Pay yourself first
Profit is not a dirty word.
It may seem inappropriate, but it’s not. My advice to entrepreneurs is always to align your business objectives with your personal objectives. It’s the best way to ensure your ongoing commitment, patience and persistence through all the roadblocks, detours and setbacks. Like making a career choice; find out what you’re good at and what you also like to do – do that.
If you’re running a business, you want it to succeed. I know you’re not in it just for the money, but it needs to be profitable to be successful. Your employees, customers, suppliers, business partners and investors, the governments and communities you support, are all counting on you. Don’t screw up!
You can ignore the pontificating anti-capitalist critics who think profit is a dirty word. If your business is profitable, they’ll assume you’re among the evil, greedy, selfish capitalists ripping off customers and employees and killing the planet. Don’t bother to argue, explain or apologize; they’ve already stopped listening. Stay calm, carry on.
Your business success is measured by it’s profitability over time. You will be judged on how you made it and how you use it, not on how much you made. Did you lie, cheat or steal to earn it? Are you investing your profits back in the business? Are you paying employees fairly? Are you meeting your obligations to society, people and the planet?
You can pay yourself first; it’s important that you continue to be motivated and adequately rewarded for your leadership and good management in running a profitable business. It’s also important to have some of your cash flow going into other investments – to build your retirement funds, to diversify your portfolio and to avoid the risk of losing everything in a business failure. Just keep your own compensation within reasonably acceptable limits for internal and external equity.
Remember you are also counting on the support of the people who are watching you.
Be better. Do better.
Del Chatterson, your Uncle Ralph
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Read more of Uncle Ralph's advice for Entrepreneurs in Don't Do It the Hard Way & The Complete Do-It-Yourself Guide to Business Plans - 2020 Editions.
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