As a business coach, one of the commonalities I see with 99% of business owners I meet is this: In the beginning they have a great idea, passion and drive. In the end, they have created a job with three times the stress of an employee. They have serious business stress.
So what goes wrong? How can such passion, focus and drive end in stress, desperation and long hours?
Quite simply, people design their business with great enthusiasm and ideals but forget to actually plan how that business will create their Personal Financial Freedom.
They don’t plan for the business’s evolution and only put superficial thought into the potential value and their exit strategy.
Stop business stress
When I take on a new client, one of the first things I work on is removing all personal Money Stress.
Most of my clients respond to this with, “ I thought we were working on my business?”
You’re right! We are.
To ensure the greatest success for your business, you need to separate your personal finances from your business finances. This requires making some changes to both.
Personal Financial Freedom is not having to exchange your time for money. When you have Personal Financial Freedom, you have enough money coming in from investments that you no longer have to trade time and effort for money.
The concept of Freedom
The fastest way to get there is to understand one powerful concept: Freedom lies OUTSIDE your business.
If you rely on your business to fund your lifestyle, you have a problem. Because if the business catches a cold, the family suffers pneumonia.
Creating Freedom outside of your business
To set your business up for success, you must create Freedom outside your business. And to do that, you need to understand the key metrics that must be met.
Today we’ll be exploring your Baseline Lifestyle Number. This is the amount you need to live your life “comfortably uncomfortable”.
Your business needs to pay you this Baseline Lifestyle Number as a salary. You’ll use it to cover personal expenses, set up the right account structure, automate your cash flow and Pay Yourself First to build your personal Financial Freedom.
Once you’ve done this, your money stress is gone. You can start designing your future.
Moving on to your Freedom Number
Now you can work toward figuring out what you need today and how much you’ll need tomorrow. This is your Freedom Number, and it equals how much you need personally plus how much it costs to run your business.
Again, your business isn’t the end game. But this is the concept that trips most people up. The day-to-day struggle of balancing the books and maintaining a semblance of a home life leave little time for thought or action.
Your business is more often than not a vehicle to achieve true freedom and contribute to the world in a meaningful way that aligns with your passion and purpose.
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