Money and profit are both important factors in business, but they are not the same thing. While money is essential to running a business, profit is what allows a business to grow and thrive in the long term.
(Money is a medium of exchange that can be used to purchase goods and services. Profit is the difference between revenue and expenses)
It’s important to remember that motivation is not a one-size-fits-all concept. What motivates one person may not motivate another. Some people may be motivated by financial incentives, while others may be driven by a sense of purpose or the desire to make a positive impact on their community.
👉The key to success is finding the right balance between making money and generating profits. While money can provide short-term benefits, focusing solely on financial gain can lead to short-sighted decision-making and may ultimately undermine long-term success. Profit, on the other hand, allows a business to reinvest in itself and grow over time.
How do you find out which one motivates you?
To find out if money or profit motivates you in business, you can start by asking yourself a few questions:
- What is your primary goal in business? Is it to make as much money as possible? Is it to build a sustainable business that generates consistent profits over time?
- How do you measure success in your business? Do you focus on revenue and income or on profitability and growth?
- What drives you to work hard and make difficult decisions in your business? Is it the potential for financial gain? Is it the desire to build a successful and sustainable business that makes a positive impact?
- How do you make decisions about investments and expenses in your business? Do you prioritise short-term financial gain or long-term profitability?
- How do you balance the needs of your business with your personal values and goals? Are you willing to sacrifice profitability for the sake of your personal beliefs or values?
By answering these questions, you can gain insight into whether money or profit is the primary motivator for you in business. Prioritising long-term profitability, while also keeping an eye on financial gain, can create a sustainable business that is both financially sound and fulfilling.
It’s important to find a balance between the two. Understanding what motivates you and aligning your goals with your personal values can help you create a successful business that is both financially sound and sustainable in the long term.
Where should I start?
As a business owner, reading “Profit First” by Mike Michalowicz can be an essential tool for achieving financial success. This book presents a unique and practical approach to accounting, where you prioritise profit over revenue and allocate income into different accounts based on a predetermined percentage.
By following this profit-first accounting system, you can improve cash flow management, better prioritise expenses and ensure consistent profitability. “Profit First” also offers practical advice and real-life examples from successful businesses to help you implement the system effectively.
