Personally nothing get’s me fired up more than people who say they are in business “just” to make money.
This is a completely ignorant and destructive perspective that often ends up with people getting themselves into some sort of trouble.
Money is a terrible focus to have in business.
I can hear the moaning from here “Kerwin do you have rocks in your head… businesses need money to survive”
Let me explain.
To be clear I’m not saying you shouldn’t be all over your finances and reporting fortnightly or monthly. I do and I own it.
I’m not saying you shouldn’t have revenue goals and bust a move to reach them. I do and I own them.
I am not saying a business should not be profitable and have abundant revenues coming in. I am and I’m crushing it.
I’m talking to people’s motivation and drive for getting into business and their expectations in the early days around income and especially what to do with said income.
More specifically – their psychology around money and how it relates to business.
Human behaviorist Dan Pink in his book, Drive – The Truth Behind What Really Motivates Us, demonstrates with compelling evidence that people who focus on money are 80% more likely to get into some sort of trouble and fail.
He shows that people who focus on money make more mistakes, have a narrowed focus (that leads to missing things and making more mistakes), and are more likely to lie and deceive unconsciously and consciously to get the cash.
I do a lot of speaking all over the world and something what stands out is how many people view building a business to be some kind of cash machine.
I get it… I was at one stage early in my path “that guy”. So I understand this perspective.
Makes sense BUT it just doesn’t work.
Things changed pretty rapidly for me over the course of my first 3 years in business.
First of all my first 3 businesses were total failures that left me in a shit ton of debt. But in my 4th business I found my “money groove”.
I started making great money with sales over $1M in my first year. I was on cloud nine spending on everything I could afford and anything I couldn’t I got credit.
Convertible, house on the water and an apartment (to live and work), holidays, watches, expensive dinners and eating out every night. Shouting friends stuff, flying people around just to hang out with me.
What’s wrong with that?
Here was the catch… personally I was miserable, on the verge of depressed. And no matter what I bought or spent money on the feeling just got worse.
It was like I had taken a financial laxative because as fast as it came in it went flying out in the wrong direction.
I was at financial and emotional red line and the motor was ready to blow at any moment.
What I didn’t realise was 2 things:
1. You gotta Do what you LOVE.
At the time I was miserable and I was buying things to prop up my ego and make myself feel better because frankly I felt empty inside. And I felt like a total fraud in life.
Here I was making money and “living the dream” but I was depressed and hated getting out of bed. I felt like I had done something wrong to be successful and unhappy.
This is when I realised and learned the most important thing in entrepreneurship:
Rule # 1 Do what you LOVE!
I had a mentor at the time who told me “Kerwin, it’s not about doing what you love, it is about making money and the more money you make the more you will love what you do”.
He couldn’t have been more wrong than he was, that advice almost drove me to depression.
It wasn’t until I got out of that business 18 months later took 2 years off, playing, tinkering, learning and spent every cent I had and then sat there completely broke on the beach and asked myself this question:
“What do I love to do, that I could dedicate my life to and be happy whether it made me a fortune or not?”
I only had to ask it a few hundred times before the answer came back to me and it was:
“Help others succeed” More specifically business owners.
By this time, I had built some wicked skills in business, marketing, and sales and had something to offer so I knew I could do what I loved and do it well I just had to START.
15 years later still doing what I love and I have never been happier.
I have still had plenty of down days AND they ARE 1000 times easier to deal with and get through when you are pursuing something that lights you up when you’re in the moment doing it.
As my business started to grow I learned the 2nd thing:
2. Business is a hyper-leveraged investment vehicle.
The more you invest and reinvest in your business the faster it grows.
There’s an old saying “it takes money to make money” which isn’t true at all BUT it certainly helps accelerate it.
Businesses in the early days are cash hungry and the faster you can feed it cash and invest it into growth (training, marketing, talent, technology and good systems) the faster it grows.
The Single Biggest Mistake…
The single biggest mistake people make when their business starts to throw off money, is they go spend it on shit they don’t need to impress people they don’t know.
After all, that is WHY they (the money people) got into business in the first place: to make enough money to spend on things they want, luxuries and lifestyle.
And this is why so many businesses fail.
Businesses are an investment vehicle and for them to continue to grow and throw off even MORE money we must have the discipline to reinvest.
Truth is, MOST people don’t have close to the discipline required to reinvest as they want to eat the icing off the cake first before it has even come out of the oven and they end up getting burnt.
Delayed gratification is one of the most important traits for long term success in business and people driven by instagrat (instant gratification) are the ones littering the field with corpses of their attempts at being business owners and entrepreneurs.
It is safe to say at this point if you are an instagrat type and are not interested in training yourself to be long term you are best to get a job and save those you love from the chaos and destruction that follows this personality type into business.
Because if you are an instagrat it will be chaos not just for you but your family and friends too. A business is like a car it has the power to transform lives by providing safe transport over long distances to get access to opportunity.
And in the wrong hands a car can kill.
To sum it up
Do what you love and you won’t work, you will play.
You must be willing to reinvest in order to create significant wealth in business.
Go invest in your business.
Let me know your thoughts below.
- The hidden power of mushrooms | Julian Mitchell | Unstoppable #114 - October 13, 2020
- From the navy to the business world | Anthony Richardson | Unstoppable #113 - October 5, 2020
- How to produce tasty meat without killing animals | Michael Fox | Unstoppable #112 - September 28, 2020