Shane Black Daily Musing

The purpose of a business

The purpose of a business is to make money for its owner or the shareholders of it.

It’s not to keep money locked up or profits continually reinvested back into the business, leaving the owner or shareholders with nothing.

A mistake often made is thinking that by leaving everything in the business it’s a good thing because it gives the business more money to grow, essentially meaning more money in the future that can be taken out.

But the point at which enough is enough is often a grey area, so the money continues to remain in the business with the owners getting very little reward for all of their hard work.

This is a big mistake I have made in the past. Instead of taking money out of the business to reward myself for the long hours and hard work I was putting in, I kept it all locked up.

What happens though if the business hits trouble? You end up with nothing. All your hard work gone with no reward.

If you own a business, your first obligation is to yourself. You don’t have to drain the bank accounts, but you do have to take what you feel is a reasonable amount for the time and energy you put into the business. It’s better to do it now before it’s too late to do it.

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This is my personal blog, where I share the books I’m reading, what I’m learning, and the challenges I’m setting myself. I hope you find some value here.

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