Sunday, July 15, 2007

What's the reason for running your own business ?

Why do you want to run your own business? Many owners could probably give many different answers but I think the answer is simple. PROFIT.

The trick here is to define what PROFIT is. I like to think of PROFIT beyond simply the money left over after you have taken out all your expenses. PROFIT for some people may be having more time to be with their family, for others it may mean being in control and able to make their own decisions and for some it maybe to make money. I think the trick to realise is that the PROFIT owners derive from their businesses doesn't have to just monetary.

On the other hand you need to make sure that a business is making a PROFIT ( be whatever you consider that to be ). If money is your definition of PROFIT then it doesn't make sense to be running your business constantly at break even or with minute returns. If control is your definition of PROFIT then it doesn't make sense then it doesn't make sense to let yourself be at the mercy of customers or suppliers. As any business owner will tell you, you have to take a hard look at your business and ensure that it is making a PROFIT.

If the business isn't profitable then you normally have two courses of action. You either need to determine why your business isn't profitable and make it work or you need to get out. Owning and operating a small business is not a bed of roses, there are going to be tough times, again and again. They will test your resolve to remain in business. However if you know what sort of PROFIT you are after then at least you know the direction in which you should be travelling.

You can't hope to get to your destination if you don't know where it is! Firstly, define what PROFIT you want from your business ( money, control, world domination, whatever ), then make sure you are working towards that every day.