Inspired by family.
Empowered by numbers.

… Except instead of a hug, it will repay you in profits. Do you agree?

In most cultures around the world there is this unspoken practice. Parents invest time, effort and money in their children. The child repays them with hugs, kisses and good behaviour. When the time comes, the child goes on to live independently and that’s when parents know they’ve done a good job.

A business is not all too different to a child. It demands huge amounts of time, effort and money. At times it requires all your time and attention. And its success is measured in the business’ ability to stand on its own two feet; responsible and self-sustained. At the most it should only turn to its “parent” for remote advisory. Well, into adulthood, it should be able to survive completely on its own.

If we weren’t hardwired to love our children and for them to love us back, we may not resist the test of parenthood. But the look on your child’s face makes you forget all the hardship in a moment. It’s the ultimate reward for any parent. 

Similar to a child, the expression of reward from your business should come in the form of repayment; profits, salary, dividends. 

Yet it turns out that businesses leave parents heartbroken, with no reward in sight for the first 3 years of its life.

Worse, it’s expected and accepted. 

In the business world, there is an unwritten rule that entrepreneurs should not pay themselves a wage. It may have originated in the bubble of Silicon Valley, where a business takes 3 years to become profitable. 

What I like to ask my long-suffering business “parents” when I come across this idea is:

“So why are you in it? For the joy of long hours and hard work only?” 

And I ask this with a view that if there are no rewards in sight, one of two things (or sometimes even both) happen:

  • One day they will lose the motivation to give it their all. Overworking and underachieving doesn’t do great things for anyone’s morale.
  • They will be so desperately sunk in debt, chasing an idea that may never be profitable, that their personal financial security is at risk. 

I know the view of the tech entrepreneur is greatly idealised in the media. But the truth is not all business can get on the venture capitalist train and even fewer make it to destination. 

In the meantime, for the great majority I either like to challenge this unfounded perception that a business should not be profitable in its early stages.

A business can and should start off healthy, profit-making, and repay its owners as they go along. That is the secret to making your business grow sustainably, while you, the business owner, don’t lose your mind worrying every night how you’ll pay the bills.

So what you do think? Should your business repay you straight away, or should you wait a couple more years?