Do you want to be paid the same amount every year for the rest of your life, doing the same amount of work every day? Of course not! That is why you went into business for yourself.
Yet there are plenty of business owners who look to fire their boss yet keep all of their same obligations and pay. Instead of seeking growth of profits, many business owners see only one benefit to owning their own business: not having a boss.
Many business owners fail to see the other benefits of entrepreneurship:
- Your business is a sellable asset
- Your business can bring you income and income growth
- You can structure your business so that you work less, not more
While these are some additional benefits to owning your own business, lets look at some reasons why going out on your own, yet still seeking the same, fixed salary is a bad idea.
It suggests you are forsaking growth
I have had many conversations with my a friend of mine, who runs his own accounting firm about this. He generally is the only one in his business who works on middle to large sized corporate accounts, a large revenue producing source for his business. Because he is overworked, he doesn’t have time to take on any more of these large clients.
I have explained to him on numerous occasions that if he were to hire another accountant who is experienced in working on these larger corporate accounts, he would have enough resources (time) between the two of them to take on more of these clients and thus, grow their revenues.
He refuses to do this, however, because he says that another experienced mid to large corporate accountant will cost more than the other accountants that he employs and it will cut into his profit margin thus reducing his take home pay.
We see here that he is neglecting long term growth in order to maintain short-term pay. While I have come to accept his viewpoint as reasonable since he is nearing retirement and is unwilling to take on as much risk, it is foolish for any newer business and/or younger business owner to forsake growth in the interest of maintaining a fixed salary.
Any business who isn’t focusing either on growth or reducing the business owner’s face time shouldn’t call themselves a business at all.
You are essentially, working for yet another boss: an overworked you
If you are working for a salary, you are neglecting growth because you are stuck doing all of the work yourself. You will be overworked and unable to reduce the amount of time you spend on technical tasks. In fact, the only possible way you can grow in this scenario is to work more.
Being an overworked boss may make it more difficult to manage your staff effectively and make it harder to lead your business to become even more profitable. You will become more stressed out and quite possibly take things out on your staff or yourself. Neither is a good situation.
More money for you!
Probably the most obvious benefit to focusing on growth rather than fixed, short-term income is that your potential for larger payouts increases. Who doesn’t want a larger payday? Change gears and look for growth of income rather than something that is stable and fixed.
You are working to maintain your income
Since you will be dedicating more time to maintaining your current pay, you will be spending minimal amounts of time planning growth, new revenue streams and new businesses for yourself. Your time is not dedicated to growing your income but maintaining it. You are violating a cardinal rule of giving your time unlimited value and that is: failing to delegate when you can and not focusing on bringing yourself more cash inflows.
Can anyone think of any other reasons why continuing to work for a salary is a bad idea? Does anyone disagree with these points? I am very curious as there are a ton of different reasons why one goes into business and there may well be some great reasons to work for a salary that I am overlooking.