This article appeared in the June 17, 2011 issue of National Underwriter magazine:
Do You Own a Business or Hold a Fancy Job?
by Joseph Maas
“Many professionals believe they own businesses which are saleable assets that will continue to thrive after they retire or leave the company. Oftentimes, however, what they really have is a “fancy job.” What’s the difference between owning a company and holding a fancy job?
The biggest difference is that business owners have developed something that can carry on without their day-to-day input. The businesses can operate independently. Professionals who hold a fancy job, on the other hand, work in a place that looks like a business but that cannot operate without their constant attention. Which do you have – a business or a fancy job? Let’s take a look.
First, let’s explore what a real business looks like. A business is a legal entity that is created to earn income, fulfill a passion or a need, or provide a challenge. A business is also something that the owner can walk away from for six months or longer while the business continues to grow and thrive. In this case, the business has real value. It is an asset that can be sold because it essentially runs itself, including bringing in steady cash flow. Of course, the time frame or definition needs to be tailored to fit a particular business or industry, but the goal is the same – to create a legal entity with real value…”