01. The Two Owner Mindsets

As a business owner, the most important question you should ask yourself every morning is:

Q: “Why do I do what I do”?

A: “I am a business owner focused on Income/Value Creation (pick one).”

Those are the only two possible answers for why you would focus one ounce of energy on your business each and every day!

We assume your business has been around for a while, is profitable and able to continue operating for the foreseeable future, barring a major external shock. If you aren’t profitable today. Get there within 90 days, or you won’t be around long anyway.

For the rest of you that run profitable businesses and have managed to navigate the daily thrills and spills of running a private company, congratulations, you have the privilege of answering this question “ev-e-ry day”.

So, what do we mean by Income or Value Creator owners? Quite simply, Income Owners primarily want cash flow to fund their lifestyle, today and for the future.

These owners run their business by the seat of their pants, with little to no real planning. They have their personal identity tied to the business. They control every decision, design every process and hold the relationships with key customers or business partners.

All of this results in a (seemingly) lower risk business with (hopefully) moderate success. These owners use their excess income to put into savings or investments outside of their own company. That’s how little they worth they place on their business. They won’t even invest their own money back into it; they would rather invest it somewhere else.

To be fair, most business owners start their business with a focus on income. I mean, we all need a roof over our heads and food on the table. The only way to do that is to have money coming in. In the end, Income Owners will have to close their company because there is no value, since the business was so dependent on the owner.

Value Creators, on the other hand, are more astute and strategic business owners who have managed to last more than 5 years and can consistently generate at least a couple of million a year in profits. These owners understand the basics of building equity value in their company that can be sold at some point in the future. They realize the possibility of creating real wealth.

If you are, or want to be, a Value Creator, you most likely have clear business and personal goals. Your business isn’t dependent solely on you. You want independence for yourself, your family and your employees. You believe the intangible assets you are creating in your business are valuable.

Most importantly, you know that in order to prove your bona fides as a true Value Creator, at some point, you are going to have to unlock that wealth. It’s that simple. Value Creators are able to generate a total net that is multiple times higher than that of Income owners.

The next article will go more in-depth on the Value Creator mindset and how to achieve your business and personal value creation goals.