Be Rich or Be Happy: Which Would

Sorry, entrepreneurs: You're not likely toachieve both. Here's why.

The stereotype of an entrepreneur is aperson who starts a business—any business—in order to get rich. In reality thatis seldom the case: Most entrepreneurs start their small business to follow apassion, do what they love, and live a dream.

But what if you want to do what you loveand get rich? Without the right approach, it's often impossible to accomplishboth goals.

The problem lies in scale.

Say you've always dreamed of being a chef,so you open a 25-table restaurant. You get to do what you love, but in simpleterms the prices you can charge and the number of meals you can serve naturallycaps the financial returns possible.

You can be successful—but only to a point.

And you might be perfectly fine with that,as long as you view success as getting paid to do what you love. (Which is, ofcourse, an awesome definition of success.)

The same is true if you're a serviceprovider and especially if you're a one-person shop. Revenues are limited bytime and rate: The number of clients you can serve and the level of fees youcan charge. In simple terms, capacity and price limits your earnings. Once youhit those inherent caps, the only way to generate more income is to expand: Addmore locations, add employees, add to your investment... add more of everything.

And then you get to do less of what youlove. More of your time will be spent working on your business, not working init. I know: Every business expert says to be successful you must work on yourbusiness, not in it—but unless what you love is running a business, you won'tbe as happy.

Say you're a contractor and cabinetmaker,like my grandfather was: He loved working with wood, so generating more revenuemeant spending a lot less time in the shop and a lot more time with hisemployees and customers. (To get his woodworking "fix" he resorted tospending Sundays in his shop, which, as you can guess, went over really well athome.)

Say you love landscaping, you dream ofstarting a landscaping business, and want to make $300, 000 a year. Accordingto salary survey sites the average owner/operator of a landscaping businessearns somewhere between $30, 000 and $85, 000 a year.

Of course that's just an estimate.Certainly some owners make less, and some make a lot more, but absent a uniqueapproach your income will probably fall somewhere within that range. (Achievingout-of-norm results in any field requires taking out-of-norm actions.)

Say you hit the top end of that estimate.$85, 000 is a great income, but it's also well short of your $300, 000 target.Unless you're in a densely populated area and also land a number of commercialaccounts, to reach your income goal you'll need to establish multiple locationsin multiple markets.

Either way, you'll get to do a lot lesslandscape design and implementation than you originally hoped since yourprimary focus will need to be on growing and running the business—not ondesigning, installing, and maintaining amazing landscapes.

That leaves you with a choice: Do more ofwhat you love and earn less than you hoped... or scale up and do less of whatyou love in order to make more money.

Only in rare cases do entrepreneurs get tohave it both ways.

So take a step back and think about yourgoals.

If you will enjoy the satisfaction of doingwhat you love and will be satisfied with the income you can realisticallyexpect to earn, then scale doesn't matter. Live your dream and work in yourbusiness.

But if the income potential of doing whatyou love won't be sufficient, create a plan that allows you to scale yourbusiness. Set your financial target and work on your business to build acompany of sufficient scale to achieve that target.

Either choice is great—as long as it's thechoice that works best for you.