One of the many breakout sessions I attended was focused on finances and led by Octavia Conner, virtual CFO and founder of Say Yes To Profits and she challenged us with the question, "Are you a CEO or are you an entrepreneur?"
Are you a CEO or are you an entrepreneur?
An entrepreneur takes some measure of risk and looks to grow their business, first, and get profits second. Often they want to sell it.
I'm an entrepreneur and have started four companies and sold two of them.
As a CEO, Octavia explained, you must focus on the numbers - the profitability of your business is what matters. You must set aside money to pay yourself, pay your taxes and more.
As a CEO, sure you want to grow your business, and financial discipline is critical.
Octavia's challenge got me thinking. I need to be MORE CEO than entrepreneur.
Another tip Octavia gave us is that we can often find profit in our business by reducing our expenses. She said every expense should be a YES (I need it), NO (I don't need it) or I can get this service/product for less.
Using debt to launch a company (or big project) might not be the best way to invest my money (or my time). At one point do you focus on increasing your profits and paying yourself more?
Mike Michalowicz book, Profit First, echoes this principle of taking your income and immediately splitting it into core buckets of money - your income account, operating account, tax account (savings) and profit account (savings). I've started doing this and found that when I put "profit" first, instead of expenses my business is financially more sound.
Most of you reading this are not "entrepreneurs", in the sense of risking your capital to make a business much larger than yourself.
Most of you reading this are main street small business owners - you're running your business to provide for your family.
For us main street small business owners, or life-style businesses as some might call us, the principles of profit first are essential.
So what are you? CEO or entrepreneur?