legacy.
However, as time goes on, the pressures of managing a business can obscure that initial purpose. All of a sudden, you have created a job for yourself, and it may even pay less than you could earn back in the rat race.
When I work with clients as their accountant, I often start by asking why they have a business in the first place. It's surprising how frequently the answer has become lost in the clutter of everything else that’s going on.
Understanding your ‘why’ is essential because the decisions you make should align with that purpose. For instance, if you started your business so you could spend as much time as possible with your family, it doesn’t make sense to chase rapid and massive growth that demands long hours.
Three reasons to be clear on your ‘why’ as a business owner
Setting goals becomes easier
If you want to build a lifestyle business that allows you to be available for school pick-ups, your reason for having a business may be to earn enough money to support your family while only working a 30-hour week. With this in mind, you’ll be able to make decisions that take you closer to this, whether it is hiring a VA to balance out your workload or adding to your qualifications so you can offer a premium service for a higher price.
Your ‘why’ may be to maximise your income so you can pay for private school and family holidays, which will drive you to find ways to maximise your profits.
Your ‘why’ will help you make financial decisions
You may be on a mission to create the leading brand in the country for what you do, with a plan to launch a network of franchises and become a household name. If this is the case, taking out a business loan so you can expand your team or lease inner city premises could be aligned with your strategy.
On the other hand, there’s no point pushing things financially just for the sake of it. When you’re clear about what you want your business to look like, you won’t be tempted to spend $10k per month on Facebook ads that will bring in more leads than you have the capacity or desire to handle.
You can choose your clients wisely
As an accountant and the Director of JVP Advisory, I appreciate having a flexible lifestyle and being able to work from home while my children are young. I’m deliberately not running a large accounting firm, and being clear about my reasons for starting a business helps me connect with clients who align with my values. As a result, I’m not overwhelmed and I don’t take on work that keeps me busy until late at night. I keep things simple and my clients appreciate this.
Adapting your ‘why’ as you grow
Your ‘why’ doesn’t have to be static. It can evolve as you and your business do.
You may begin with the goal of having two years of steady income so you can qualify for a home loan. Once that is ‘done’, you can invest more money back into the business and think about taking it to the next level. Your reason why might shift from being available to your children to creating opportunities for the community or supporting a charity.
Whatever your reason ‘why’, it’s important to have it clear in your mind. More than a nice-to-have, it’s a way to justify your decisions and plan for the future.
Need help to make your money match your mission?
JVP Advisory gives you an accountant who truly wants you and your business to succeed. Reach out to schedule an initial conversation.