The Realities of Entrepreneurship: Why Money Matters for Business Owners

As an entrepreneur, you’re often told it’s not about the money—until there is none.

That’s when you realise that while money isn’t everything, it certainly becomes the only thing when it’s missing. This stark reality is something I’ve come to understand intimately through my own experiences and through the lens of fellow business owners. The past few years have been particularly challenging, and the misconceptions about entrepreneurship have never been more apparent.

It’s easy to assume that business owners are always ahead of the game, financially secure, and living the dream. But the truth is, this perception couldn’t be further from reality. Many entrepreneurs find themselves prioritising their business’s financial health over their own, often to their detriment. This imbalance can lead to frustration and a sense of being undervalued, despite the immense effort put into keeping the business afloat.

In an article I penned for a well-known business publication, I delved into the nuances of financial prioritisation for business owners. The motivation behind this piece stemmed from a blend of frustration and empathy. I’ve seen how the lack of money can become the root of all problems and, conversely, the solution to many challenges faced by entrepreneurs. It’s a conversation that needs to be had, and a focus that must be sharpened.

The distinction between being rich and being wealthy is crucial, especially for entrepreneurs. Being rich might mean having an accumulation of money, but being wealthy encompasses so much more. It’s about nurturing relationships, maintaining health, and creating a life that’s not just about the financial bottom line. True wealth allows you to enjoy the fruits of your labor and possess the resilience to make the most of your earnings.

This brings me to a concept I advocate for passionately: MRS ROI.

It’s a framework that helps business owners distinguish between their roles as managers and shareholders. In a corporate setting, these roles are often separate. A CEO may draw a market-related salary and receive bonuses based on performance, while as an investor, they would also expect a return on their investment.

However, in a private business, an owner often wears both hats. They should draw a fair salary for their work and also see a return on the investment and risks they’ve taken. Unfortunately, this doesn’t always happen. Business owners may end up in a cycle where a good month means everyone else gets paid except for them. To break this cycle, it’s imperative to define what you’re worth, pay yourself a salary as soon as the business can afford it, and budget for profit.

I’ve had the pleasure of discussing these insights with a friend, Dean Horn from SuperTyres, and fellow entrepreneur who has been at the helm of a family business for over a decade. He’s successfully built a recognised brand in the South African motoring and tyre industry and has firsthand experience with the challenges and triumphs of entrepreneurship. He shared that taking over a family business is far from a walk in the park. Over the years, the business landscape changes, and each generation faces its unique set of challenges.
When he began his journey with business coaching, he felt overwhelmed, likening the experience to standing at the foot of Mount Everest, barefoot and naked. Yet, with determination and a step-by-step approach, he has managed to create a thriving business culture that operates efficiently, even in his absence. Embracing the “fluffy stuff”, as some might call it, like culture, vision, and purpose, has been instrumental in transforming his business. He’s found that focusing on creating a positive work environment and treating employees as the first line of raving fans has had a profound impact on customer satisfaction and the bottom line.

As we navigate the entrepreneurial path, it’s clear that there are no shortcuts. Hard work is the foundation upon which success is built. It’s about putting in the effort up front to earn the right to work smarter, not harder. And while the journey is fraught with challenges, the rewards of creating a business that not only sustains itself but also enriches the lives of those involved are well worth the toil.

Remember, entrepreneurship is a game. The more you play, the better you get at it. The more you understand the rules, the more you win, and the more you enjoy the game. Whether you’re at the beginning of your journey or well on your way, it’s about scheduling the time to reflect, plan, and prioritize not just the financial aspects, but the holistic wealth of your life and business.