Tag Archive for 'small business ownership'

Be a professional business owner, not an amateur

Professionals are people who can do their job even when they don’t feel like it.  Amateurs are people who can’t do their job even when they do feel like it.

I like this anonymous quote because it helps me ask this question: What kind of owner are you: a professional or an amateur?

If your driving motivation to be a small business owner is status and control, you’re probably never going to be a professional.

But if you love what you do so much that you don’t want to be anywhere else but in your business, you’ll probably become a professional. You’ll become the kind of owner who shows up even when you don’t feel like it. When the chips are down. When the challenges are so great that they would crush the spirit of a lesser person.

Professional business owners know they own more than just what’s on the balance sheet - they also own their business’s challenges. And when they turn one of those challenges into an opportunity, they know that also belongs to them, which is exciting.

Amateur don’t want the work, they just want the result. Professionals love the entire process, alpha to omega, warts and all.

If you’re going to be in business, you must be in your business.

Professionals know this. Amateurs don’t.

Video: When buying a business, consider these business principles

In this weeks video I list a few points to consider before owning your small business.

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It’s good to be a business owner

The military has produced many acronyms, one of which is RHIP, which stands for, “Rank Has Its Privileges.”

RHIP is the unofficial way to point out when a person accrues some benefit by virtue of their position. Mel Brooks’ character said it another way in his comedy “History of the World” with, “It’s good to be the king.”

In that spirit, here’s a new acronym for small business owners: OHIP, which standsfor “Ownership Has Its Privileges.” Let’s look – sometimes with tongue-in-cheek – at a few business ownership privileges.

By virtue of being the owner, you have the privilege of working all you want. That means you’ve earned the right to work half-days. And as an added bonus, you get to choose which 12 of the 24.

If you so choose, you can brand the company with your name, which can be pretty rich ego food. But it also helps a plaintiff’s attorney – the one who represents the customer who “slipped and fell” in your business – to identify at least two of the co-defendants in the lawsuit: the legal entity and its founder.

When getting a bank loan, almost all small business owners are afforded the high honor of signing their name twice on loan documents. Having perfected the belt-and-suspenders approach, banks provide you with this special moment to acquire not only the business assets as loan collateral, but also your personal estate as a double guarantee.

But seriously folks, as Mel Brooks might say, here are a few real ownership privileges.

Structure your small business as a Sub Chapter S Corporation (S Corp) or a Limited Liability Company (LLC), both non-tax-paying entities, and accrue the benefit of having business income or losses pass through to shareholders or members, respectively. These two legal entities are handy because personal tax rates are typically lower than corporate rates, plus you avoid double taxation of dividends. Additionally, S Corps and LLCs allow owners the privilege of sheltering personal assets from liabilities that may befall the business.

Finally, there is something I call the stealth benefit of business ownership: owning the real estate your business operates in and leases from you.

For example: John Jones owns the property at 21 Enterprise Blvd. and leases it to John Jones, Inc. John receives rental income, tax advantages and asset appreciation. Plus, as long as it can be justified, John can raise the rent instead of giving himself a pay raise because, as passive income, it avoids payroll tax.

So are you taking advantage of all of the “privileges” of business ownership?

It’s good to be the owner.

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Be sure to listen to my segment below from The Small Business Advocate Show. I talk in more detail about “OHIP” and how it effects small businesses.

OHIP: Ownership has its privileges

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The two faces of small business ownership

You’re living your entrepreneurial dream, following your vision, and road testing your plan. You’ve carved something out of the marketplace that wasn’t there before. Congratulations. But you haven’t yet reached the point where you KNOW that all of your effort and sacrifice will have been worth it. Your business is young and, truth is, the jury is still out on whether you will survive.

You’re in the bi-polar stage of small business ownership: One minute you’re awash in passion, intensity and the conviction that what you are doing is near genius. The next minute you’re telling yourself that you must be out of your mind to take such risks. The two faces of small business ownership - passion and panic.

So here we are in the recession of 2009 and you’re filled with the most anguishing emotion in the marketplace; the one felt by entrepreneurs when faced with the possibility of failure. “How far do I go? How far CAN I go? How will I know if I have to… NO… I refuse to think about that!”

No one can answer these questions for you, but here are some words of resolve that I want to leave with you, from an anonymous thinker who had obviously been there and done that:

“The wayside of business is littered with the remains of those who started with a spurt, but lacked the stamina to finish. Their places were taken by those unshowy plodders who never knew when to quit.”

Welcome to the world of small business ownership. It’s not for sissies and if it were easy, monkeys would be doing it. The only thing I can promise you is that you will never have to worry about is nodding off in the middle of the day.




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