Читать книгу Finance & Grow Your New Business - Angie Mohr - Страница 50

Money may not be the only reason that you have decided to start up a small business. In fact, entrepreneurs tend to have an inborn need to create and build empires that reflect who they are and that can be passed on to future generations. But starting and managing a business is a risky venture and with risk comes the opportunity for reward.

Conventional wisdom says that you should sacrifice short-term monetary rewards for long-term gain. Many small-business owners not only do not think about getting a return on the money they have invested into their business, they don’t even take a salary for the labor they invest. “I’ll start taking a salary later when the business can afford it,” is a refrain I frequently hear from small-business owners just starting out.

The danger of this thinking is that you may simply be subsidizing a business that cannot survive without you working and investing for free. The only successful business model is one that is able to pay all of its expenses as well as provide a return to its investors. Think about how long Microsoft would last if it couldn’t pay its managers or pay dividends on its shares. Likewise, for your business to be successful, it will ultimately have to pay a manager, whether it’s you or someone that you hire for the position.

Plan your remuneration right from the beginning. You know how much you will need from the business to pay your current expenses and you know how much you will have to set aside every year to fund your retirement (see Chapter 4). This is the minimum remuneration that you will need to plan for. If your business will not have access to the external financing necessary to pay you as the manager, make sure that you know how long it will be before it is able to do so. For example, it is easier to forgo a salary if you know that, in six months, the business will start paying you one. This will also help with your own personal financial planning.

The bottom line is, even if money is not your primary motivation for starting your business, plan for profits and build your business model around profitability. Not only will it make your life more comfortable now, but it will increase the value of your business when it comes time to sell it or pass it on to the next generation (we’ll talk more about exiting your business later in the chapter).