It may sound odd for a Business Coach to say that breaking even is the worse place for a business to be.

But I’ve found it’s true. There is something about most people that causes them to refuse to really change and grow unless they have enough of one of two things: dissatisfaction or drive. Some people were built thinking like high achievers with an incredible amount of drive to succeed. But most people weren’t. Most are wired more along the lines of needing a higher level of dissatisfaction with their situations (in business as well as in anything in life: relationships, money, grades in school, etc) to become driven to make substantial changes for the better. For this reason, when a company is skimming by at “break-even”, often times I see the business owner experiencing all the stresses that come with owning a business without the two main ways business owners SHOULD benefit from owning their own business: time freedom and money freedom. They should earn (far) more than anyone else in the business after they grow out of the infancy stage, and they should be able to take more time off than anyone else. These SHOULD be the rewards for all the risks and sacrifices of entrepreneurship. But, wow, is this all too often not the case out there in the real world. Many business owners work the most hours and are often the last to get paid, the lowest paid, or way under-paid (or combination of those), and all too rarely able to take extended vacations or time off.

A business is always either growing or dying

In business you have to either get growing or you’ll be dying. It’s like a tree: it’s never just “getting by”. It’s always in the process of growing or dying. That’s why just breaking even is not a good idea. It won’t be long and that break even business will soon be dying if the owner doesn’t drive it to grow. When businesses are under $1 million in revenue (unless they’re a very high-profit industry with low cost of goods sold, like consulting), I almost always tell them they need to drive the company to grow substantially because they’re in one of the worse spots you can be in in business. That is, they’ve got a substantial amount of work going, but they only recently just crossed the break even thresh hold. That means they usually are not making much money yet, but they have a lot of work. And because they’re not making much money they usually can’t afford to hire much more help, or better people, or pay for other services that can lighten the load from the owner and all the team. It’s really hard. But the next $500,000-$1 million in revenue is where all the profits are. So many times the owners STOPS pushing because they’re now covering all their bills and the pressure is off of them a bit. BUT- they stop at the worse point in my opinion. This is why I say LOSING MONEY can be better for a business owner than breaking even. At least when they’re losing money they’re driven by HIGH LEVELS OF DISSATISFACTION to grow their sales and develop the business.

Why Stop Now?!

But when they break even and that pressure is released a little, often times that drive to grow disappears and they become stuck in a terrible spot in business. It’s hard to have fun when you’re just getting by, and you can’t afford to do anything to grow substantially like hire more or better people. I know some owners reading this will say, “Hey, at least I’m not losing money. That IS better than losing money.” I understand that. But I do think that for many of those owners, a much higher level of dissatisfaction needs to be established (in ways other than going back to losing money obviously) in order for them to grow through their current state. And to get to a spot where they are enjoying and excited about their business again. Growth and profits are fun. Break even is terribly boring and brings much more long-term stress than many owners may imagine.

Call Jon today if you’d like to break out of your Break Even state of business! He’s a business coach that has an incredible track record of helping business owners accomplish this. 651-243-0070

2 Comments

  1. Hey Jon,
    Great points, and as you know I’ve been there.
    I had about 6 months of the real money and
    freedom. Then I fell back into the trap of being too
    busy trying to make a living to make any money.
    Thanks for all your help.

    • admin

      Joe, yes I remember. I’m really excited to see you back on that path to financial and time freedom again. It’s so much easier to do when in an industry you’re passionate about!

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