Thinking about operations and strategy in “Lifestyle” business
It’s true! If you run your own company, you can take vacations whenever you want and have the flexibility to do all kinds of non-work activities. You CAN sit by your pool and work and YOU CAN earn money while you sleep. However, if you want to eat, maintain your home and be able to take vacations every once in a while, you’ve got to think strategically, about how you start it, run it, grow it and maintain your lifestyle. You see, as a business owner, you are the key to the business, and thus, without setting up the systems in advance, the business may not operate the same way while you are gone.
Building a company that can allow you to establish and maintain a lifestyle, that perhaps you can pass on to someone else, or can potentially retire from at some point is one of the thoughts and conversations that small business owners tend to overlook. Many business leaders may not even think about what life will be or could be like if or when they are able to leave.
Business strategists and brokers will often speak in terms of creating an exit strategy – making plans to liquidate, sell or walk away from the business. Financial planners often speak in terms of having enough money to retire and often give business owners clarity on how much it will take for them to retire and enjoy a lifestyle of their choosing. Business owners, on the other hand, end up either working until they die in office, or are no longer able to work, at times, with few options about what they could or should do.
But what happens in the interim – the time between when you open the business and the time when you close it? The whole point is to be able to have the flexibility to do the things that you enjoy. It was never about working 60 hours per week, including nights and weekends. It certainly doesn’t look like doing tons of things that you never had any intention of doing, perhaps like doing all sorts of compliance-related paperwork.
Regardless of the type of business, businesses need to have a certain level of structure in order to be sustainable, and a plan to determine how and when you will meet your goals or strategies in the business. For example, if you want to have a $100K per year income, you have to determine how to do it and have realistic plans on how to reach it. You will need to have money to invest in the business to get it to that level, know what that investment is for and how you will recover the money, as in, not get into the bottomless hole syndrome.
Another component you will want to consider is how you will actually run the business! Again, you are looking at a business that will allow you to live a flexible lifestyle. There are lots of activities in running a business that don’t ascribe to that – meaning that they are activities that are outside of your capabilities. How will you handle that? If you don’t do bookkeeping, for example, how do you plan to get it done?
Think about your money. Are you the type of business owner that pockets every dollar you make, and squeaks out just enough to keep the business moving forward. Here is a secret – you will never achieve your goals if you think like that. You have to give yourself a “salary” which would be a portion of your business income so that you can continue to reinvest in the business. You won’t achieve your business goals by osmosis.
You won’t achieve your business goals by inertia, either. Inertia is similar to standing next to a big machine on a manufacturing line and pushing a button over and over. What you want to think about with your business is how to stay relevant and competitive in the marketplace. The industry, marketplace and competitors will change over time. If someone sees what you do as attractive, they will duplicate it and try to steal your customers. If you miss the changes your market dictates to you, your business will be irrelevant, and you will need to rethink your business in order to stay in business.
Lifestyle businesses are do-able, and can be quite lucrative with the right product, infrastructure and marketing. They can and should be extraordinary – innovative, excellent, socially responsible, structured and leaving a legacy. So ask yourself: what is YOUR lifestyle business?
Aepiphanni Business Consulting: The Business Strategy People is an Atlanta, Georgia based Operations Management and Business Strategy Consulting Firm dedicated to serving the needs of small to medium sized business leaders. We help business leaders DESIGN | CREATE | BUILD extraordinary businesses. We support our clients with financial management, product and service production and delivery, outsourced services management, sales & marketing and business growth. We provide them with a number of flexible solutions to help them reach their goals.
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