Is money the best measure of success?

Work Smart Not Hard Tip No. 54 in a series written for Indie Cambs

When the end of your financial year comes around do you look at your financial plan for the year and use this to work out if you’ve been successful in meeting your goals?

When I asked my network of business owners this question I got a bit of pushback from people saying that money isn’t the only measure of success. This is, of course true, but the thing about using money as a measure is that however you feel about it, it means the same. It’s not a subjective measure like happiness or quality of life.

Most people who start their own independent businesses do it for reasons other than money, the main one being freedom to choose. As Dan Pink says in his book “Drive: The Surprising Truth About What Motivates Us”, human beings have a deep need to direct our own lives, learn and create new things, and do better by ourselves and our world. Otherwise known as Autonomy, Mastery and Purpose. (This is why I called my network “Drive”.)

Autonomy is having a measure of control over what we do and how we do it. Mastery is making progress and getting better at something that matters. Purpose is doing something that makes a difference in the world or a contribution to others.

If you were to measure the success of your business on these three things, how would you rate it?

Money is important, of course it is. Without a good profit our businesses won’t survive, and it is the easiest element to use as a measure of success. It’s also easy to use as a comparison year by year to measure progress – and also as a comparison with others.

When we measure money it’s important to know what the most significant number is. Is it turnover (revenue) or profit? And if it’s profit is it gross profit or net profit? For the purposes of this exercise the most important thing is to measure the same thing each time. And of course, because we’re talking about working smart it’s also important to know how much time it took to make the money.

Busyness does not equal success. In fact working harder and earning less is a big fat warning sign. While I’d never advocate for charging your time by the hour it’s important to know how much you earn for each hour that you work – and that’s not the same as the amount of money that you pay yourself.

So how do you choose to measure your success?
A good balance between money earned and time spent?
Peace of mind?
Happiness?
Or something else?
I’d love to know …