Students in my Leadership class often ask if business is — or should be — all about making money. My response has always been an emphatic “of course not!” If you’ve read any of my other posts, you’ll know I believe strongly in passion and purpose. My coffee shop was definitely fueled by a love for what I do and is also a cause-driven enterprise, BUT this question has been nagging at me and I’m not going to beat around the bush.
The straight answer
The straight answer is YES, it’s all about making money, or it should be!
Now hear me out before you decide that I’m just a selfish, greedy capitalist pig 🐷
There is definitely still an undertone in our society that making money is baaadd. We root for the underdog until they start to do too well and they’re no longer the underdog. No doubt many folks have had an unhealthy relationship with money since childhood, but it’s also easy to develop an underlying mistrust by observing those with money abuse the privileges and freedoms that come along with it.
As an entrepreneur, here’s what you need to know…
Put on your own mask first
There’s a parallel between owning a business and the sage advice on airlines to put on your own mask first. It stands to reason that if you don’t survive, you can’t do good by anyone else… and so it goes with business.
In my industry, there are a lot of good-hearted and well-meaning folks who want to “give back” even though they are just starting out. This honestly pains me! I just want to shout out “You haven’t made any money yet, you’re in debt, and you probably are wondering how you’re even going to pay your employees.” 🤦🏻♀️ Priorities, people!!
It’s great to want to do good and even build it into your business model, but first, be a good steward of your company and generate enough revenue to sustain. Without revenue and profit, at best you have an expensive hobby on your hands.
But what about passion and purpose?
We’ve been sold a bill of goods that passion and purpose rule the day. We think we should all get to do what we love without worrying about money. I definitely understand! Everyone wants to do their own thing especially now that entrepreneurship is trendy, but that line of thinking is entitled and misguided.
Unfortunately, these attitudes seem to be prevalent in younger people who may not even have a grip on adulting and haven’t yet realized that passion and purpose alone won’t pay the bills.
If you’re someone that’s just aching to break out on your own in business, here’s my advice:
- DON’T be too eager to take on debt
Whether you take money from investors, family (definitely not recommended!), or are able to convince the bank that your startup deserves financing, you really don’t own it yet. Investors can pull out and decide they don’t want to fund you if they get cold feet on your concept. This very thing recently happened to a coffee colleague, and it’s painful!
Family money often brings with it all kinds of strings attached and baggage that could ultimately endanger your business. Loans have their place but as an owner, you should have a major stake in the game.
Try thinking more long-term! Either start small or start saving; preferably both.
- Make it a side gig
Anything worth doing is worth easing into if that’s a possibility. The benefit of starting super small and working it on the side is that you can gain expertise and build some capital for the business. Our friends at Gooseneck Coffee started this way, working day jobs and building a coffee business on the side at farmer’s markets.
- Bootstrap it, baby!
I remember researching that a full-blown retail coffee shop could require upwards of a $250K investment. Although I had been saving, I didn’t have that kind of money lying around! So I carefully priced, shopped, re-purposed, and negotiated — meticulously listing everything including the smallest of smallwares on a spreadsheet — because part of making money is not spending excessively! 💡
Between frugal planning, sweat equity, and a bit of patience, your dream will eventually take flight.
Make a difference
One of the main benefits of owning a business (versus a non-profit) is the freedom to decide. You can earn and spend as you see fit, which means you can determine your financial position, create jobs, and also choose social responsibility. So if you want to make a difference in your life and the world around you, start a business!
Just remember it’s all about the money, honey — and that’s okay! By making lots and lots of it, you’ll earn a decent living, be able to pay your employees well, and your business will be around for the long haul.