What makes your business so valuable? Is it eager customers willing to pay for what you offer? Or is it your unique service that sets you apart?
As Business Owners, we tend to think of our “value” as the answer to questions like these. But in our Cash Flow Cure program, we define business value through the lens of our business model, whether that’s a Profit Business or a Legacy Business. There’s no limit on the type of business you build. It’s just your approach to how you make money from that business that’s different.
A Profit Business is centered on making money and growing through increasing profits. A Legacy Business may also be focused on turning a profit, but with the Legacy model, we’re mainly focused on creating a self-sustaining venture. Legacy businesses can run the gamut, too, from websites that sell T-shirts to investment advisory groups.
Every business model fits into one of these two categories, without exception.
Once we truly understand the difference between the two, we’re ready to figure out not only where our business value lies but how to make sure our business is structured to achieve our core value proposition.
Finding your business value
In past articles, we’ve talked quite a bit about the difference between the two types, but let’s do a quick overview here. Whether you’re selling apparel or Internet consulting services, in a Profit Business, you—the business owner—are integral to the value of the business. Everything centers on YOU being present. The business loses value (or ceases to exist) without you. Therefore, the most valuable asset is your time.
Your goal in a Profit Business should be to keep your expenses low and your profits high. Engage in fewer non-productive activities. Tap into support systems that help you make better use of your time. When the day comes that you no longer want to work, or are able to work, the business will stop creating value. There’s an 80% chance your business will close its doors.
Meanwhile, when you have a Legacy Business, the value is that you have created an entity that can run without your presence. In other words, you are NOT integral to the value of the business.
As you’re building your Legacy Business, your aim is to become insignificant part of the everyday functions of the business. The best Legacy Business thrives and grows independent of your personal effort.
Embracing your value
Regardless of where the value lies in your business, you’re separating your personal and business worlds and working toward your Financial Freedom. In a Profit Business, allocate a regular amount each month to your Freedom Generator. That’s because you’re working toward Financial Freedom as you go along. But until you’ve met your goals, and reached a point where you don’t have to trade your time for money, you aren’t free.
If you’re building a Legacy business, your goal is to invest more up front in talent, so your business can run without you. If you’ve invested in the right resources, and hired the right mix of individuals , you’ll do less and less over time. And you’ll reap the benefits of Financial Freedom when you sell your business.
Either way, Financial Freedom is the long-term value proposition of each business model. So ask yourself, “Do I want a self-sustaining business model that has value in the marketplace indefinitely? Or do I want to build a successful business that grows, but requires my attention and input?”
image credit: Bigstock/Lichtmeister
Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.
Such important information and big ankering points in developing your business.