What are your personal goals? Is your business structured to accomplish those goals? One of the most important things to consider when starting, running or changing a business is what you, as the owner, want out of it. In the corporate world, the goal must be to generate as much profit as possible and maximize shareholder value. But small business is different. Small business still works for the shareholders, but the shareholders are typically only one or two owners who interact directly in the business. Also, maximizing shareholder value may never mean increasing profits or indefinite growth.
In 2018, I had an incredible opportunity to participate in the Goldman Sachs 10,000 Small Businesses program, a three-month course taught by world-class professionals and business school professors that offers a comprehensive business education to each participant. Every aspect of small business is covered, including determining the value of opportunities, developing a business plan, understanding financial statements and negotiating contracts.
One of the first tasks we had to perform was thinking about and writing down our personal aspirations. This forced us to deeply consider what was important to us in our personal lives and what we wanted going forward. Some participants wrote about becoming fabulously wealthy. Some wrote about changing the world by focusing on social concerns. Some wrote about having more time to spend with their children. The purpose of the exercise was to lay a foundation for structuring your small business to make it work for you, instead of the other way around.
If your goal is to make millions per year in profits, then maybe the structure of your business should allow for quick, massive growth requiring intense focus, lots of hours and skill in acquiring capital. If your goal is to make a social impact, maybe your business should be structured as a nonprofit that focuses on helping people in need or improving the environment. If your goal is time with your children, then maybe the focus will be on structuring the business to provide enough income, while allowing you to spend time away from the business.
Every year in January I develop a theme for the coming year. For 2022 the theme was improved cash flow management efficiency and increased time spent away from the business. This required an in-depth look at financial statements and some new decisions on what to do with profits. It also required a review and adjustment of systems and processes to ensure that the business can function without my input at every moment. But, most importantly, it required a decision about what’s more important: more time or more money. I decided that for this year, time was more important than profit. I wanted time for my young kids, and time for personal growth. Next year, you can make more money, but you can’t get back this year’s time.
So many small business owners spend most, if not all, of their lives working essentially as an employee of their own business. But it doesn’t have to be that way. With some deep thought and some initial hard work, you can make the business work for you, make it fit the life you want. What’s the point otherwise? If your business doesn’t allow you to live the life you want, then why are you doing it? Not because it’s the easy way to make a living – we all know that isn’t true. When is the last time you sat down and thought about what you want your life to be, and how to make it that way? Stop what you’re doing and get to thinking.
If you’d like more information on the Goldman Sachs 10,000 Small Businesses program, visit 10ksbapply.com. If you have an opportunity to participate, make the time to do it, because it will change your business and your life for the better.