If you are a business owner, do you know why you are in business? You may have never considered this, but your reason for getting into business is critical to your success. Two people can buy rights to an identical franchise system and one of them can be wildly successful while the other one goes broke. Even if both have similar exposure to business prior to the franchise purchase, and even if both are serving similar demographics, their initial motivation for starting the business makes the way they think about the business significantly different.
Their mindsets drive their strategies; which drive their actions; and ultimately their outcomes.
When I teach about business, the first thing I ensure everybody does is figure out which of the following five categories best describes their motivation for starting the business. If they cannot find themselves in one or more of the categories, they should reconsider whether they can be successful in the business.
The first situation that motivates you to start a business is when you are especially passionate about an issue. And you see yourself running a business where you get to be around your passion all day. An example of this is when you are somebody who is always working out or around gyms and you decide that you want to own a gym because you are passionate about fitness.
When you are very good at doing something and you believe people would be willing to pay you a premium for your services, you are motivated by your personal skill. An example of this is if you are a graphic designer for an advertising agency and you decide to become a freelancer and get your own gigs because you want more freedom and feel as if you would make more money overall.
Product or Service
If you have an idea for a product or service that you believe has a market, and you want to build a business around it, you have a product/service motivation. This is often the reason ‘serial inventors’ want to start a business.
When you want to create value in the marketplace that you will monetize for a positive gain and this your primary motivator, you are motivated by profit. If you have this type of motivation, you are not tied to one particular area or topic but are constantly looking for under-served markets and trying to figure out out how you can create a business model that would profitably reach that market – and ultimately increase your wealth.
If you want to change the world in a particular way through your business, you are driven by philosophy. This doesn’t necessarily mean that your business is a nonprofit, but it does mean that there is an overarching cause or movement behind behind your motivation to start and run the business. An example of this type of philosophy-driven approach is a company like Google, which has a strong philosophy around making the world’s knowledge accessible to as many people as possible. This is how they can have two completely different products like ‘search’ and ’email’ while still staying congruent as a company.
You may find yourself in one or more of the motivations above. I believe that the most successful businesses can articulate a reason for their business in all five of the motivations. Therefore, I make sure that my financial-advising business is driven by all five P’s as follows:
I am clearly passionate about personal finance or I wouldn’t be writing a blog about it.
I had the personal skill to start the business because I did very well as a financial advisor when I worked for a corporation. So I knew that I could take those same skills and use them as the foundation for starting my own practice.
When I worked at the corporation, I knew I was very good at providing service to my clients, and this would translate well in the financial-advisor world, which is very relationship-driven.
I understood certain segments of the financial-advising market especially well and knew that I could communicate about finances to clients in a way that others couldn’t, thus creating profit by realizing value in an under-served market
Finally, I have a very strong belief about the importance of stewardship over everything that God has given us, and I know that one of the ways we can make sure we take care of His ‘stuff’ is by being responsible with our money. This philosophy is why I write books, advise clients, write this blog and do speaking engagements.