I observe business owners making decisions in their company differently than how they treat their investments in the stock market. My observations are proven to be fact when I ask these owners which is more risky, your stock investments or your business. More often than not, the answer they provide is that their stock investments are more risky.  While I have determined it is their feeling of being in control in their company that lessens the risk in their mind, the opposite is true.  Just think about the prospect of selling your two different investments in a market heading downward.  In three days you can liquidate your stock investment and preserve value, but you can’t sell your business for top dollar in three days.

After working with business owners for over 25 years, my advice is to treat your business as an investment. If your stock investment was earning less than the market, you would direct your advisor to make changes to achieve the higher return.  For the same reason, make decisions in your company with the end goal to achieve the higher rate of return on your equity investment to match the additional risk you take as the owner.  This way of thinking will cause you to eliminate waste, fix the broken team, upgrade your talent, renegotiate the contract that yields subpar results, or quit serving unprofitable clients altogether.  I guarantee you would make the change in your stock investment if it wasn’t performing.  Why do you continue to ignore the business decisions necessary to maximize return on the equity in your business?

Your business is not your job, it is an investment. The return you receive does not include the salary you take home for your work, it is the return you receive after your salary that counts.  I encourage you to change your thinking, and make the decisions to maximize return.