Where do you see yourself in five years?

Or, why do you need to be fair to yourself in your business?

Donating is awesome, being able to donate on an ongoing basis is even more awesome.

Early on in teaching financial projections to new and aspiring entrepreneurs, I noticed a trend. So many students who came through my classes (heck, some of you reading this were in my classes!) wanted to have a community support/charitable giving/non profit facet to their business.

It is important to think about this when setting up the structure of your business. Will you give to causes? Will you use your business as a vehicle for your values? Will your studio or store be a community hub in addition to your business? I love this line of thinking, and I did it too – I wanted to be able to send money to causes I believed in and to use my business as a “force for good”, is how I put it at the time.

And this is why we need to talk about fairness, and especially fairness to yourself.

You have a goal – make money, but it feels too selfish so you add a second goal – give money. In theory, this is a fair plan, but the reality is that many businesses need time and profit in order to get to themselves to the point that they can start making donations. In theory, yes, you could donate from your sales from the very start, but what happens if you do this without knowing your profit margins? Understanding when you have enough to give money AND pay your vendors AND pay your rent AND pay yourself AND pay your employees is going to be key to you being able to help others.

Because fairness extends to yourself too. The long term financial sustainability of your business deserves your time and attention so that you CAN make choices like “use my retail space for community meetings” or “give 20% of sales to World Central Kitchen”. The ability to give money to causes that you believe in and the ability to be there for your community over a longer period of time requires that you be there to support them with your time, money, and energy. And that can’t happen if you burn out, or run out of money, or have to close up shop. Being there for people over a longer period of time requires that you take care of yourself. And that means having at least SOME priority for the longevity and profitability of your business.

Why being fair to yourself builds a more sustainable business

Working on The Jewelry Glossary Project to further define important industry terms like ‘sustainability’ prompted a lot of discussion about what sustainability even looks like in a business. There is the environmental sustainability side of being a certified green business, or using more transparent sourcing, or using mostly local vendors for your work. But it was the economic sustainability definition that always stuck with me.

Economic or financial sustainability means that you have long range planning, that you are accounting for things like the durability of your work, or the length of time you’ll be in business in order to also financially support your vendors and your employees, and at larger scales, economic sustainability can mean that you have a plan for how to have money on hand for any environmental clean up.

But having a plan for future donations is a type of sustainability planning too. It is a form of long range thinking can help you set up a business that pays you, that pays for everything, and one that accepts your responsibility to your staff to cover their paychecks. Because if you can do all of this, then you can plan to add in donations along with all of your other expenses and create a source of ongoing support for the causes you love. This will be easier to make promises that you know you can keep.

Is this kind of long range planning (think 5 years instead of 2 years) harder? Sort of, but it also makes it easier when you have a roadmap you can follow and when you can be more proactive than reactive when it comes to your goals.