Business owners are a huge part of their business, that should go without saying. Your vision, your leadership, and your insight will provide the business with direction to follow. Your business can enrich your personal life, too. Employees, partners, colleagues, and customers/clients can all move from business relationships to personal. Doing well in business can enrich you in more than the financial sense. But there’s good reason to remind yourself, and act on the fact, that you are not your business. Here are a few of them.
Joint-finances are a headache for everyone
Let’s start with a point that can seem minor until you find yourself dealing with the headache that comes with it. Everyone starting a business needs to consider the merits of keeping personal and business finances separate. When filing your tax returns or in the event you face an audit, having different accounts and different books for personal and business finances makes it much, much easier to account for every cent of income and expenditure. It helps you keep spending appropriate to different accounts, too, rather than dipping into reserves for the wrong purpose accidentally.
You should have some insulation
A sole proprietorship is easier; there’s no doubt about that. Other business models might require more work to set up, but there are guides on how to start an LLC or an S Corp that make that hassle almost negligible. The fact is that tying your business directly to yourself and not making another entity of it leaves you wide open to more risk than one person should bear. You might end up paying creditors out of your personal finances and you might be legally liable for mistakes made in the business, even if it’s by an employee. Owners should be responsible and ethical in how they run a business, but that doesn’t mean they should risk themselves too much as they do so.
Be more than your business
The truth is that the separation between business and personal should be mental, as well. Finding your work-life balance is going to make easier to excel in both worlds. The business might be one of your highest priorities while you’re running it, but it shouldn’t be the be-all and end-all. It’s a project, a tool to reach a goal, and the goal has to be the enrichment of your life first and foremost.
Ready to move is ready to succeed
If your fate and the fate of the business is too closely linked, you are selling both yourself and your business short. A business owner should be ready to sell a business and willing to move on to the next thing. Make your money, prove your investment’s worth, and start another venture. You should be able to go where your passions and motivations take you and your business should be able to continue to succeed under the stewardship of new ownership or management.
If you tie yourself to the business too much, you’re giving yourself more work and more risk than one person should have. You might also be tying your fates together in a way that offers both business and owner less freedom. Consider that the next time you want to get a startup running.