Simon Sinek kicked off the conversation about the “why” behind things back in 2009 with his book “Start With Why” and his uber-famous TED Talk that same year.
In many ways, I think this concept, led by him, marked what has become a massive change in business: this idea of bringing our people along with us, leading with more transparency, getting better at communicating the vision and what’s in it for them and helping connect the dots so that people understand the purpose and impact of things that might otherwise be mundane, hard, or, in the absence of the “why,” not worth it.
In short, starting with why urged us to more clearly communicate our vision of where we’re going and why it matters.
Most business people, myself included, never took Sinek’s guidance far enough.
Because if we’re honest, every single one of us has a self-oriented “why” behind the “why” we talk about with others. And the problem with us not truly getting to the bottom of our motivation is that we end up doing one of two things:
- Perpetually chasing more
- Always pivoting to a new shiny object that promises better
And then, for many, you just keep readjusting the goalposts until you’re tired, burnt out, bored, or just ready for the beach. And then it becomes, “How do I get the most for what I’ve got now, so I can move on?”
But is there even a better way? I’m convinced there is.
We’ve been rallying around this idea of the freedom point. Every one of us is motivated to enjoy a certain kind of life, and that’s what is actually motivating us to build the career or business we’re trying to build. But most of the time, we’ve never actually given any real thought to it.
So, what is the freedom point, and how do you figure yours out?
A freedom point is the point at which you have enough wealth or cash flow to live exactly how you wish to live for the remainder of your life.
You might say, “Oh, that’s simple. $10 million. At just 5% interest, that’d give me $500,000 a year in income, and that’s more than what I need.”
But it’s worth giving it a lot more consideration. Because the more you just grab some random number that’s “big enough,” the more likely you are to simply keep trudging ahead, chasing bigger, more, and better, like I mentioned above. Or simply give in for a quick and easy “best offer.”
Take some time to really consider and zero in on what you really want. Here are a few things to consider: (I’d encourage you to write your answers down.)
Who do you want to spend your time with?
The worst outcome for any entrepreneur is to gain ultimate wealth and not have anyone to enjoy it with.
Do you want to be able to fly your children or grandchildren out to visit at a moment’s notice? Have a place for them to stay when visiting? Do you have close friends, perhaps with lesser means, that you want to be able to spend time with? Who? And how often do you want to be with them?
Do you intend to stay active in your church or some other kind of club, organization, or community? Will you spend about the same time, or do you want to be more involved as you have more available time or money?
Do you anticipate spending most of your time exclusively with your spouse? Or with family, kids, and friends? How much travel do you anticipate doing, and how? Air, sea, RV, or car? Now, take a moment with the calculator on your phone and put some numbers to the travel type and frequency you’d ideally choose for yourself.
What kinds of experiences do you want to share with them?
We all have different tastes and styles. Do you want to do the cruise ship thing or fly private to a secluded island destination? Follow F1 racing around the globe or take in several music festivals every year in style? Or maybe you’re oriented around your spiritual community or acts of service and want to do missional work around the world or in a specific region.
What about food? Do you want to remodel the kitchen, cook gourmet food at home, and entertain friends regularly? Or do you prefer to eat out most nights and enjoy restaurants?
Give some consideration to the specific kinds of activities you enjoy now and what kinds of activities you long to do once you have either more time, more money, or both.
Think about how active you’d like to be doing these things, and then do some napkin math on the rough ongoing cost, as well as any capital cost to purchase toys, memberships, or equipment.
What kind of setting or surroundings do you want to live in?
If you ask Brandon this, you’ll get a pretty fast answer: a house on a lake in the woods, a surf boat moored to a private dock, a beautiful and fun place where kids and grandkids look forward to spending time.
For you, maybe it’s a quiet cabin in the High Sierra or a winter home in the Mojave. Or maybe you’re more like my wife, Cara, and I, planning to keep our current family home as our landing pad and travel around the world to a new destination every few months. Still, others may want to own multiple vacation homes in different places and share them with friends or family or split time at them throughout the year.
Don’t waste any time considering what others expect of you or what’s customary in your family or friend group. Give deep thought to what you want or what you and your spouse are most interested in. Then, begin to investigate the costs.
What kind of starting point do you want to give your future generations?
“I don’t want my kids and grandkids to worry about money the way we did early on” is a common thing I heard back in my days as a State Farm agent selling life insurance. Even today, working with our clients, we hear the same thing from owners.
But what that looks like in practice can be as varied as what people consider to be “rich.” It’s helpful to zero in on what that means for you.
Do you want to provide enough money for your children and grandchildren to be able to attend college debt-free, or do you want your offspring to never have to work again? If the latter is your intention, what standard of living would you want them to have?
Or many very reasonable and compassionate business owners choose to leave no large sums of money or provide income to their offspring. What’s important is what you really, truly want.
Once you’ve wrestled with your answers and put some rough numbers to the life and circumstances you want, the math to calculate your freedom point is pretty simple.
The most important aspect of discovering your real freedom point is the clarity it can give in terms of what now requires your attention. What actually needs to be done in your business to systematically move you towards that freedom point?
You’re no longer just racing toward more, bigger, or another zero, but instead working your way toward a very specific make-up or scale for your business. Now, you can begin putting critical building blocks in place, developing departmental leaders, recruiting a GM, establishing core metrics, a recruiting strategy, or growing a direct sales team.
You’re working toward a specific enterprise value that will bring you to your freedom point. And that makes all the difference in terms of how to focus and prioritize your time, effort, and investment in the business.
If you’d like to get a robust picture of your business’s enterprise value so you know where you’re starting and get a feel for what levers to pull first, take Floodlight’s Health & Value Assessment, a data and research-backed assessment tool that will provide a full breakdown of your current value and a health score that can help you prioritize your next several moves in the business.
Chris Nordyke
Chris Nordyke is the co-Founder and President of Floodlight Consulting Group and Floodlight Sales Partners. Chris speaks throughout the year at industry events, and conducts live workshops focused on commercial sales and ops, customer experience strategy and building enterprise value. He is also the co-Host of the Head Heart & Boots podcast, a popular restoration industry show. For more information on Floodlight’s fractional sales management solution, visit https://www.floodlightgrp.com/
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