Financial success can be found in a variety of ways. The best way to achieve it depends on your current situation. Success can be found through a rewarding job, building a business, making an investment, funding a retirement account or a combination. Unless you are specific, how do you know when you will achieve financial success? The clearer you are on what you desire the better the chance that you will succeed. Creating a vision and setting expectations requires education, planning and preparation.
Many years ago I knew of a doctor who set the goal of saving $1 million. He worked as much as he could to save. He gave up his time with family to earn it. He reached the million but didn’t stop. He was afraid the $1 million wouldn’t be enough. He even continued to work while recovering from a brain tumor. He put the financial goal before his health and his family. Is this financial success while sacrificing other key elements of life? Define what you are willing to give up to achieve this goal.
Success in a business is complicated. First why would someone take the risk to start or purchase a business? It could be a desire to have flexibility with their own time, to work hard for their own benefit rather than for others, may just want a job, have a need to follow their heart or looking for an investment. Again many times it is a combination.
Now let’s go deeper…
- What does it mean to have a flexible time schedule? Is it to attend your children’s school activities, pick kids up from school or take care of parents? For me I started my business to not work 65 hours or more a week during tax season.
- If you feel that having your business will allow you to work hard and feel rewarded, make sure that your skill set is marketable. I wanted to avoid office politics and focus on working with customers.
- If you can’t find your ideal job you create one. Be clear on your ideal job. Match abilities to potential income.
- Do you feel you are compromising your values or that there is a better way to do the job? Define the values desired in your work environment. I value competency and strong focus on customer.
Now let’s focus on the financial success side…
- When starting a business to replace your job the primary focus is to pay the owner an above average compensation package. If the business is intended to be an investment the definition of financial success changes. I pulled criteria from Warren Buffet’s philosophies. His list focuses on a sound financial long term investment and includes the following characteristics:
- Generating an above average net income for that industry
- Maintaining a strong track record of earnings for years
- Producing a healthy return of 25% or more on your investment
- Reducing the financial risk with little to no debt
- Ability to reinvest the income to increase Business value.
Every business can meet these needs if you follow these four steps:
- Know what you want
- Determine options that are available to achieve what you desire
- Find a plan that might work for you
- Then do it, refine it and keep doing it
Starting or purchasing a business is a journey, some are more enjoyable than others. No matter what it is –it is always a learning experience.
We are here to help you thru the process – whether it is planning, finding options, creating a plan or getting it done.
By Mary Guldan-Lindstrom, CPA