Scaling Your Lifestyle Business To An Exit (Without Losing Its Soul)
Today, we're embarking on a balancing journey every small business owner knows all too well: scaling your revenue while masterfully navigating the challenges of growing a team.
The Balancing Act
Aiming for the $2 million revenue mark positions your business attractively for sale. Hitting that goal is a result of taking deliberate actions to grow. With growing comes the challenge of expanding your small team. Which can stir up some fears, of losing your freedom and changing the core identity of your business. Will it still be a lifestyle business? Or will it morph into a beast that no longer gives you joy? To quote Dan Sullivan from his book Who Not How:
“It takes vulnerability and trust to expand your efforts and build a winning team.”
Now, let's shift our focus to a critical element of scaling.
Growing Revenue Wisely
Increasing your business's revenue is vital, even when you don’t plan to sell it. Hitting revenue milestones is not just about the ego game but also about the opportunities it brings. Here's how to approach revenue growth wisely when you have a lifestyle business:
Double-down on Simplicity: Avoid over-diversifying. Instead of expanding your portfolio of services and products to increase revenue, reduce the amount of offers you sell. Every offer you stop selling means you simplify your marketing and reduce its costs. Say goodbye to complexity and hello to scaling with ease.
Explore New Markets: Expand your client base, but do so with a calculated approach. Avoid entering areas that don't align with your brand.
Stay True to Values: Ensure the growth strategy you implement resonates with your core value of freedom. As your team grows, don’t add weekly meetings blocking your calendar. Add team retreats because they are fun, have no office so people can work from their favorite places and install shorter workweeks. See how joyful it is to grow your revenue.
Growing your revenue isn't just about making more sales. It's about making your business stronger and more flexible. Scaling revenue, whether through simplifying your portfolio or expanding your market adds a layer of security to your business. However, the goal is to scale your business but not to stray from its soul.
Moving on to another crucial aspect of scaling your business.
Hiring Without Losing Freedom
Expanding your team is a significant step in scaling your business. However, it brings its own set of challenges, particularly in maintaining the soul of your business:
Cultural Fit is Key: Dedicated team members can help you scale without burning you out. But make sure you hire individuals who not only possess the necessary skills but also embody your values. In my experience, focusing on cultural fit during hiring has been a game-changer for maintaining the essence of my business. The right people are the ones who can turn your ideas into more money.
Utilize Systems: Effective tools can alleviate the burden of team expansion. Invest in developing procedures and implementing software to streamline onboarding, training and operations, allowing you to maintain oversight without micromanaging. In his bestseller ‘Clockwork’, Mike Michalowicz writes: “Working on your business is about building systems. Period. An entrepreneur is someone who builds systems to deliver solutions through other people.”
Don’t Hire for Potential: hire based on proven skills, not just potential or cultural fit. This saves time and resources in training and development.
Be Strategic about Hiring: Approach hiring as you would any other aspect of your business - with foresight. Think about how you will structure your team (read Traction, by Gino Wickman on how you can structure it), how people’s long-term growth trajectory looks like, what you will pay them now, and how people’s salaries change based on goals.
Expanding your team is about bringing together a group of incredible people who not only work well together but also share a common vision. This is where your value of freedom can truly shine. Imagine having a team that not only gets the job done but also shares your vision for freedom and creativity. How would that transform your business?
To illustrate these principles in action, let's look at the real-life success story of Dan.
Success Story: Dan Andrews’ Journey
Dan’s story is an inspiring example of achieving this balance. Together with his partner, he grew his annual sales in the millions and recruited a team of 15 along the way.
“Our business also afforded us flexibility. We traveled often and ran the business remotely.”
In the summer of 2015, they signed the papers on a deal that meant a life-changing sum of money for them. If you are thinking of your eventual exit, his book “Before the exit” is worth your reading time.
Reflect and Act
As you ponder your own business's growth, consider these aspects:
Audit Your Offerings: Take a day this week to review your current products and services. Identify which ones align with your core values and are most profitable. Consider phasing out those that complicate your business or don't resonate with your brand of freedom.
Create the Blueprint for a Freedom-Centric Team: Draft a plan that outlines your ideal team structure, keeping freedom and flexibility at its core. Include aspects like remote working policies, flexible hours, and team-building activities that align with your values. Set a timeline to implement this blueprint, starting with your next hiring process.
Remember, the goal is to scale up without losing your business’s soul. By focusing on these actionable steps, you're not just thinking about growth; you're actively shaping it in a way that preserves the soul of your lifestyle business.
