Should you work hard to make money, or should you make money work hard for you?

It’s no secret that I enjoy my Harley Electroglide. I love the wind in my face, the camaraderie of fellow bikers, and the ability to set off car alarms as I cruise by. I enjoy the challenge of packing for a trip, outsmarting the four wheelers and beating the weather. But make no mistake: This toy is not even remotely practical.

It’s pointless to whine about high Harley prices because the salesperson knows that if I were really trying to be practical, I could get that six-disc CD changer and a roomier trunk for less money when bundled with an air conditioner and seating for five. In other words, a car would be cheaper and would probably get better fuel mileage to boot.

My scooter is an irrational, emotional bauble that I have because I want it and I would be silly to try and justify it in any other fashion.

Before you start wagging your finger at me about my vice, let’s have a peek inside your enterprise to see if you also have irrational expenses. But before we start prying, let’s consider an expensive mindset that you may have carried from your employee life to your business life.

The ‘Paycheck Mentality’

What provoked you to enter the business world in the first place? One of the more common motivators I have seen is the “paycheck mentality.” Your thoughts may sound like this: “I do all the work around here while my boss gets all the money. It’s high time I get my share.” If that’s you, welcome to the ranks of the self-employed.

The paycheck mindset may also apply if you grew weary of layoffs or found yourself at the top of the career ladder with no other place to go. Self-employment has its advantages, no doubt, but if “being your own boss” describes your goal, you’re likely to be running your business with a paycheck mentality.

The paycheck mentality is the very fiber of the U.S. consumer-driven economy. To get ahead in life, we start with education, then add experience. To experience we add endurance. If you want a bigger house or a nicer car, you work longer hours, get raises and, of course, use that money to make payments on the bigger, better bauble. The bigger, better bauble costs more money to maintain, plus there’s the payment that comes due with lunar regularity.

This is a self-perpetuating treadmill: earn money - spend money - work more to earn more money - spend more money. It never stops. When you carry this type of mentality into your business, you get the benefit of a few tax breaks but the paycheck mentality continues to shackle your business.

Your lifestyle in the paycheck days was to work hard and earn money. If you needed more money, just work harder and bring in some of that lucrative overtime money. If you’re self-employed with a paycheck mindset, you will still have a goal to do more work. Do you do your own bookkeeping in order to save the expense of a bookkeeper? How about vehicle maintenance - do you do your own oil changes to save a few bucks? Instead of hiring an apprentice, do you just work a few more hours every week?

In other words, to get more, you work more.

Here’s a more complicated version of a paycheck mindset at work. Let’s say you’ve been renting a backhoe on a fairly regular basis. You may be thinking, “I spend nearly as much on monthly equipment rental as I would on backhoe payments, so instead of paying all that money to the rental place, I can be purchasing my very own piece of equipment.” Then, to inject a little emotion into the equation, “If I just had my own backhoe, I would be able to get more dig jobs and everybody knows that dig jobs are big money!”

Congratulations, you have just joined the rat race. That backhoe requires a truck, maybe even a dump truck, a trailer, insurance and maintenance but it sure will help you stay busy. That loan payment will continue to pop around every month, just like normal, regardless of the type of work you’re doing (or not doing). When things get a bit slow, you can always offer a price cut, just to keep busy.

And whom do you call when it breaks on the job? Doesn’t it look nice, sitting there with your company logo on the boom while you chase down a new hose? Oh, and now that your tractor is broken, it’s keeping you from tackling the other work that you need to be doing. Suddenly, you find yourself working for the tractor instead of it working for you. But you sure are busy!

The inevitable equipment surprise factor veils the more insidious problem with paycheck thinking: Who is running the tractor? If it is you, then how productive is the tractor when you’re not on it? You see, paycheck thinking doesn’t stop with just one “toy.” Before you know it, you can have an impressive stable of equipment that allows you to take on just about any type of job. While equipment sits idle, waiting for its turn to be productive, it’s more of a liability than an asset.

This is doubly true if you’re in debt for the equipment. This isn’t necessarily bad, if you view your duct-cleaning rig the same way I view my Harley: I don’t expect my Harley to earn a profit.

Debt adds another layer of expense into the equation. In addition to warehousing, insurance and deterioration, your equipment now has a monthly payment. How much work do you have to do to keep up with all those expenses? This is the paycheck mentality in full blossom. Work more, get more stuff, and then work more to take care of the stuff. Every moment you spend with your hands on a tool is a moment you can’t spend developing your business. You are still on the paycheck treadmill.

The ‘Payroll Perspective’

Have you ever wondered how wealthy people find time to take more vacations, take part in politics and community service, or just spend time at the golf course? It isn’t because they’re good at finding things to do. It’s because they’re good at finding ways to get things done.

They don’t have a paycheck mentality; they have a ‘payroll perspective.’ Why should they do the job themselves when they can have money do it instead?

Money lets the businessperson be in more than one place at the same time. Go ahead and sell three or four dig jobs, then find a couple of excavation contractors to handle the dirt work while you focus on finding people to do the installation. With two jobs going on at once, you’ve doubled your revenue stream (without getting grease on your polo shirt).

As you increase the number of revenue streams (producers) that you manage, you’ll find more time for improving your business and your life. It’s very likely that you’ll end up with backhoes, duct cleaners and a host of other equipment, but it’s not because you seek ways to do more. It will be because you have more for your people to do. You’ll begin to understand why so many organizations view their employees as assets; it’s because they produce the wealth.

If you want to stay busy, buy more equipment. If you want to build wealth, equip more people. That’s the difference between a paycheck mentality and a payroll perspective.