Breaking through the lifestyle business brick wall!
Many entrepreneurs start their business through unplanned circumstances, and often set off without a plan, just working very hard and caring about their clients, and wanting to please. This can go on for many successful years and ultimately the entire lifespan of the founders, offering them a fantastic lifestyle and inner fulfilment carrying out the career they love, whilst sharing their knowledge to the next generations. Stepping up to the next level, the mid-tier, can be a challenge, business coaching will help, but it will not be able to predict the exact journey, it will also not be able to predict how you prioritise your growth and how you cope at the different stages, so I thought I would write down the 4 principles (in no particular order) that got us from 2m-5m in 3 years without any external funding. The caveat is you need to have the basics covered, service, quality, and value, but thereafter, this is what I’ve learned over the last 3 years.
People – Your team is the only way you will make this happen. But it’s not linear, it is not as simple as assuming you will need twice as many people to get twice as big. The reality is that you need new infrastructure, assuming you already have good foundations, the next step is to invest in a senior team that can essentially run the whole revenue side of the business, empowering them to recruit, grow and engage talent at all levels. This is not an overnight process, it’s also a moving landscape, as well as unpredictable. One key thing I learned is that your business is not for everyone, and if people want to leave, you have to accept that and move on, regardless of time and investment, sometimes for whatever reason the fit just isn’t there, it’s just not right, and you will save yourself a lot of anguish by accepting the reality as it happens. But when you have your senior team positioned and confidently making decisions, the business becomes a different animal altogether, you have more time to do the things you enjoy and add more value than you ever could before, whilst revenue is growing, as well as working on the culture to ensure your people want to stay and grow together.
Clients – You can’t do it without amazing clients, simple as that. Client relationship building is a cornerstone of every successful business, and that mindset must continue. For this reason, it is wise to share your plans with them, as things will change slightly as you scale, you may alter your brand slightly and update your vision, your team will grow so ensure they will not be surprised by new introductions, your comms will change and it is important that they know why and continue to trust you. They will have fears, such as capacity and consistency, so regular check-ups are a good idea so that all expectations are on the table and targets are measured and reviewed on an ongoing basis, but with more resources, more senior people, and improved access to international markets, there are many benefits to their existing relationship. You will also pick up a lot of new clients, so you must ensure your team has the energy to bring them on board, just as enthusiastically as you did in the early days. A lot of moving parts, so you have to have the right leader (this wasn’t me in our business) who can orchestrate the strategy in a positive way and inspire talented people who share the company vision to want to join you in the first place then settle in and continue to deliver world-class client service.
Cash – Pretty obvious right? But actually, when you are a lifestyle business and have gotten to a million or 2 over many years without significant changes to your day to day, you can become a bit numb to how important cash is. But when you step change and set off after aggressive targets, the cash can run out very quickly which can cause a lot of stress and take you back to the feast and famine sensations of the early days of setting up your business, so watch your cash, have a cashflow that can see clearly ahead for at least 2 months and then sensible predictions for up to 6 months.
Innovation – This is your differentiator, and the tricky balance required is that it requires people, clients, and cash, all readily available and engaged to succeed. But when it does, your business will grow safely, this is because your clients are getting what they need with the knowledge that you are innovating for them, and with that comes new opportunities and an increased pipeline. Innovation comes from two things, firstly asking the right people the right questions than delivering the right solution, for this to happen often, you have to instil a growth mindset, where your team is never nervous about asking a question, there has to be no such thing as a stupid question, and the solutions will just keep coming. Secondly, you need to empower your team that they can try new things without consequence, if they have an idea, they can try it out, if it works great, if it doesn’t work, we learn and tweak if necessary, or move on, failing fast is the greatest way to develop your ways of working and improve your client experience.
It’s all a bit chicken and egg, and there is various rationale for the order you chose, possibly dependent on the type of start-up you are at the very beginning, some people wear all the hats for a long time (me) and remain lifestyle for many years, others can be ready for growth right from the offset, but either way, it’s good to remember these points as you are spinning all your plates:
- People – Without great people there will be no clients
- Clients – Without great clients there will be no cash
- Cash – Without cash there is no business
- Innovation – Without innovation there is no progression
So, there you have it, our last 3 years in a nutshell, and I know it will be different for all businesses, but the principles can be adapted to suit. Good luck to all that are trying to break through the brick wall that stands between lifestyle and mid-tier companies, and congratulations to all those who got through. Our next journey will be understanding and navigating to 10m, even tougher I’ve been told, onwards and upwards!