In this episode of Agency Leadership TV, Chip Griffin explains what a “lifestyle business” is — and why you shouldn’t think of it as a derogatory term. At the same time, it should help you think about what you want to achieve with your own agency so you can make smarter business decisions yourself.
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When I first heard the term lifestyle business, I was frankly a bit insulted. It was a conversation I was having with a business consultant that I was interviewing about 15 years ago and what he was trying to get at was, was I building a business that I was looking to exit or was it a business that I was building simply to sustain my own lifestyle? Now in my own mind, I was building something that I could exit with, but I understood as I walked through the conversation with him that I was consistently making decisions like taking out profits and things like that, but suggested perhaps it was really more focused on supporting the lifestyle that I’d become accustomed to. Now that’s important to understand when you’re building your own business, whether it’s an agency or anything else, you need to know what it is that you’re trying to achieve, and so frankly, at some level, every business is a lifestyle business.
It’s just a question of what your goals and objectives are. So when you’re talking about a lifestyle business, when someone typically uses that term, what they’re suggesting is that you’re trying to. You’re putting an almost an artificial cap on your business. You’re saying, look, I only want to work a certain number of hours a week or certain hours in the day, or I value my flexibility of scheduling over, uh, you know, a growth or perhaps it’s more about putting profits into my own pocket, then reinvesting in future growth, but with less money in my own pocket today. There’s a lot of different things that you can be talking about when you’re talking about a lifestyle business, but ultimately what I would suggest is that every agency owner needs to understand what it is that they are trying to achieve and think about that in terms of the next six to 12 months, but also think about it over the next three or five years. What is it that you want to do? Do you want to have a large team? Do you want to grow as fast as you can and sell to someone else? Or are you content to have a network of freelancers that simply helps you sustain the trips and vacations that you want to take? That it helps put your kids through college? That helps give you the car and home that you want. What is it that you’re really trying to achieve, and if you understand that you’ll be able to make much smarter business decisions going forward.