In the Disney film Glory Road, a star basketball player at Texas Western University is on the verge of flunking out.
In desperation, the coach summons the young man’s mother. She marches onto campus and proceeds to turns her son’s world upside down. She even attends class with him and “volunteers” him to recite all the answers she’s made him memorize! Everyone laughs as the basketball star squirms from embarrassment.
It’s a picture of great parenting. We see a mother’s clear priorities and obvious devotion. We witness her willingness to make big sacrifices. We marvel at her iron resolve to make sure her son has the work ethic he needs to succeed.
The problem comes when this noble approach to child rearing gets applied to business building. (And it happens more often than you think.)
Your children are your children. Your business is your business. The latter needs to work for the former.
Businesses are extremely valuable, but they’re not children. They don’t deserve ultimate devotion. Sadly, however, many entrepreneurs view their business creations as beloved family members. They’d give up anything to see their business grow and prosper.
All too often, this results in a damaged family, a business that’s only marginally healthy, and a financially stunted owner.
Here are three ways you can avoid unhealthy business priorities (and the pain they leave behind):
1. Differentiate between a hobby and a business. Sometimes people daydream about their passions—e.g., cooking, bass fishing, showing hospitality, doing home improvement projects—and think, “It would be fun” to: open a restaurant, become a fishing guide, run a bed and breakfast, flip houses, etc.
Interests like these can be either a fun (and often expensive) hobby or a legitimate business. Either option is fine. It’s just vital not to confuse the two. The difference is this: If it’s going to be a business, you’ve got to . . .
2. Determine to make a profit (or plan to perish). Profits are the natural results of a well-run business that offers a product or service that helps people solve a problem. If the business doesn’t offer something customers want at a price that’s attractive yet also high enough to deliver a profit, the business will cease to exist.
A successful business needs both—a desirable product and a pricing structure that both satisfies customers and sustains the company’s growth. The name for a business that fails on either or both of these fronts? Defunct.
3. Decide to put your profit ahead of the business’s profit. If you decide you want a profitable business, not just an enjoyable hobby, fine. But don’t stop there. Make your family’s financial health top priority.
I’ve seen so many business owners postpone their life—and the lives of those they love—for the “health” of the business they own.
They maintain ridiculously low salaries for themselves, while “re-investing” all those hard-earned profits back into the business. By refusing to borrow money to grow the business (“I’m saving interest!”), they rob themselves and deprive their family.
Do you really want to lower your salary to make the books look better? Do you think it’s a good idea to put all profits back into the business if the business can’t even afford to pay today’s low interest rates on a commercial loan?
Forcing your business to carry its own weight will keep you honest about how healthy the business really is and how healthy your personal balance sheet ought to be.
Before you automatically plow profits back into the business, pay yourself. Demand that your business “earn” any bonuses or “raises.”
It is good to sacrifice for our children, to make them top priority, to go the extra thousand miles to see them succeed. Our “commercial offspring,” while important, are not worthy of that kind of extreme devotion.
Your children are your children. Your business is your business. The latter needs to work for the former.
Best to not get that confused.
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