Most small business owners reach a stage in their business where they are comfortable with the income, workload and stress levels.  They tend to park the business there so they can better experience other aspects of their life; like family and travel. At some future point, they may resume growing or decide to exit the business.

There are steps you can take to convert your business plans to be optimized for a chosen lifestyle

We cover how to tune your business for a great lifestyle here

Lifestyle Goals

The actual Goals of owners at this business life stage will vary but are generally;

  • have an adequate income to support the lifestyle
  • do more of what they enjoy and less of what they don’t like about their business
  • have acceptable and manageable stress levels for the workload and uncertainty of running their business and
  • the freedom to do other things like travel knowing the business can continue operating

Let’s look at each of these Goals in more detail

Earning Acceptable Income

What constitutes an acceptable income will vary from owner to owner so we leave that as a personal decision.

What you should remember is that, as soon as you stop growing you start to shrink! 

Inflation in wages, rents and inputs will eat into your profit margin so you need a “preventive care regime” to ensure you periodically re-tune your business to maintain a desired profitability.

We use the term “optimization” to refer to this re-tuning process.

We have grouped our resources on optimization into our Business Optimization Resource Catalogue.  We encourage you to use this resource to maintain a healthy profit level.

Managing Stress

Stress comes about from things that move out of a steady-state and lead to uncertainty and unfortunate consequences.  Collectively, these can be called “risks” and there are routines you can adopt to manage them and keep them within acceptable bounds.

If you would like to learn more on Risk Management, we have a blue belt article on How to Build Risk Management Systems you can read.

Here is a general checklist to get you started on risk management to reduce your stress;

  • new competition will impact on your business
  • technology changes will impact how you work and what your customers look for and expect.  Don’t become outdated.
  • if you have a number of staff, an unexpected loss of a person with a key skill can impact.
  • key ratios like Gross Margin Ratio and Overhead Ratio can be easily calculated and monitored to ensure creeping inflation is not impacting your profitability
  • boredom & complacency can be a problem once the adrenaline rush induced by growth wears off.  Operations might start getting sloppy.
  • inevitably you will loss some customers over time (called “Churn”).  If these are not replaced, your profits will go into terminal decline

Manage these by building a system to monitor company performance so you know when things are getting serious.  Remember that many changes will be small and easily overlooked but eventually can become major and disrupt your lifestyle.

Freedom to Enjoy your Business

While growing, you have to be constantly on alert and have to do a lot of things in your business that you don’t particularly enjoy.  Once you switch to the Lifestyle Phase, you can;

  • establish and optimize routines for many of the operations in your business that others can run.  So they require less of your time and focus freeing you up for the things you prefer doing
  • if you develop written or video Standard Operating Procedures (SOPs) for routine task, more junior (and cheaper) staff can execute them consistently well thereby reducing costs and the demands on your time training and monitoring
  • a larger business can afford a Chief Operating Officer (COO) who supervises routine operations taking that task off your back.  The popular Entrepreneurial Operating System (EOS) in Gino Wickman’s book Traction shows how to set up such a system
  • this delegation also frees you up to spend more time doing the parts of your business that you really enjoy.  This includes the “day dreaming” or visionary role that got your business to this Lifestyle Phase to begin with

Live a Little to Celebrate your Business Success

Most business founders reach a point in the life of their business where that want to slow down from headlong growth and have more time to enjoy family and other pleasures like travel.  

You can to but be careful you set your business on autopilot with the tips above so it doesn’t start sliding backward when you take your eye off the day to day.

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