When lifestyle businesses go out of style

I was reminded this week about the ‘curse’ of the lifestyle business. If this term is unfamiliar, it refers to a business that has been founded and/or run primarily for the purpose of funding the lifestyle of its founders or proprietors.

A lifestyle business is usually one that has been quite successful and has grown well under the care of its founders or managers. When these individuals become comfortable with the quality of their lifestyles, that is when the trouble begins.

Most lifestyles would be horrified to be named as such – denial and indignation can run very deep indeed. However, having a business so that you can enjoy your life is not a bad thing either. It just comes with consequences. If you can honestly accept your reason and the consequences then all is hunky dory.

Here’s my take on what you can expect:

You will protect your lifestyle at all costs…

It makes sense, right? If something threatens your lifestyle then you must push back? In a lot of cases, the threat is not so much someone wanting to take something away, but the business desperately wanting to grow. Every step up in growth carries risk and cost. Lifestyles avoid it like the plague and would prefer to keep it all the same. Bold and necessary moves become near impossibilities.

You will hit a glass ceiling and stay there…

Especially in founder-led lifestyles, the business is only as big as the founders’ expertise and vision of the future. No further past that point shall it grow. And here’s the tough one – hiring experts to help you may not make any difference. What you need is to be held accountable for growth just as any other employee would be. If, as the leader, you are not being performance managed, then you have likely hit the ceiling and may have been bouncing against it for a while. Inviting in new shareholders and/or a board can be tricky. You then have to disclose ALL the money you are taking out of the business to fund your lifestyle. The sum total may shock you and horrify your new investors.

The business will struggle if you are not there…

As lifestyles and their leaders are so heavily intertwined, what usually happens is that the business cannot function if you are not there. Holidays are never fully restful or completely off-the-grid and heaven forbid something should happen to you. I have seen too many cases of accidents and dread disease being the death blow to ‘little engines that could’.

Your team will eventually lose interest…

There is only so long you can expect a team to work tirelessly for no other purpose other than funding your lifestyle. It is just not sustainable. No matter how much money you throw at people, if there is not a compelling reason for the business’ existence, you will have a tough job on your hands keeping your team engaged and in it for the long haul. Your blazing personality might inspire your team to go that extra mile, but that will still not be enough.

So now you might be thinking, what next? The best thing that anyone leading a lifestyle business can do to mitigate these consequences is to find a purpose, promise or reason for being that is WAY beyond making you wealthy and should ideally terrify you. It is a step in the right direction and will require tireless effort to inculcate and bring to life.  If your goal is to leave a legacy that can keep on perpetuating, then consider putting your business at the centre of its universe and yourself in orbit around it.

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