There are essentially four hurdles in business. The first hurdle is your first dollar. A lot of people try to start a business and they never really get it going, they never get a dollar out of it or make it over the first hurdle. However, after you make your first dollar, there’s not really a difference-making your tenth dollar, you just have more customers and more work.
You still need to make enough money so you can pay your bills. The second hurdle, survival, is to make enough money in self-employment where you can actually cover all of the business’ bills and have enough left over for your personal bills as well. I call this your “token cost.” This is the total amount of profit you need each year to cover all of your bills and hit zero, with no new debt.
The third hurdle is when you’re making enough money to be able to have some reserves, as well as enough money to put aside for investments and savings. Somebody told me this third hurdle is also called the “comfort hurdle” because you’re making enough money to pay your bills and not stress any longer so now you’re not as motivated to continue growing. The problem is, you can’t ever sit still. Jim Rohn says, “You’re in a boat and you’re drifting towards the waterfall. You don’t even know it’s happening. There is no sitting still.” In business, you’re either growing or shrinking. Number one, your business is not going to stay the same. Number two, you’re probably shrinking if you think you’re sitting still. Time changes everything. Employees may be starting to look for another job because they really want a raise but your company is not growing fast enough. There’s no hanging out in business, you always need to be pushing on to the next goal.
Overcoming the fourth hurdle, philanthropy shows you’ve really gotten somewhere because now you have enough money that you can make charitable contributions. You can invest in other companies, and do whatever you need to do to help your business grow.