Is Yours a Legacy or Lifestyle Business? How Do You Decide?
Not everyone wants to accelerate the growth of their business. Not everyone wants to make loads of money and sell their business for a fortune. I know; who would have thought?
I didn’t realize this. I was an EOS/Traction Implementer for many years and worked with a very talented bunch of individuals. We all assumed that because our clients wanted us to implement EOS/Traction they wanted to accelerate their growth. However, what I found was that not all business owners did. They didn’t all want to go further, faster. Not all of them wanted to accelerate their growth, but they thought they did.
What I also realized is that it’s really important to not kid yourself about what you want, and just decide what it is. Why? Because your vision, your modus operandi, and your goals, all change depending on whether you are in business for legacy or lifestyle. So, what’s the difference?
Being a business owner or CEO means being faced with the constant challenge of making critical decisions that shape the future of the company. Deciding on whether you want to go in a lifestyle or a legacy direction has significant implications for your short-term goals, work-life balance, and long-term vision. How do you decide which path is right for you and your business?
A lifestyle business is typically built around the owner’s personal interests and is focused on providing a stable income and work-life balance. These businesses prioritize flexibility, personal fulfillment, and maintaining a comfortable lifestyle. Often, lifestyle businesses are self-funded, have a smaller team, and don’t aim for rapid growth or market domination. Instead, they prioritize maintaining a sustainable business that provides a steady income while allowing the owner to enjoy their life outside of work.
On the other hand, a legacy business is built with a long-term vision of creating a lasting impact beyond the owner’s tenure. These businesses are driven by a desire to leave a mark, build a strong brand, create significant value, and be in a position to pass the baton to someone else, and/or to sell for a profit.
They focus on scalability, investments in innovation, and building a capable team that can carry the torch for generations to come. Legacy businesses typically invest in research and development, maintain a broader market presence, and aim to become industry leaders.
So how do you decide on which path you should take?
1. Personal Goals and Aspirations
Reflect on your personal goals and what you hope to achieve through your business. Are you primarily seeking financial stability and work-life balance, or do you desire leaving a lasting impact and building something larger than yourself?
2. Time Commitment
Evaluate how much time and energy you are willing to invest in your business. A lifestyle business often allows for a more flexible schedule and fewer demands on your time, while a legacy business may require significant dedication and a long-term commitment.
3. Financial Expectations
Consider your financial expectations and how they align with your chosen path. Lifestyle businesses focus on a steady income and maintaining a comfortable lifestyle, while legacy businesses may experience periods of reinvestment and lower profitability initially, leading to higher returns in the long run.
4. Industry and Market Opportunities
Assess the potential growth and future dynamics of your industry. Some sectors might be better suited for a lifestyle business, where market competition is lower, while others may present opportunities for significant expansion and long-term success.
5. Passion and Motivation
Determine your level of passion and motivation for your business. Lifestyle businesses often prioritize personal interests and fulfillment, while legacy businesses require a strong drive to build and leave a lasting impact.
Making the Decision
Ultimately, the decision between a lifestyle or legacy business rests on your personal ambitions, financial goals, time commitment, and industry landscape. There is no one-size-fits-all approach, and each path has its advantages and disadvantages.
Important considerations include determining your desired work-life balance, assessing your risk appetite, and evaluating the legacy you wish to leave behind. Remember that your choice does not have to be fixed; you can always shift gears along the way as your personal and business aspirations evolve. I have seen several businesses move from lifestyle to legacy and some the other way too.
Whether you opt for a lifestyle or legacy business, it’s crucial to make an informed decision that aligns with your personal goals and aspirations. By carefully evaluating your priorities, financial expectations, and industry landscape, you can determine the path that will bring you the most satisfaction and success as a business owner or CEO. Remember, the choice is yours, and embracing either path can lead to a fulfilling and rewarding entrepreneurial journey.
Peter M. Beaumont is the Founder and Principal of ConnXN Consulting and is a Leadership & Organisation Accelerator as well as part of Success Authorities. He is also the author of The Relationship Roadmap, a comprehensive guide to building relationships with strategic clients.