You Inc. - Treating Yourself Like a Business

Thinking about what you would like to do is all very well, but the question that comes out immediately after those thoughts (or sometimes simultaneously!) is, "Yeah, great, but how would I afford it?!"  It's a good question.

This is a huge topic and financing the dream is something there will be a lot of discussion about (how to get out of debt, becoming financially free, homebased businesses, creating an income that allows you to live out your dreams, etc., etc., etc.), but there are some fundamental mindshift things that can make the journey much easier.  The one I am particularly thinking about is the shift in your mindset from employee to business owner.

Whether or not you run an actual company, you are running a business.  There are sales of your time to an employer, there is payment for sales or income in the form of salary paid for your time, there are expenses which are both fixed and variable.  You make strategic decisions about what you will do with your 'business' in job choice, salary negotiations, business development (development of your skills / knowledge).  You have growth in expenses and leakage or wasted cost (in terms of the spending choice you make and fritter away).  Sounds like a regular business, doesn't it?

So put on your CEO hat for a while and think about where you're taking this business?  Do you have an operating plan, a direction for where you will take your company (You Inc.)?  Do you have targets?  Are you aware of 'business opportunities' when you encounter them or do they simply slip by?

Then put on your CFO or Finance Officer's hat for a bit.  Do you have tight financial controls or are costs leaking all over the place?  (We did a run through of automatic withdrawals / direct debits from our checking / current accounts before this trip and were amazed to find some things that we no longer wanted or needed which were still coming out of our account - online services are worth keeping an eye on here.)  If it is your business (and it is), doesn't it deserve the same rigor and attention to spending that would be taken on an Inc. or a Ltd. company?  

Because we worked in / ran big organisations, we spent quite a bit of time on income, expenses, budgets and return on investments for those businesses.  It made a lot of sense and seemed natural to apply that approach to Us Inc. in our personal lives.  Steve keeps a running balance sheet in his head which he periodically compares to a real balance spreadsheet and the bank accounts so there's a check to validate what we estimate with reality.  We look at what we have for assets, can we get a better interest rate, where are costs leaking, where can we get a better price, and what return on investment do those assets provide?  Are there any ways to get a better return on investment?  

We think about these things at least annually when doing our 'strategic plan', but usually more frequently than that.  Treating us like Us Inc. means that we focus on income, expenditure, and ROI in a way we never would if we merely considered ourselves as employees.  If you were running a business, wouldn't you focus on those things?  Well, you are...