Archive for the ‘Wealth’ Category

You WANT This Lifestyle?

Wednesday, June 18th, 2008

Have you heard the term “lifestyle business?” I’ve heard this used a lot in the last few months.

At a conference, someone will ask how many have 2-10 employees, 11-20, 20 or more. Then, invariably, the speaker will say “Oh, how many have a lifestyle business? Nothing wrong with that.”

A lifestyle business is one designed to support the founder (or founders, if a couple) and generate enough money for that person (or couple) to live well, but never plan to “grow” in size.

Lifestyle businesses support the owner in a particular lifestyle and never plan to be 50- or 100-person companies, let alone mega global conglomerates.

So, it’s a nice fluffy term that gets used for people who are happy being one-person shops.

But the two are not the same. A Sole Proprietor or one-person shop is more likely to be struggling to get by than to be supporting a desired lifestyle.

Most of the one-person business owners I talk to fit a profile something like this:

- They work until 10 or 11 every night.

- They either work or are on call all weekend.

- They take client calls at home.

- They rarely take vacations.

- They can’t grow much because they’re afraid of what will happen when some thing goes wrong with more than one client at once.

- They don’t have time (or inclination) to take classes or tests for professional development.

- They want more money, but they are trading hours for dollars and there’s a limit to how much money they can make.

What kind of lifestyle is that? That’s the manic behavior of a 20-something that became a way of life. Now at 40-something or 50-something it’s hard work and getting harder to stay motivated.

If a sole proprietor makes, roughly, $100,000 profit in a year, that same S.P. should be buying a house and socking away at least $10,000 a year in savings.

This extremely simple formula (make your house payments, put money into investments) will invariably result in a high net worth and a comfortable retirement.

But when I talk to some people who are S.P.’s, they are barely getting by, spending every nickel they make, and doing nothing for their own future.

With luck, you’re in the first category and not the second.

But the next time you’re in a room full of business owners and the only category you fit into is “lifestyle business,” ask yourself if you’re leading the lifestyle you want.

And if you’re not, change it!

Silas Marner in the Workplace

Sunday, June 8th, 2008

If you haven’t read the book Silas Marner by George Eliot, check it out. It’s a good Summer read.

The title character is well known for sitting alone in his house, with the windows shuttered, and counting his gold. Night after night Silas Marner counted his gold.

When we read that part of the book, our mind naturally thinks about an old man hunched over his table, counting his money night after night. In fact, Silas doesn’t know that he has many years ahead of him.

As with any good novel, the book has intrigue, crime, emotions run amok, love, and redemption. Silas will lose his fortune, but have his soul reborn due to the love of an abandoned child.

When we employ the imagery of Silas Marner, it’s of someone who has become obsessed with counting their gold. They define success as wealth. And so they isolate themselves from others, afraid of getting too close, concerned that everyone is after their share of the money.

Unfortunately, we have modern equivalents to Silas in the business world today.

Some people, as they become successful in business, also become so obsessed with this distorted view of “wealth” that they close themselves off from their family, their friends, and (in the business world) their clients and employees. They look at their accomplishments and somehow conclude that they got their on their own.

When this happens, they begin to act as if they’re at the end of the story. That there’s nothing left to do but count their gold. But unless they’re on their deathbed, it’s not the end. If you achieve financial success at middle age, you have many years, and many adventures ahead.

In the real world, these folks begin alienating those who would be their friends. They treat every relationship and every interaction as if it were about money. Sometimes business is about money. But when business is only about money, it is very dissatisfying.

I’ve known people who became “successful” in this regard and who changed from being fun to being bitter and alienated. Their children don’t want to spend time with them; their employees can’t stand them and have zero loyalty; and their clients and vendors just seem to go somewhere else one at a time.

In the novel, Silas learns his lessons, re-joins the community, raises a child, and learns that love and human society are more important than gold. In the “real world” I’m afraid that doesn’t happen so much. In the real world, people tend to reinforce their view of the world as they interpret each new experience as reinforcing their old beliefs.

So, what can we do? First, we can try very hard not to let ourselves become like Silas. Success does not equal money. Money is not the measure of success.

Second, we can be a true friend and tell people when they’re heading down this road. That also means sticking in there when they go through a Silas Marner period in their lives. This is tougher than it sounds. Because that period can leave our friend very bitter and unpleasant to be around. We have to be careful not to get sucked into this view of the world.

Third, we can choose to back off. This is hard to do. And it doesn’t sound like being a friend, but if it’s clear that we can’t help, it is sometimes best to isolate ourselves from the negativity.

True success means finding the things that bring meaning and value into your life. It is highly unlikely that that will include surrounding yourself with bitter, angry people, or a pot of gold.

So, finally, the best you can do is to pray for your friend. Whatever other action you take, that’s the one thing that will do some good. And, with luck, they’ll learn to focus on the more positive things in life.

Over the years, in my business life, I’ve dropped a couple of Silas Marner clients. In the business world I can simply choose not to do business with them.

 It’s harder when a friend goes down that road.