One of the most powerful lessons I give aspiring entrepreneurs and business owners is the opportunity to experience of signing payroll checks. It has been said that, “Your life changes the moment you sign the front of a payroll check instead of the back.” In my experience, that is absolutely true.
A Powerful Lesson
I include this lesson somewhat early in a workshop, but following several important decisions and following a lesson on burn rate. At this time during the session, the participant has already spent huge sums and sees the rapid draw down of cash on hand. The also know the urgency of maintain positive cash flow and maintaining a cash reserve. At this point in the game, participants are cash conscious. And this is when we perform payroll.
But I don’t let the participants off the hook. I don’t give them just the cost management stressors. I take a few minutes to tell participants what paychecks mean to their employees. I talk about health insurance, child care, and braces for little Suzy. I talk about the oil change that has been put off. I talk about a nearly empty pantry.
Participants feel the pressures from above and below—the stress of stewardship of the firm’s resources and the obligation you feel toward the people who work for you.
I, then, have each participant write out the paycheck by hand, with a unique set of names and amounts. The last check is written to oneself and is made in the smallest amount. In an extreme cash crisis, I ask participants to consider tearing up their check entirely and the messages that act sends to your employees, your family, and yourself and how each group will react to those messages.
Empathy for Entrepreneurs
Too often, I see business owners vilified in pop culture. They are often characterized as greedy or unfeeling towards their employees. I’ve generally found the opposite to be true. There are many ways to become wealthy. Most of them are easier and far less risky than starting a business. If one starts a business, it’s usually because someone wants to make a positive impact in the world. Some of the best people I’ve ever know have chosen the hard road of entrepreneurship. I’m inspired by their example.
