Many people dream of forging their own path as a business owner. But, sadly, too many are afraid to take that leap. Why? It takes a lot to start your own company — financially, emotionally, mentally.
Those who do make the leap to business ownership have something in common: they have embraced the mindset of a homeowner instead of being complacent as a renter.
Employee Mindset: The Renter
Employees are much like renters because they don't own the asset. Just as a renter trades their money for the right to occupy a home that they don't own, employees trade their time and skills for a paycheck. Because renters don't own their home, there are certain limitations to what they can do while in the home. Usually, no painting or renovations. Sometimes no pets.
Likewise, employees have specific boundaries — roles and responsibilities — within their organization. They are subject to the decisions of leadership and the conditions that affect the business.
However, in both cases, the renter and the employee enjoy the benefits without the responsibilities or risks that come with ownership. For example, employees have access tools, training programs, and other resources through their job to help them be successful.
Employees don't have to pay for those materials or maintain them on their own. They also aren't responsible for risk that the company takes on. In turn, renters aren't responsible for maintenance on the home or upgrading appliances. They don't have to pay for repairs to the sprinklers if they break.
But neither of these roles, renter and employee, have the opportunity to build or create equity or long-term value. Instead, they are focused on the short-term benefit. But in doing so, they are actually building equity for the home owner or company, respectively.
Business Owner Mindset: The Homeowner
On the other hand, business owners are much like homeowners. In the short-term, there is a heavy cost of buying a house just like with opening a business. With a home, you have closing costs, down payments, homeowners insurance, and monthly payments.
When you start a business, you need the capital to purchase equipment, rent an office space, pay employees, cover insurance, etc. That's not to mention the emotional or mental toll of starting your own business, which can be equally as difficult.
Homeowners are responsible for the maintenance and upkeep of their home. They do have to replace appliances as they break or make upgrades as needed. But they also have the freedom to tear down a wall or make other major renovations at will.
Business owners have the same responsibilities. They are responsible for hiring (and firing) employees and maintaining any applicable licensures. They oversee every aspect of the business form HR to marketing.
However, in the long-run, you are building an asset and you can enjoy the benefits of what you are creating. Homes typically appreciate and you can make changes to help increase the value. As a business grows, its value increases, and the owner can leverage this value to grow their wealth.
Business owners also own all of the tangible things that make up the business, like office chairs and decorations. They can sell the business for profit, take out a loan using the business as collateral, or expand the business using its generated profits. Plus, business ownership often comes with other perks, like tax breaks and flexible schedules.
Overall, being a business owner is like being a homeowner in the sense that it offers the opportunity to build equity, benefit from appreciation, and make a long-term investment in an asset. But not everyone sees business ownership like this.
Shifting Your Mindset
While it may seem oversimplified to view the roles of business owner and an employee like a homeowner and a renter, this analogy really does demonstrate the difference in mindset quite clearly. To become a business owner, you trade the stability of your salary and benefits for the opportunity to build a limitless asset. By focusing on the long-term benefits and potential for growth, the decision to own a business seems like an easy one.
But that's easier said than done. Here are some tips to help you shift your mindset if you are still thinking like an employee and want to have the mindset of a business owner.
- Focus on cash flow: Business owners focus is on generating cash flow, not just income. This means understanding revenue streams, managing expenses, and reinvesting profits to help grow your business.
- Learn business basics: Understanding the basics of finances, business plans, and marketing can help you develop the skills and knowledge you need to become a business owner.
- Take calculated risks: Employees are used to playing it safe. But business owners must take some calculated risks to grow their business. That means being willing to try new things and stepping outside your comfort zone.
- Build a support network: Find business owners who can mentor you and give you advice when you need it. This support network can be invaluable and help you navigate the difficulties of running a business.
If you are curious if franchising might be a good way for you to achieve your financial, reach out to our team today. We would love to share more with you about the benefits of becoming a home care franchise owner.