Why did you start this business?
I don’t ask people this as polite small talk before digging into the numbers.
Your purpose and meaning behind becoming a business owner is actually very important to your business’ success.
It’s the third of Ron Baker’s four spheres, and his note on it stuck with me: We may have to pull the answer out of ourselves.
He’s right. Most ecom brand owners have an answer, it’s just buried under a lot of busy.
So I ask a follow up question. Do you want a lifestyle business, a growth machine, or a business you’ll sell in a couple of years?
Then I ask why.
Your answer is the key to every financial decision
What I want you to understand is that your answers are the key to every financial decision you make.
If you want a lifestyle business, we protect your owner pay and your time first, and create growth that comes at a pace that doesn’t swallow your life.
If you want a growth machine, we plan to reinvest. Debt can be a tool, as long as revenue grows faster than the debt does.
If you want to sell, we focus on clean books and steady margins because that’s what a buyer pays for.
It’s the same business, but three very different plans.
Why this is personal to me
Helping clients figure out their purpose is personal to me because I built my first business so I could drive my daughter to tutoring and still serve my clients.
That was my why, and it shaped every choice I made about how big to grow and how to work.
Without a why, the numbers have nothing to aim at and you end up chasing revenue because it’s the only scoreboard you have.
You don’t need a perfect answer for any of those first three questions.
Just start with the honest one, even if it’s “I wanted more freedom” or “I wanted to stop working for someone else.”
Cyndi
For my next research question I’d like to know: when did you last open your P&L?
Quick Summary
- Why did you start your business? Your answer is the foundation of every financial decision, not small talk.
- Purpose and meaning is the third of Ron Baker’s four spheres, and most ecommerce owners have to dig to find their answer.
- A lifestyle business protects owner pay and time first, with growth at a sustainable pace.
- A growth machine reinvests and can use debt as a tool, as long as revenue grows faster than the debt.
- A business you plan to sell needs clean books and steady margins, because that’s what buyers pay for.
- Without a clear why, owners chase revenue as the only scoreboard. Start with an honest answer, even a simple one.
Frequently Asked Questions
Why does it matter why I started my business?
Your reason for starting your business determines what your numbers should aim at. Without it, revenue becomes the default goal, even when more revenue doesn’t give you the life or outcome you actually want.
How does a lifestyle business plan its finances differently from a growth business?
A lifestyle business prioritizes owner pay and the owner’s time, and grows at a pace that fits their life. A growth-focused business plans to reinvest profits and may use debt strategically, as long as revenue grows faster than the debt.
What should I focus on if I want to sell my ecommerce business?
If you plan to sell, focus on clean, accurate books and steady margins. Buyers pay for predictable profitability, so consistency matters more than fast, uneven growth.
What if I don’t have a clear answer to why I started my business?
You don’t need a perfect answer. Start with the honest one, such as wanting more freedom or wanting to stop working for someone else, and let it guide your financial plan from there.
Related reading: Does My Ecommerce Business Support the Lifestyle I Envisioned? and Am I Using Debt Strategically or Just to Survive?
Not sure which plan fits your business? Let’s talk through your why and what it means for your numbers. Book a discovery call with Your Profit Team.
