What are the Three Ways that You Make Money From Your Business?
June 9, 2025
Three Ways Business Owners Profit from Their Business
Did you know there are three distinct ways business owners can make money from their business? Most people can name one or two, but the third is often overlooked—and it’s usually the most significant.
Here are the three ways business owners profit:
Regular Wages: Many owners pay themselves a consistent salary for the work they do in the business, just like any other employee.
Business Profits: Owners can take home the profits after all expenses are paid. This is often distributed as dividends or owner’s drawings, depending on the business structure.
Business Sale: The biggest payday often comes when you sell the business. All the value you’ve built up—brand, customer base, systems—can translate into a significant lump sum when it’s time to exit.
Most business owners focus on regular income and profits, but don’t forget the ultimate reward: building a business that’s valuable enough to sell. That “pot of gold” at the end of the journey can be life-changing.
Are you building your business with all three in mind? Remember, the true wealth from business ownership often comes when you cash in on the value you’ve created.
Is it because business owners are just focused on living day to day? , or because they need cashflow to pay bills and debts?
Remember the big picture: that is, the value of the business is like a pot of gold at the end of the rainbow, and when we focus on that pot of gold, our business is better for it.
Ready to unlock the true value of your business?
If you're not just working in your business but working toward a rewarding exit, I can help. With decades of experience in business sales, valuations, and exit planning, I provide expert guidance to ensure you don’t leave that “pot of gold” behind.
👉 Get in touch today to start building a business that's not just profitable now but valuable when you're ready to sell.
You Should Sell When You Want To,  Not When You Have To
The Business Lifecycle comprises: Start Up Operation and Improvement Wealth Management Exit. Business Purchase or Start Up Whether starting a new, or buying an existing, business, the following should be considered to ensure you make an educated decision before proceeding: Pro's and Cons of the industry Business Planning Marketing strategy Registration and licence requirements Name registrations (including ASIC and Domains) Tax Structures and Asset Protection Workplace Health and Safety Tax Office Compliance Intellectual Property / Trade Marks Insurances – Prof Indemnity, Contents/Building, Public Liab, Workcover, Life, Income protection, Key Man Finance & cash flow requirements Staff and employment requirements and obligations Fixed and Variable expenses, break even analysis Management and reporting systems. Operations and Improvement Sound business operations require the right foundations. This means access to accurate numbers and key measurements in a timely manner so you know what is happening in the business at any point in time. Business owners must be able to regularly review and monitor performance, and make changes quickly. Three main areas for business improvement are: Increasing Gross Profit margins Reducing overheads, and Growing sales. Regular meetings, monitoring and implementation of your strategies enable you to quickly see improvements to your profits. Many businesses fail because of a lack of planning. It is imperative that business owners manage, monitor and measure business performance to know where changes can be made, and to see that business plans are working. Wealth Management What is wealth? To be wealthy simply means you can afford your lifestyle, now, and into the future. Business owners should manage their affairs to grow and build wealth. They should also aim at reducing their input into the business and ultimately retiring. Exit There are many ways that this can be achieved. A succession plan or exit strategy will help your business transition smoothly to the new owner – and derive more value. It clearly outlines your timeframe, expected sales value and who your targeted purchaser is. It is highly recommended to plan your exit early, the sooner the better. That way, you have time on your side to maximise the value of your business for sale. Once your timeline is set you can then clearly set measurable targets to reach your business’s full sale potential. It’s also important to know who your targeted purchaser is, being your family, an investor, a new working owner or your business team. There are many different strategies and planning solutions depending on your ideal purchaser… So start planning your exit strategy now! If you’re thinking of selling your business, send an enquiry to admin@benchmarkbusiness.com.au. One of our brokers will be happy to assist you. If you would like more information, please see tips and advice from the ATO here: https://www.ato.gov.au/Business/Privately-owned-and-wealthy-groups/Tax-governance/Tax-governance-guide-for-privately-owned-groups/Starting-your-business/
What makes a business owner or entrepreneur successful? Is it: Hard work? Good luck? Being in the right place at the right time? Being clever? Genius? Teamwork? Belief? Persistence? Business success could be due to all of these things, one of these things, or none… In years gone by business owners have been successful for as variety of reasons, but in the future business ownership will not be as simple or easy as it has been in the past, and therefore business owners need to eliminate a reliance upon luck, and rely upon “science” to find success. In the past many people have approached business ownership like gambling, or the same way that gold prospectors did in the 1800’s around the world…. And while some people were successful, like gold prospectors, many people were unsuccessful. At Benchmark Business Sales we see many business owners every week who operate their business on the “luck” principle, rather than planning the way that the business will operate. If you rely upon good luck for survival, you will eventually be disappointed. Good luck cannot last forever. How do you turn your business success to a science?… and eliminate the reliance upon hard work and good luck? The answer is to take these steps. The first step is to apply research. The second step is to produce a thesis, or a hypothesis The third step is to test the thesis The next step is to implement the plan The last step is to continually measure and test results. Research is the first step in applying a scientific approach to business. Research the market (who are the potential customers and clients), research their habits, their likes and dislikes, produce a “profile” of the type of client or customer that the business will serve. Research competitors, barriers to entry, financial metrics (profit margins, KPI’s, typical operational costs), the future of the venture, ability to recruit and retain staff, .. there is a lot to learn from researching. Once the research is completed and collated it is time to produce a business plan. A Business Plan is like a thesis on how the business should operate. The plan is based upon the facts uncovered in the research phase, and it covers the way the business will operate financially, operationally, and how marketing and advertising will operate. It also provides a clear plan for how the business is to be operated. A plan which could be handed over to anyone, who could implement that plan and run the business. With the plan completed it can be tested. Once the plan is implemented and tested the results can be measured and tested against the research, and the thesis. If the actual operation of the plan produces unexpected results the plan can be altered and tested again…. This is the scientific approach to business ownership and management, and this is the best way to take the risk out of business ownership and operation. Don’t rely upon “luck” for business success. Turn to ‘science’ and make sure that your business isn’t just successful, but your success is sustainable. Read our News Article: Why Business Owners have to grow their Business: https://benchmarkbusiness.com.au/why-business-owners-have-to-grow-their-business Learn how to health check your with and improve your Business with our 8 Tips: https://benchmarkbusiness.com.au/how-to-health-check-your-business
Are you sure that you are ready to own your own business? Are you prepared to do what you need to do? Many people, with all levels of expertise and enthusiasm, don’t take time to make sure that they are ready to be a business owner. Here are a few questions (and tips) that may help you to ensure that you really are ready to “be your own boss”. As a business owner there are things that you must be prepared to do. Here are a few examples of the things that a business owner must be prepared to do: Pay others before yourself Work longer and harder than anyone else (especially your competitors) Only take holidays and leave when it suits the team Pay for great advice Find the best advisors Take time to sit down and make plans (don’t “wing it”) Be prepared to invest in advertising and marketing Get rich slowly Turnover is not as important as “leftover” Know yourself (some people are employers and some are employees) As a business owner you need to be many things. Many talents are required. If you are deficient in any of these areas, you really need to do something about it… You must be: A leader A diplomat A marketer An accountant Have basic legal knowledge A planner and problem solver Have vision for the business Set standards You have to be a “giver” not a “taker” Ask yourself if you are an “employee” – or if you are an employer. If you are not instinctively an employer – business ownership may not be for you. Start a business – or buy an existing business? Many people like the idea of starting a business, rather than acquiring an existing business. I have done both, and I in my experience it is much better to buy a business rather than “starting from scratch”. Really think about the benefits of acquiring an existing business and improving that business – rather than starting a new business. Be prepared for the risks. If you look at the statistics, most people who start a business will fail. Of course failure is not guaranteed, because if it was the world of business and entrepreneurship really would be dead, but the statistics are not encouraging. Almost 70,000 new businesses and start-ups commence operation with great enthusiasm and optimism each year in Australia. Unfortunately, 60 per cent of them will be gone within the first 3 years. The reasons for failure are many, one big reason is failure to address the points listed above. Remember that even a turtle has to stick its neck out to make progress. Business is a risk, and to get the rewards – you must take risks. So take time to critically analyse yourself. Think about your strengths and your weaknesses. Do you have what it takes to be a business owner? What do you need to change to give yourself the best chance of success? Here are some resources that may be helpful https://www.smallbusiness.wa.gov.au/business-advice/starting-your-business/business-skills https://www.failory.com/blog/startup-failure-rate https://www.asbfeo.gov.au/resources/small-business-counts# https://www.bizfilings.com/toolkit/research-topics/launching-your-business/planning/do-you-have-the-right-stuff-to-run-a-small-business http://www.benchmarkbusiness.com.au