Lifestyle Business or Prosperous Business
Written by Chris Elmore
I have had the great fortune to see hundreds of businesses over my career. These businesses spanned all over North America and the United Kingdom. They have also spanned from small “mom and pop” shops to large multimillion-dollar, multi-location businesses. I’ve seen many things and noticed that there are two business types contractors model their business around.
#1: Lifestyle Business that maintains a certain lifestyle today for the owners but nothing for the future.
#2: Prosperous Business that helps everyone in the business achieve their goals and provides for the future.
Looking at the definitions above, you’re probably like most owners. You want a Prosperous Business. You want you AND your team to achieve their goals. You want a clear and prosperous future.
Maybe you’re unsure where your business stands. Do I have a Lifestyle Business or Prosperous Business? Keep reading to find out.
In the paragraphs below, I’ve listed the particular traits of both types of businesses. It will address:
- How you see your business.
- Are you one over the other, or a hybrid of the two?
- How to transition your type of business.
- What do you need to be doing to get your business on track to be a Prosperous Business?
In a Lifestyle Business…
…the owners make a “decent living”.
…everyone works as hard as they want to…or not.
…everyone is comfortable because things stay the same from year-to-year.
…there isn’t much innovation because nothing needs to change.
…change is a bad thing because it will mean someone’s lifestyle might change.
…most of the profit is taken by the owners for lifestyle items.
In a Prosperous Business…
…everyone makes a great living and has a well-balanced life.
…everyone works hard toward a common goal.
…everyone looks toward the future.
…innovation is expected and leads to change.
…change is welcome and leads to better things.
…there is enough profit to reinvest in the business and save for later.
So which business do you have? If you have a Prosperous Business, I congratulate you! You are changing the lives of your team and providing for a prosperous future. You will look back and realize you made it and are living your best life.
If you have a Lifestyle Business, go easy on yourself, but resolve to change. Resolve to follow a few basic principles to get on track to a Prosperous Business. It won’t happen overnight, but you can do it.
Here are some basic principles to implement in your business today to get on track to become a Prosperous Business:
- Know Your Personal “Why” – Determine and write down your life goals. If you had all the time and money in the world, what would you want to do? Where would you go? Who would you help?
- Quantify Your “Why” – Figure out the time and money it would take to do the things you want to do, go to the places you want to go, and help the people you want to help. When do you want to do those things? Things start to become real when you allocate resources to them and set a timeline.
- Know Your “Why” Business – A Prosperous Business gets you to your “Why”. Plan what your business needs to look like by the time you want to achieve your “Why”. How much in sales? Profit? Your role? Locations? Additional revenue streams?
- Know Your Exit Strategy – Just as important as knowing what your “Why” business needs to look like, you need to know what you want to do with it when you get there. If you don’t plan it now, you may have more work to do later. You’ll need to realize the equity from the business. How will you do that? Will you sell it? Be an absentee owner?
- Start Today – Look at your “Why” business. If it’s going to take you 15 years to get there, break it down into steps. What does it have to look like in 10 years? Five years? Two years? How about one year from now? Take this one-year projection as your budget for the next year. Take action to achieve this budget for the next year now!
- Track, Measure, and Adjust – Start keeping score. Know where you are in relation to your “Why” business each and every day, month, and year. Make adjustments to stay on track. Continue to repeat this process every day, month, and year until you hit your “Why”.
- Know Your Team Members’ “Why” – Repeat the process above for your team members and yourself every year. Make it a part of your budgeting cycle. It is every bit as critical as planning what you will sell and spend in your business.
A Prosperous Business is on track to reach the “Why” of the owners and the team members. It’s a business that provides a rewarding, balanced lifestyle for everyone on the team. It also provides for a secure future. But you have to want it. Otherwise, you’ll fall into the trap of a Lifestyle Business. Things are good today for the owners, but there’s not much of a future. The team surely doesn’t see the future. They’ll stay and help perpetuate your lifestyle. Until they don’t. They’ll leave you for the Prosperous Business down the street.
Chris Elmore is the Operations Manager of Service Excellence Training and has helped hundreds of business owners grow using his unique insight in the service industry.
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