02 May How Much Money is Enough In Business?
How much money is enough? It’s been my experience so far in business, that most people don’t think they have enough money — and then they want more of it, whether they’re making $20,000, $200,000 or $2 million a year.
To test this thesis, I asked fellow members of The Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs, “How much money is enough for you in your business?” These are their responses:
1. Numbers Change With Business
I think many entrepreneurs (myself included) would agree that as a business evolves and grows, so does your concept of “enough.” On one hand, this isn’t such a bad thing (as presumably, the more money you’re making, the more people you’re helping with your work), but on the other hand, it’s easy to fall into the trap of never being satisfied. It’s a fine line.
2. Money Can’t Be a Fixed Target
At each stage in a business, you have a new vision for where you want to be. It takes dollars to get there — mostly through hires. Once you reach that vision, however, you’ll be at a new stage with a new vision and a need for more capital. If your primary goal is to reach your vision, money can’t be a fixed target. It’s a means of reaching your vision.
3. Focus Should Be on Achieving Greatness
Suli Breaks, a spoken word artist, has a great poem entitled “Success vs. Greatness.” It says “Success is a platinum record. Greatness is Michael Jackson.” When you build a company, I believe you have to stay focused on greatness, not just success. You can’t take money with you, but the imprint you leave on the world might last for generations. Make as much as you need to complete that vision.
4. Money Is for Idea Investments
The purpose of making money is not to have stacks of cash lying around. It creates security. I wanted to buy an Audi R8, but I couldn’t swallow the payment. So what did I do? I started a business renting exotic cars. Now, that car is an asset of the business. Money’s purpose to me is just to invest in my ideas. I personally don’t mind if I take home more than $100,000 in a year.
5. Sustainability Trumps Numbers
I like to think big. I once decided that I wanted to build a billion-dollar business, but I was young and naive when I made that declaration. I think that when it comes down to it, enough money means not worrying about whether you can pay the rent or buy food and still be able to put together new projects and pay your team. Simplicity and sustainability are more important to me today.
6. Showing Appreciation Is Important
Building my companies would have been impossible without generous support from successful entrepreneurs. My mentors have been generous with both time and money. I’d like to get to the point where I know I never need to work again for financial reasons. I’d then focus on helping others start companies. I’d like to pay it forward. In short, it would be nice to make excess millions!
7. Team Rewards Come First
I do not have a personal goal for making money. I do, however, have a full team of people who need to live comfortable lives and be rewarded for their work. When we look at Modify’s financials on a monthly and yearly basis, the primary goal is about providing our team with proper compensation. The secondary goal is to grow our team and help increase the workforce in the United States.
8. Retirement Savings Are a Must
I want to make enough money to pay my monthly bills, save a comfortable amount for retirement and be able to travel when I want. I work hard in my business, and I feel as though these are respectable goals. Business owners should always keep retirement savings on their mind, especially without the benefit of an employer-based 401(k) program.
9. Benchmarks Must Be Met
From the very early stages of my journey, I set a target net worth of $18 million. It is a significant enough amount to set up a legacy for the rest of my life. When I get there, I’m not going to move the target. Instead, I have other benchmarks to meet in other areas of my life. Money is designed to be a tool, not an end. It isn’t a measure of true success; it is a prop on the journey.
10. Companies Need Cash Flow
I would like to make enough money that if I choose to do another venture, I would be able not to pay myself — or at least be the last to get paid. Salary, especially at an early stage, is such a waste of cash flow. And lack of cash flow can cripple a great idea before it has the chance to become a great company.
11. More Money Means New Projects
I don’t have a specific number in mind. The goal is to have enough to support my family, my employees and their families, and have some company savings for rainy days. Then ideally, there will be enough to fund new product developments. Personally, even if I had a billion dollars, I’d still show up to work because I like working.
12. Limits Don’t Exist
Typically, I will want to make enough so that I can use the profits to expand the firm to new locations as new opportunities present themselves. There is never an upper limit to the amount I want to make because I want to keep growing.
13. Numbers Fluctuate Over Time
Right now, the biggest focus is twofold: bring in enough revenue to pay our employees and contractors generously, and bring in enough to allow for a fun lifestyle of travel, safety and long-term retirement plans. Anything above that is just gravy, but it’s much appreciated!
14. Money Helps Me Keep Score
For me, money is more of a way to keep score and show that I’ve really accomplished something. Sure, more money is always useful, but I feel like I’m getting proof that people value what I’ve built with every dollar that comes into my company. You can’t put an exact number on success; you can only look to keep getting that validation.
15. A Million Dollars Isn’t Cool
Sean Parker, played by Justin Timberlake in the film “The Social Network,” said it best: “A million dollars isn’t cool. You know what’s cool? A billion dollars.”
16. Interest Earnings Are Important
When your investments are throwing off enough interest to cover a very nice lifestyle, it should be time to call it a day.
As for me? I believe that money is helpful in obtaining material things, and is even more helpful in changing the world. The money I make today is more than enough for my family and me. Any additional money I earn is only useful in as much as it allows us to accomplish our goals of creating a more likeable world. At the end of the day, as I just wrote for Inc Magazine, given the question, “Your money or your life?”, I’ll choose my life and family every single time.
Now it’s your turn. How much money do you think is enough? What’s toomuch? Too little? Do you want to be the richest person in the world? Or is a roof over your head and food on your table enough? Let me know yourthoughts on money in the Comments section below. And please do share this post with your network.