We’re exploring the ins and outs of business ownership for wannabe business owners who are considering taking the plunge. In part 2 we decided that a good definition of a successful business is…
A self-sustaining entity that allows you to achieve your lifestyle goals.
Defining Your Lifestyle Goals
What lifestyle do you want your business to provide? As I shared in part 1, some people fantasize that business ownership will allow them to be waited on hand-and-foot on the French Rivera, which I refer to as “gentleman farmer’s syndrome.” Fair warning: Maybe you can achieve that goal after retirement, but failing to actively oversee your business while you own it means your business will almost certainly fail!
Even big business is not immune from this fact of life. A good example is Lee Iacocca when he moved from the #2 spot at Ford to assume the chairmanship of Chrysler Corporation. He first focused on rescuing the troubled automaker by bringing out the K car (remember the K cars?) and introducing the mini-van (originally a Ford concept that Ford didn’t feel there was a market for). His efforts were successful and Chrysler was able to pay back their government loan in full, ahead of schedule. In fact, the federal government actually made money from the first Chrysler bailout.
But even a corporation as large and talented as Chrysler suffered while he was later distracted in the 1980’s by traveling to raise funds to restore the Statue of Liberty. Chrysler lost market share during that period that it never regained. Without the captain guiding the ship it wandered off course and again required a huge effort to just avoid disaster.
Get rid of any visions (hallucinations?) that you have of creating a business that would support a gentleman farmer’s lifestyle. It’s the road to financial disaster. Successful businesses always have active owner involvement and oversight.
Your Goals May Change
In reality, lifestyle goals vary widely and may change over time. Some may want to make huge sums of money, but others might place a higher priority on having a flexible work schedule, or not having to work backshift or weekends or holidays. Still others really desire a business that creates intellectual stimulation (think Steve Jobs of Apple Computer) or positions them in the spotlight as a community leader. And others might want control of their calendar so they can be at Parents to Lunch with their elementary school child or be able to ramp down their calendar during the summer months when the kids are out of school.
The point is that you may value one or more of these attributes above making large sums of money. Craft YOUR reason for wanting to be in business. Don’t simply adopt someone else’s.
Still have the “itch?” Employees, franchise owners, and entrepreneurs all think differently. In part 4 we’ll explore how employees think differently from business owners.