You are a business.
Let me repeat that.
You are a business.
"Wait a second," you interrupt. "I'm not incorporated and my name isn't Google!"
When you really think about it, a business is really just a cash flow operation. Cash comes in (hopefully) in the form of revenue and cash goes out in the form of expenses. What's left is net profit.
So how does that make you a business?
Here are 5 things that make you a business:
#1 - You Generate Revenue
One of the hard things about life is that eventually we have to grow up and get a J-O-B. Your job provides you a steady stream of money that allows you to exist. Without a paycheck, things begin to deteriorate.
The same holds true with a business. A business must earn enough revenue to survive. If no one wants its product or service, there is no revenue. If there is no revenue, a business goes bankrupt and ceases to exist.
#2 - You Have Expenses
Mortgage, rent, utilities, food, electricity, cable, cell phone, water, doughnut runs. The list of your expenses go on-and-on. Some are critical (mortgage/rent, food, etc.) and others are discretionary (doughnut runs), but all require revenue in order to pay them.
For a business, many expenses are the same. Rent, electricity, phones, computers, insurance, travel, providing lunches to employees (yah, right). If the company doesn't sell enough widgets, it won't be able to pay its expenses and there won't be a business.
#3 - You Should Be Properly Insured
Nothing can deride You, Inc. faster than not being adequately insured. Try visiting a hospital without health insurance and you'll be shocked at the sticker price. If you are injured for a period of time and don't have disability insurance, your paycheck goes away and it becomes difficult to meet your expenses. If you let your homeowners' insurance lapse and a hurricane knocks your house down, you still have the pay your mortgage and find another place to live.
A business needs the same types of insurance. There is the possibility of business interruption due to a catastrophe (think disability insurance), loss of company property due to fire or water (think homeowners'), and health concerns about employees (business-funded health insurance). Often times a business with take out life insurance on executives as well.
Insurance is about the transference of and/or limiting risk, and both you and a business have this in common.
#4 - You Must Develop & Stick To A Budget
Let's face it, most Americans struggle with money management. Ineffective money management leads to credit card debt, divorces, stress, and in some cases, bankruptcy. To combat this, it is imperative that you have a realistic budget that details the amount of money coming into your household along with the money going out. If the money going out is greater than the money coming in, you are headed for financial ruin. It's that simple.
A business must also have a budget to survive. The budget process is typically a big deal and occurs at the end of the year (for the next fiscal year). Revenues are estimated and potential expenses analyzed. Once the budget is adopted, department heads are held accountable when overruns occur.
If you want a cautionary example of budgetary failure, look no further than the federal government. They have been spending more than they take in for years and the national debt (currently $16 trillion and counting!) represents the accumulation of this deficit.
#5 - You Must Market Yourself
I know what you're thinking: "I don't market myself, what the heck are talking about?" I disagree. From the moment you start grade school until you graduate from college, you are building your skill set. Your skill set is exactly what you are marketing when you apply for a job or convince a bank to give you money to start a business. When you apply for a job, they ask to see your resume (a.k.a. marketing material). The decision to grant you an interview begins with an assessment of your skills and matching them to the requirements of the job. If you are lucky enough to get an interview, you wear your best suit and shoes because you want to make a good impression. If your marketing is successful, you get the job and start earning revenue. You've probably been marketing yourself without even realizing it!
A business with the greatest product in the world will still fail if it doesn't engage in marketing. A potential customer has to know that a product exists before they make a decision to buy it. In order to engage in effective marketing, a business must define their target customers and find ways to communicate and educate them about their product.
So there you have it, the 5 things that make you a business. If you begin to think of yourself and career in terms of revenue, expenses, insurance, budgeting and marketing, it will give you an entirely different perspective and greater clarity on where you are headed.