Why Entrepreneurs Need to Talk About Money More
Why are you in business?
Most entrepreneurs can answer this question in several ways.
They’re dedicated to the company’s mission (which an owner MUST truly believe in).
They love building a team, creating jobs, and supporting th economy.
And…they’re motivated by money.
Even the most philanthropic among us know the power of generating dollars. The Gates Foundation couldn’t exist without Microsoft’s success. Chouinard’s donation of Patagonia wouldn’t mean much if the company wasn’t worth $3 billion.
But despite our collective interest in making money, we collectively insist on not talking about it.
I’d like to change that.
Want to open up your eyes? Ask the CEO next to you how much money they make.
Why? Benchmarking. If you’re trying to make $5M a year, you want to know if the person sitting next to you is pulling in $1M or $10M.
And if they’re pulling in $10M…how did they do that?
I have these kinds of conversations all the time, personally and professionally.
I’ve learned how other people pay for college without feeling squeezed. And I’ve learned how they got rid of their mortgage payment, too.
I may not be willing to make the same choices and tradeoffs, but at least I know what options are available. And that’s so much better than being left in the dark, wondering or feeling inadequate.
Because here’s the thing: you can never effectively judge how you THINK someone is doing from the outside. If social media has taught us anything, it’s that anyone can present a perfect picture of their lives.
Instead, you want to know things like:
- What’s your revenue?
- What’s your growth rate?
- What are your gross margins? Net margins?
- How much does the CEO actually pay themselves?
- And how did they get there?
Call me callous and capitalist. But the dollars don’t lie.
And the information gives you the power to do things differently.
So next time you find yourself in a group of entrepreneurs, or engaged in conversation with a neighbor or good friend, consider asking a few of these questions.
Lead with vulnerability, never a desire to compete.
You’ll be surprised how much you can learn.
There are all kinds of things you should be benchmarking inside your business. If you’d like some input to guide your company’s performance, our consulting team can help. Connect with us today.