Your business started with an idea and a business plan.
When you created your business, did you give thought to what type of business you wanted to start: scalable or lifestyle? The purpose of the business tends to differentiate its structure.
With a lifestyle business, profitability is the focus. There is less emphasis on fast growth versus slow incremental growth. The founder takes a less aggressive approach to profitability. The quality of life is important to the founder. She desires more flexibility and work-life balance. The founder wants the ability to pursue other interests, like travel. Many lifestyle businesses generate seven-figure profits (or more).
Scalable businesses are focused on rapid growth. They have the potential to move beyond their founders and are structured to do so. The one key element that differentiates the lifestyle from a scalable business is process. A business must have practices and procedures that are repeatable and measured. A scalable business has the ability to replicate copies of a similar product or service without major changes.
Funding capability is different between the two. A lifestyle business depends on bank financing. In contrast, a scalable company focuses on angel or venture financing in order to grow.
Which one are you?
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