Lifestyle versus Growth Business

I meet a lot of entrepreneurs who are confused.

Some are running lifestyle businesses that would stop without them. They tend to be undercapitalized, and the company runs them. I like to ask them if they are trying to run a lifestyle versus growth business?

Others are running growth businesses that can run without them in the day-to-day activities of their business. They tend to have strategic plans that get linked to tactical execution. Most importantly, they run their business, not the other way around.

The difference is significant if you want an opportunity to grow, expand and at some point, sell your company. I have done both in my career, so I am intimately knowledgeable about the differences.

Pick One Path 

For five years, I ran a commercial photography business that had one employee – me.  At the time, my goal was to be self-employed, avoid having a job that wasn’t as flexible as I needed and to have an income stream based on my skills. I didn’t want complexity, business loans, employees or any of the trappings of a growth business. I was able to make money running my photography business but wasn’t creating an asset that could be sold. At some point, I closed my business when I jumped into a growth business.

For fourteen years, I ran a wholesale bakery business that had more than fifty employees and a management organization.  I was the President of the company, I ran the business with my wife and together we grew our company with the intention of selling it to a larger company. We ran the business and guided it to well-defined strategic goals with a team. We could take vacations and get away from the business, to work on the business and not just in the business. Eventually, we successfully sold the company – as planned.

You can listen to an interview I did with John Lee Dumas from Entrepreneur on Fire about running a business at this link.  John has over a thousand interviews with entrepreneurs that can help enlighten you about these issues.

Lifestyle or Growth?

To choose what is right for you, consider these factors.

• Start with the end in mind. Are you looking to sell this business some day?
• Do you just want to run it without any organizational structure in place if you can?
• Are your competitors going to leverage their employees, capital, and advantages and overwhelm a one-person shop?
• Are you able to pay yourself a salary from the revenue from the business? If not, how long can your capital last?
• If you are earning less than minimum wage, you may need to rethink your approach.
• How clear is your strategy and point of difference from your competitors?
• Will customers pay for the value you deliver? If not, what is the future for what you do?
• What else is going on in your life that may hold you back (or be a catalyst) to one choice versus the other?

The key question is to determine where you want to be in a few years?

Time to choose – lifestyle or growth. It is hard to do both at the same time. 

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Need help figuring out your path forward? I can help be a sounding board to get you where you want to go. Think of The Marketing Sage like a GPS. Text me at 919 720 0995 or email me at jeffreylynnslater@gmail.com

 

 

 

 

 

 

 

 

 

 

 

Photo credit: https://pixabay.com/en/photos/alone/

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