About 400 people raised their hands.
Then I said, "How many of you started or want to start a business in order to get rich? Not rich in spirit or non-material ways, but rich rich?"
Almost every hand stayed up, and many cheered. (If the audience had been holding lighters or cell phones I would have felt like a scrawnier, less charismatic, less socially-conscious Bono.)
Nearly everyone in the audience hoped to follow their passion, live out a dream, do what they love, and get rich. You probably do, too.
When you start a business you have two basic options:
- Option 1: Start a business to hopefully do a lot less of what you don't like and a lot more of what you love.
- Option 2: Start a business that will (hopefully) generate significant income.
Why? Part of the problem is stems from Outliers syndrome. Not the part where Malcolm Gladwell says 10,000 hours are required to master a skill, but the part where we all secretly think we can be Outliers.
While we are all special in our own way (well, I'm not), most of us will never be Outliers. And that's okay. Outliers are people who operate at the extreme edge of possibility. For the rest of us, success in any venture is likely to be similar to what others experience:
- If you're a chef and open a 40-table restaurant, the extent of your success will always be capped by the number of meals you can serve and the prices you can charge (among other basic factors). Best case you can only make so much money.
- If you're a consultant, the same is true. Your income will be capped, roughly speaking, by the price the market will bear and the number of clients you can serve. You can only make so much.
The premise is simple:
Will I enjoy the satisfaction of my business (or career) enough that I will be happy with the income I can realistically expect to earn?
Here's an example. Say you love landscaping and want to open a landscaping business -- and you want to make $500,000 a year. According to Payscale.com, an owner/operator of a landscaping business can expect to make between $30k and $85k a year.
Pretty good, but well short of $500k. To get to that level you'll at the very least need multiple locations in multiple markets. Personally you'll be able to do a lot less landscape design and implementation (if any) since you will have to focus on running the business.
So, you have a choice: Make less than you hope and do more of what you like, or make what you hope and do less of what you like. Unless you're an Outlier, you can't have it both ways.
Why don't entrepreneurs do the satisfaction math? Mostly because our hopes and dreams get in the way. Even if we do think about the financial realities, we secretly hope we will an Outlier.
Which is too bad, because you don't have to be an Outlier to get rich. What you do have to be is a person who expects to do less of what they love as their business grows: Managing, selling, organizing, expanding -- running the business instead of working the business.
To follow your passions and dreams, choose Option 1. But do the satisfaction math and make sure you will be content with the income potential, otherwise you may eventually grow to resent what you once loved to do. Determine the point where doing what you love and earning what you want intersects. Then live your dream.
To be rich, choose Option 2. Set your income target and build, grow, and run your business empire. And live your dream.
Want to choose both? Go ahead: Just make sure you do the satisfaction math and determine where income and enjoyment/satisfaction balances out.
Which choice is the right choice? The only right choice is the best choice for you.
Photo courtesy flickr user yachtfan, CC 2.0