Lifestyle and Growth Businesses – Both are Good
The Dragon’s Den effect, when they say “this is a lifestyle business and not investable” sounds like it may be denigrating lifestyle business, but this is not the case. A lifestyle business is one that suits your lifestyle. It’s in a business area that you are happy with and has hours and an income that meet your objectives. Not everyone wants to build a global multinational, nor should they.
These smaller businesses open up the possibility of providing a good income for the founders, an improved lifestyle and have the strong potential to create part or full time employment as they evolve. They also have the advantage of being able to start with minimal cost, working from home and really keeping those overheads low. For those people who have the capability to start a lifestyle business you’ll also be more in control of your destiny.
These are great businesses as are the businesses that grow into larger local and international operations. There is no good or bad here, they are just different to suit the varying aspirations of the founders.
The Wisdom of Customers in Identifying Business Potential
My experience is that once you have gained their trust customers are very happy to tell you what products and services they are having trouble buying and where they would like help. These opportunities exist even in tough economic environments. Being small and local may be your biggest advantage in meeting these needs with great understanding and service.
Some Common Traits of Lifestyle & Growth Businesses
In order to give you the best chance of success both types of business share some common, essential management requirements.
Get your basic business processes in place. Being organised and professional saves a lot of time & increases the likelihood of success. These include:
Finance – A simple finance system will help you stay on top of your cash and company performance.
Orders – Log them so you know what you have, their value and when they are complete.
Customers – Keep a contact management system with your customers and prospects in it, notes on conversations and regular diarised follow ups to increase sales.
Documents – Have them in a shareable document library so anyone you work with (including customers & suppliers) can get at them without asking, and you can get at them if you’re away from your workplace.
These are all readily available in low cost/no cost simple to use systems.
Scaling the Business on a Solid Foundation
For those that want to, once you have proved your operation locally, solid foundation processes will support scaling of the business in the UK and internationally. The one thing you can be sure of is that as a business grows these essential business processes become critical to the efficiency and quality of operation that is absolutely necessary if you are going to function successfully.
As a bank manager of mine said:
“We are happy to support your business through tougher times because you know the financial state of the business and order levels at the end of every month and act accordingly. There are some customers of the bank that don’t know if they have made a loss until the audit has been done after the end of the financial year.”
A little bit of organisation & discipline goes a long way.