Over the years I’ve had many a conversation with Business owners about their financial position.  I’ve always admired those whom have the bold vision to go out on their own.  This means taking upon their own shoulders the full financial burden of managing cashflow, paying staff, managing staff (which is a massive achievement in itself), keeping stock, occupational health and safety, sales, marketing and the list goes on and on.


What is most common to all of them is how they landed into business in the first place.  It’s often the idea of being able to forge ones’ own pathway and the sense of freedom which comes with that, rather than having to work for someone else.   Of course, freedom comes in many forms!

Won’t PASSION get me what I want?

What I have witnessed more often than not, is the total opposite of freedom.  The business is always at the front of their mind, getting time away is challenging, and the revenue generated very often goes back into the business with the owner often being the last one to get paid.  The problem here is that most business owners are not generally thinking about how to create extra income outside of their business.

Never was this so apparent than when I met Sue.  As part owner of a family business, Sue and her hubby had been hard at it for years.  What had started as passionate enthusiasm was now all but this, and they’d scrimped, saved and watched every penny along the way in order to keep the business trading.  With solid consistent effort they’d built the business to a level where they were now at least able to pull a reasonable wage out.  The stress of the business however, had taken its toll and the thought of working beyond the next 10 years was insurmountable so they were looking for their exit strategy.  The question they had was “Can they afford to retire from the business”

Show me the money!!!

Here’s where things start to get interesting.

Aside from their family home (which they still had a mortgage over) and a small super, they had no other assets other than the business.  Given their desired ‘retirement’ goals, the answer to their question was a resounding NO.  A response that totally blindsided them.  Sadly, this situation is not at all unusual.

Most business owners are not generally thinking about how to create extra income outside of their business.  And, they’re hamstrung with the view that every dollar they put back into the business is an investment for future dollars to be earned.  The problem is, they often also have the false belief that they’ll be able to sell that business for a mighty fine dollar which will be their pot of gold at the end of the rainbow.  What if it’s not?

Getting on track to building real wealth not just income.

So before you get too far down the track, here are 5 things you need to consider

  1. Ask yourself – do you really have a Business or are you really Self-employed? Knowing the difference is important as one creates passive income, one does not!
  2. Are you pulling an income out of your business? Or are you spinning on the spot with your cashflow going back in to keep the business afloat?
  3. If you are pulling an incomes from the business, are you using this to feed your personal expenses, or are you building other assets that can also generate income?
  4. Is your business really a saleable asset? History shows that most owners think their business is worth more than it actually is.  So a business may not be the holy grail to financial freedom that you think!
  5. Have you decided upon the time frame for which you are going to be using this business as an income stream, and have you a plan for where your next income will come from?

Life is meant to be fun!  Business is meant to be fun!  And FREEDOM comes in choice, time and money.  Knowing how to generate your financial freedom is the portal to freedom in choice and time.

So, whether you want $50k, $150K or $550k to live on each year, start by getting clear on how you are going to fund this without the business behind you.