Financial success can come in many forms. The best path depends on your personal situation. Success might be found through a rewarding job, building a business, making an investment, funding a retirement account—or some combination of these. But unless you’re specific about your goals, how will you know when you’ve achieved financial success? The clearer you are about what you want, the better your chances of reaching it. Creating a vision and setting expectations requires education, planning, and preparation.
Many years ago, I knew a doctor whose goal was to save $1 million. He worked as much as possible to reach that milestone, sacrificing time with his family to do it. And he did it—he saved $1 million. But he didn’t stop. He was afraid it still wouldn’t be enough. He kept working—even while recovering from a brain tumor. In his case, the financial goal came at the expense of his health and family. Is that really financial success? It’s important to define what you’re willing to give up to reach your goals.
Success in business can be complex. Why would someone take the risk of starting or buying a business? It could be a desire for freedom, flexibility, working for personal gain rather than someone else’s, a passion project, or simply a job—or all of the above. In my experience, it’s usually a mix.
Now let’s go deeper…
- Are you looking for freedom? Do you want control of your time so you can attend your children’s school activities, pick them up, or care for aging parents? I started my business to have a life during tax season—specifically, one that didn’t include weekends.
- Do you want the rewards of business ownership? The chance to work hard and benefit directly from it? I wanted to escape office politics and enjoy building relationships with clients.
- Are you creating your ideal job? Make sure it’s marketable—are you solving a problem others will pay for? Think about your ideal customer, your ideal service or product, and your ideal business model. Identify your “superpower” so you can maximize your value.
- Do you want to live your values? Define the values you want reflected in your work environment. I value competency and a strong focus on customer service.
Now let’s focus on financial success
If your business is meant to replace a job, financial success likely means paying yourself an above-average compensation package. If your business is intended as an investment, the definition shifts.
I’ve pulled some criteria from Warren Buffett’s investment philosophy. His long-term investment benchmarks include:
- Generating above-average net income for the industry
- Maintaining a strong earnings track record over time
- Producing a return of 25% or more on investment
- Carrying little to no debt to reduce financial risk
- Reinvesting earnings to grow the business’s value
- Not every business will meet these standards, but these are solid targets.
Here are four steps to help you get started:
- Be clear on what financial success means to you—and what you’re willing to sacrifice to achieve it.
- Gather the available options to help you get there.
- Create a plan that fits your situation. Build your support team.
- Take action. Then refine, adjust, and keep going.
Owning a business is a unique and challenging journey—but it’s also an exhilarating learning experience.
We’re here to support you through it—whether you’re planning, exploring your options, building a strategy, or getting it done.
Mary Guldan-Lindstrom, CPA
