The Correct View When Building Wealth With A Business

High inflation,

Even high inflation, is not necessarily detrimental to a business. High inflation simply means there’s an increase in the price of goods and services, and that’s precisely what a business sells. Although business expenses rise due to inflation, the income should also increase in line with inflation.

If the inflation rate is 10% per annum, then business profits should automatically increase by 10% p.a. This increase is irrespective of any growth experienced by the business from a greater demand for its goods and services. Hence, it’s clear that a business can be used to protect yourself against inflation. For example, compare a bank investment with an investment in a good business.

The income (interest) on the bank investment will more or less stay the same from year to year. However, the purchasing power of the capital, which is invested, will decrease every year due to inflation. However, an investment in a business is different. The profit in a well-managed business will increase annually and keep up with inflation. The value of the business will also grow automatically, since the value of a business is based on its profits

What is the effect of inflation in your business

The conclusion is that inflation is not the enemy of an investment in a business, but rather a strong motivation to make this investment. A business hedges the income, and the capital value of the investment made in it, against the destructive effect of inflation.

The next aspect that a business should be measured against is the consequences of a recession. If economic growth is negative, but inflation exists (as was the case in 2009), then a business could still experience growth. So, even if there’s no economic growth, a good business can still grow in line with inflation.

The secret of well – managed business

Well-managed businesses could experience growth even though the average economic growth rate is negative. No matter how bad things are, there’ll always be certain businesses that grow rapidly due to an increased demand for their products and services. Remember, that the global population, and the middle class in particular, is increasing and these people must satisfy their needs.

For this reason, businesses that sell food, for instance, should experience positive growth, even in a recession. The same applies to other goods and services that are always in demand.

The conclusion is that your own business can still record real growth despite recessions and high inflation. It should now be clear from the discussion above that a business, chosen according to sound business principles, can be instrumental in building wealth.

People who fear short-term fluctuations in their investments will get poorer over the long-term. Inflation will destroy their investments! However, if you take a long-term view with your investments in listed shares and your own business, then you could build wealth in any kind of economy. All of these investments could benefit from inflation, survive recessions and convert poor returns into exceptional growth.

Do You “Love” Your Small or Home Business?

How to Fall in Love with Your Business

Regardless of the passion you may have for your business, there is always a chance that, at any point, you may fall out of love with the work you are doing. This is easy to do when you are stuck inside, at your computer, working and all of your friends and family members are enjoying summer vacations and trips. At one point or another, even the most successful entrepreneurs have lost momentum in their business and feel as though they have hit a rut. Even with this small setback, it is important to get back into the swing of things and fall back in love with your business in order to see continued success.

Remind Yourself of Why You Started this Business

Entrepreneurs often begin a business surrounding something that they enjoy or that they are passionate about – animal lovers open pet store or grooming business, bikers open bicycle shops, and bakers open bakeries. Even though this was the spark that started the business, it can often become lost in the day-to-day operations that a business owner must do in order to keep the business running. A simple way to fall back in love with your business and your work is to remind yourself why you started this business in the first place – getting back in touch with your roots can often lead to a renewed sense of passion.

Emulate Those You Look Up To

Successful business owners often have role models in their lives that they wish to emulate and that they look up to. When you are feeling as though you don’t love your business anymore, or you have lost your passion, you may want to ask yourself what your role model or role models would do in your situation. Would they roll over and let the business fade away? Or would they take a moment to connect with their passion for working and refocus their energy on making the business even better? The answer is usually the latter and working to emulate your role models can help to re-spark your interest.

Evaluate Your Personal Goals

Often times, business owners are motivated not by their business goals but their personal goals. If you are feeling a loss of passion for your work, chances are you have lost touch of your personal goals and it may be time to sit down, evaluate, and restructure what you personally strive for by owning a business. When evaluating your goals, keep the “Four Cs” in mind – control, creativity, challenge, and cash. These four aspects can easily sum up the personal goals that many successful business owners strive for in their personal lives that help to keep their passion alive and keep them successful in business.

Not every business owner is passionate about their business all of the time. At one point or another, every entrepreneur has thought to themselves “Why I am doing this?” If you have hit that point in your business career, using the tips above can help you rediscover your passion and fall madly in love with your business all over again.

Has Your Business Outgrown You?

Have you gotten away from the things that made you start your own business to begin with?

Every business goes through cycles and the cycles for a business in which a founder is also the CEO are specific ones. The founder of a business often has a specific skill set that propels him to start his own business. This can be an idea, an invention or a particular passion. As the business grows, quite often the founder / owner assumes the CEO role. This role however might be outside of the original skill set of the founder or even outside his interests. So how do you deal with that?

Last week I spoke with a friend of mine that is CEO of a business in which the owner is also active but not as CEO. The owner is the founder of the business and the driver behind some of the technical developments in their products which help grow the business. He is also the biggest hindrance to the growth of the company. Rather than just working on his passion for developing products, he also constantly interferes with decisions the CEO makes. This is highly disruptive in the organization and extremely demotivating to the CEO. The whole organization knows that if you want something and the CEO is against it, you can always check with the owner to see if you can get it from him anyway. The owner often changes decisions and directions without informing the CEO. Needless to say, the CEO is looking for other employment. When this CEO leaves, the owner will have to either hire another one or assume the role himself. God help that company.

So how can a private company be run with the owner not acting as the CEO? What structure or agreement will allow the company to prosper? The cornerstones are trust and acceptance. The owner needs to trust the CEO, accept his own limitations and accept that he is not the business. Trust that the CEO will run the business properly and has a better point of view. Accepting ones limitations is scary and liberating all at once but absolutely necessary. The owner has to see that he is great at certain things that are his passion and of vital importance to the business but acting as CEO is not one of them. Total acceptance of this is key. Only then can the CEO do his job properly without constant interference and second guessing by the owner. Only then can the business truly prosper and grow. The owner also need to understand that he is not the business and stop identifying with the business as if it was an extension of himself.

Do you own your own business? Are you the CEO? Are you enjoying it or are you wanting to get back to what you are passionate about to begin with? Let go of the reigns, completely. Hire a good CEO that is passionate about running and growing your business and will let you do what you are passionate about. This will make an unstoppable team. This is the formula for success and isn’t that what you want for your company? You’ll be amazed at what can be achieved.

With your success in mind,