Posts

Wealth vs. Riches – Which one defines business success?

/in /by

There is a significant difference between Wealth and Riches, and which one you choose will likely define whether your business is successful or not.

I was at a friend’s house in Maryland who lives on the water. We were sitting on his deck looking out over the water and I noticed that his neighbor had a nice 30’ sloop docked at his house. I mentioned it to my friend and without pausing he said, “Yeah, it’s a nice one, but I never see it go out.” I asked him to explain and he said, “Every spring he pulls it out of the water to knock the shellfish off and paint it, but I don’t remember the last time I actually saw him take it out. If it’s out, it’s certainly never out enough for anyone around here to notice.”

This guy was rich, but he definitely wasn’t wealthy. Riches equals money, but Wealth equals “the ability to choose what to do with my time.” Riches just accumulates money and stuff, but Wealth creates freedom. Too often business owners don’t make this distinction and buy off on the notion that piling up the money is the definition of success. This is leftover thinking from the 1980s and 90s that was expressed in the bumper sticker “He who dies with the most toys wins.” We got a chance to try it during the 1990s and 2000s, and it came up short.

Too often we intend that our business should throw off money, so at best, that’s all it does. But business should give us three things; two resources and a benefit.

Resource One: Money

You can do a lot of things with money, but getting money by itself is not a good goal. Ask anyone who has made a lot of it – Making money is not an empowering vision. Do you have an empowering vision that is bigger than making money? If not, you will likely never make a lot of it. The blue flame coming out your backside will come from having a vision for something that grips you, and money will just be a way to get there.

Resource Two: Time

Most business owners never ask their business for time, just money. So they get what they ask for – some money (usually not a lot). I expect my business to throw off both time and money, and relentlessly work to get the business to the point where it creates both assets for me. Without time, money is meaningless – it’s just a boat that never goes out.

The Benefit: Significance

The most important, least asked question in business is “Why?”. Most business owners have no idea why they are in business, so it’s no surprise they don’t know where their business is taking them. What is it that you could do with your business to create significance for you, your family, your employees, and in the world around you? The bigger that vision is, the more likely you are to succeed in your business. Significance, or creating meaning should be the reason you are in business. If you have a Big Why, you will be much more motivated to design your business in a way that it throws off both a lot of money and a lot of time. When you have both, you are Wealthy and can now choose how you will create significance in the world around you.

There are a lot of rich people in the world who don’t have freedom and haven’t done what they could have to create significance in the world around them. There are a lot more struggling business owners who just focused on making money and never made much of it because they never got a Big Why for being in business.

Go for “Wealth” – time, money and significance. We get what we intend, not what we hope for. Stop hoping your business will get there – random hope is a terrible business strategy. Instead, intend to build a business around your Big Why, and intend for it to throw off time and money so you can create significance. It’s not “He who dies with most toys wins”, but “He who lives with the best Lifetime Goals wins.”

Wouldn’t you rather leave a legacy than a pile of cash and a boat that never goes out?

Buy my book for a small business owner in Kenya. I’ll take it to them.

/in /by

February 7-20 I will accompany The 1010 Project to Kenya to explore ways to break the cycle of poverty by developing sustainable business models. Brian Rants, the Director of The 1010 Project asked me to work with them to think big and go beyond the typical craft-making and handwork solutions. We’ll be looking for ways to fund real businesses that work for the local economy – it’s an exciting and daunting opportunity.

We’ll be working in the Kibera slum with a population density of 1,250 people per acre. We lived on one acre in Farmington, CT for years, backed up against 75 acres of state forest. Kibera will be a different world. We’ll also meet with some nationally connected business leaders to involve them in the solution.

The size of the problem is overwhelming. Our solution will be simple – change everything; one person and one small business at a time.

What can you do?

Three things:

  1. Sign up for The 1010 Project Newsletter here – and keep updated about our trip and what we plan to do to.
  2. Make a donation to help fund the trip by clicking here. I will be funding my own travel costs; your donations will go to fund the in-country costs of the trip and the travel costs for Brian Rants, The 1010 Project Director, and to support the in-country permanent presence of The 1010 Project headed up by Keith Ives.
  3. Buy a copy of Making Money is Killing Your Business that we can take with us to Kenya and donate to a small business owner. I wrote this book as a comprehensive reference book for starting and running a small business, and I believe the principles work in any culture. It is normally $28.95, but if you want to buy one specifically to send on our trip, we’ll take it with us (it will be shipped in advance), and the cost will be only $15. This will pay for the printing, handling, shipping and for having your name placed in the book (address info will not be provided).

To buy a book to send with us to Kenya and present in your name, go to our pre-order site and click on the Book for Kenya button. We’ll present the book on your behalf to a small business owner in Kenya. We’ll only be able to take 150 books, so please order your Book for Kenya right away.

Is Your Business Making the Rules for You?

/in /by

He who makes the rules wins. The problem is your business is probably making all the rules for you and beating you up at every turn.

We have it all backwards. We build a business intending to work hard and make money at it, and then we just take whatever lifestyle the business is willing to throw off for us. We live in reaction mode – reacting to everything our business needs us to do in order to make money this month.

Every business should throw off three things for us – time, money and significance. We only expect it to generate money so that’s what it does. But a healthy business grows up and gives us all three.

Let’s get it right. Figure out what your Ideal Lifestyle is and what it will cost you to live there. Then intentionally build your business to produce that lifestyle. Stop taking whatever your business will give you, take control and start making decisions that will bring you time and significance as well as money.

He who makes the rules wins. If you’re in charge then make the rules and build a business that responds to your direction, not the other way around. Do you own your business or does your business own you? Who’s really in charge?

It depends on which one of you is making the rules.

Making Money is not an Empowering Vision

/in /by

To build a business that provides you the lifestyle you want, you need a vision that motivates you. And guess what? Making money is not an empowering vision. I know plenty of people who’ve tried it including me.

My friend Eddie Drescher has a client who told him, “After $150,000, it didn’t make me any happier to be making $500,000.” Some people push the numbers up or down, but you get the point—money never makes life more meaningful.

What we do with it can.

I made healthy six-figure incomes for years before I started The Crankset Group. One day a few years ago, while in one of those jobs, Diane, my much better half, came to me and said, “I don’t know how you keep going, because I can’t take this job any more and I’m not even the one doing it.” She was responding to the listlessness, the lack of power and meaning that comes from just making money.

She helped me identify that I hadn’t made any connection between the money I was making and what I could do with it to build a life of success and significance for myself, let alone for anyone else. It was as if making money was an objective that lived on its own and had no way of influencing what went on in the rest of my life beyond buying shiny objects.

But I knew intuitively that there is a deep connection between my work, the fruit of that labor, and how I could use that work to create a life of success and significance. It was the turning point that led to starting The Crankset Group. I make a great living now, too, but with better reasons than just making dough. I get out of bed easier and with more purpose.

A successful business owner eventually figures this out. Making money is not an empowering vision; neither is being trapped as an employee of yourself something you can call a lifestyle. Either way, if you want to be successful you’re going to need to figure out how to build a business that makes money while you’re on vacation, while you’re also trying to make money.

The successful business owners make sure they make money today, but they make sure they are building their future at the same time. And building your future almost never makes you money today:

  1. deciding what your business looks like 3 years from now
  2. putting together a simple 2pg Strategic Plan to get there
  3. Process Mapping your business so somebody else can do it for you
  4. hiring the right people and training them, etc.

None of these things make you money today. All they do is help you build a business you can enjoy for decades. If you’re focused on making money, you won’t get there. If you’re focused on building a business that makes money while you’re on vacation, you’ve got a much more empowering vision.

Are you working to make money or to build a business you can use to create significance for yourself and the community around you?

What an old guy told me that changed my life.

/in /by

The Time, Money, and Energy Conundrum – When I was just starting out, a creepy old guy (about my age – mid-50s) told me life had a built in problem. He said “The problem with life is this.

When you’re young, you’ve got all the time and all the energy to enjoy life, but no money. When you’re in your middle years, you’ve got all the money and all the energy, but no time. And when you’re retired, you’ve got all the money and all the time, but no energy.”

He then went on to say something very profound. “The key to a good life is to figure out how to have all three at once – you’ll make a lot bigger impact in the world around you if you can figure that one out.”

Lifetime Goals are foundational for figuring out the Time, Money, and Energy conundrum, for a very important reason. The definition of a Lifetime Goals is:

A goal which can never be checked off.

A true Lifetime goal can never really be fully completed – there is always something more you can do to make it better, more complete. Any goal that can be checked off as complete is not a Lifetime Goal. Been dreaming about that house on the spit of land at the edge of the lake with the thirteenth tee behind you? That is not a Lifetime Goal – it can be checked off, and once it is, it will no longer be motivating.

The red herring we’ve been fed is that the accumulation of junk is the same as Lifetime Goals. “My lifetime goal is to have $5 million in the bank, a Mercedes, a 6,000sf house, and a nice boat.” No it isn’t. Making money is not an empowering vision, and a goal realized is no longer motivating. This is just making money so you can check off the accumulation of junk. Wouldn’t get me out of bed for three minutes in the morning.

If you’re initially motivated by those things and obtain them, you’ll be sorely disappointed if you don’t have a bigger reason to have them than just having them. The old bumper sticker from the 80s – “He who dies with the most toys wins.” – was wrong. No, he who lives with the most motivating Lifetime Goals wins.

I believe every one of us was made to do something significant with our lives. Have you figured that out for yourself yet? If you’ve got a burr in your saddle or a blue flame coming out behind you for something that really excites you, you know you’re on to something. And everybody is going to want to be part of your life. Nobody runs to catch a stopped train – get yours moving and watch what happens.

You can solve the time, money, and energy conundrum and have all three at once, and make a lot bigger impact in the world around you.

Don’t focus on making money. No business can survive that.

/in /by

The biggest problem in trying to grow a business is that we’re too busy making money. It’s not a play on words – it’s a serious problem. You’re too busy making money.

The overarching swing and a miss here: We think that our purpose in business is to make money when our purpose in business is to BUILD A BUSINESS that makes money. These two things are worlds apart, and almost every business I work with is absolutely buried in making money, which will keep them from ever making a lot of it. Why?

Because businesses are in a constant fight to balance two things:

The Tyranny of the Urgent

and

The Priority of the Important

The Urgent things in our business come flying at us all day every day, causing us to be REACTIVE and defensive in just holding the business together as best we can. One of the biggest things that comes flying at us daily is the need to make money to cover today’s bills.

We get so used to this pressure that even when it’s no longer there, and we’re making enough money to buy a hot tub on a whim and go on vacation a couple weeks a year to somewhere exotic, we never leave this mode of business. We actually think the goal is to make money. It’s a dead end and a big reason why most businesses, if they every grow up, don’t do so for decades.

In contrast, the Important things sit in the corner and whisper to us “I’m really Important, but you’re right, taking care of me today won’t make you more money today.”

Taking care of the Important things requires that we be PROACTIVE, because the Important things almost never seem Urgent. Taking care of the Urgent might even bring you Riches (money), but taking care of the Important will bring you Wealth (freedom and the ability to choose what to do with my time.)

Do you want Riches that you don’t have time to use, or Wealth that allows your business to make money while you’re on vacation?

One Example of the Important: If you stop making money long enough to write down the processes that you think you’re using in production, you don’t make more money today by doing that. But you now have something that will save you big bucks in re-training, inconsistent quality of products or services to your clients, employee stress, crisis management, and on and on. But since we can’t see a way that it will make us money today, we always find a way to put it off until “later” (psst… later never comes).

The key is to strike a proper balance between making money today (reacting to the Urgent), and BUILDING A BUSINESS that makes money down the road without me even being there (proactively taking care of the Important now, not “later”!). If you’re focused on the Urgent, you’re business will never grow up.

Next week we’ll talk about how to create the proper balance between these two so you can pay your bills today and ensure you are creating a business that makes money without you down the road. It’s not as hard as we make it (and it doesn’t take as long, either).