Topic: Treat Your Company as an Investment
Guest: Dan Gordon & Donnie Shelton
In this episode we discuss:
Dan's concepts of the Income Circle vs. the Wealth Circle
The Income Circle is how you make your living, pay your mortgage, put food on the table, etc. If you’ve built a predictable business, you take a paycheck and are able to pay for all the things you need
The Wealth Circle is your retirement. As a small business owner, you don't have incentive shares and a pension like you might if you worked for a large corporation, so you must treat your company like a valuable investment
How it's common among smaller companies to use their businesses as a bank account
Short-term vs. long-term thinking
How one-time services generally don't add long-term value to your company
Why risk is a big factor to consider in terms of business risk and investment risk
Why it's important to find your Golden Mean between income and investment
Dan's advice for
A case study Dan published in PMP magazine (scroll down to No. 3): "Why a firm with stronger recurring revenue is less risky and ultimately worth more"
Notable: "A $100,000 bird job is sexy. A $110 quarterly is kind of a nickel and dime deal. It takes a lot of nickels and dimes to build a business." —Dan Gordon
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