As we reflect on the 4th of July celebration, a common word that comes to mind is FREEDOM. We are grateful for our freedom, but we often take it for granted. Owning and growing your own business is one such freedom that is often overlooked. Even more so, making money in our business is a freedom that should be celebrated.
Most entrepreneurs set out with grand ideas of a business they want to build or maybe more specifically a product or service they want to provide to the marketplace. Fortunately, in the United States of America, the barriers to start a business are very limited. Sure, you might need a business license to operate in certain areas, and you probably need to collect taxes for the government on the sales that you make; but for the most part, if you what to provide a product or service to the marketplace, you can. Even some products that have been regulated by the government in the past, for example telecommunications, are now readily traded in commerce. The business environment is ripe and ready for new businesses to start. In fact, there are roughly 550,000 new businesses that start in the USA each month. The ability to own a business and compete in the marketplace, which is commonly referred to as free enterprise, is truly a freedom to enjoy.
A common phrase used in 4th of July celebrations is “Freedom is Not Free.” The same is true in business: growing your business is not free, but thankfully it is possible. Growing your business is as important as starting the business. If you are unable to produce enough product or service for the appetite of the market, you have the freedom to add resources to your business to assist in growing the business. You don’t need to ask the government or other entities outside of the business if you can hire more people, purchase new equipment, or find innovative ways to increase productivity. Generally the biggest constraint to growing a business is having enough capital, so business growth is limited primarily by the business owner’s ability to manage profits and cash flow well. Wise business owners will plan profits and cash flow or seek advice on how to plan them. Well planned profits, cash flow, and capital structure will facilitate successful business growth and provide you with the freedom to make the decisions necessary to build the business to your next level.
Watching fireworks may be one of the most exciting aspects of 4th of July celebrations. Making money in a business should be one of the most exciting aspects of owning and growing a business.
As a business owner, are you eagerly preparing the financial statements each month to determine how much profit was left over? Many business owners stress over the financials, hoping that they made a profit and will have enough cash to survive the next payroll. The reality is that making money is a freedom that is granted to businesses and should be celebrated. The government and other external entities do not dictate how much money a business can make, although the government will ask for a portion of that money in taxes. It is a freedom, and, for that matter, a responsibility of each business to make whatever level of money they desire. Generally the marketplace will have some influence on how much you can charge, or how much product or service it will consume, but you are free to maximize the amount of money your business will make. Wise and successful business owners pay close attention to their Price/Cost/Margin/Profitability structure. They understand when to make money and when to spend money. They will exercise their freedom wisely to ensure the business is making as much money as possible and providing the greatest benefit possible to the marketplace.
As you reflect on the 4th of July celebration this week, be thankful for the freedom you have to own a business. We live in a business environment that is ripe and ready for your business. Remember, just as freedom is not free, growing your business is not free either. Take the time to plan your business profits, cash flow, and capital structure. And above all else, celebrate your freedom to make as much money as you desire!
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