- in Systems by Adam Kreitman
A Lifestyle Business vs. One You Can Sell
This story came out the other day when a friend was interviewing me for his podcast and thought it would be helpful to many of you…
Since I started my business almost 8 years ago, it’s always been about me. No, it’s not branded with my name but, if I were to get hit by a bus, the business is finished.
More importantly (and in a less morbid scenario!), if I ever decided to do something else, Words That Click has very little value to anyone else. Without my involvement I really couldn’t sell it for much.
That last scenario kind of bothered me over the years. If I’m putting in the investment of time, money, blood/sweat/tears into the business, it’d sure be nice to be able to cash out for a nice chunk of change one day if I ever wanted to sell.
This didn’t bother me in the “keeping me up at night” kind of way, but it was just a nagging issue I had in the back of my mind.
A couple of years ago, that changed. I was at a PPC conference and one of the presenters was someone who I’ve respected for a long time and has been involved in building a number of large PPC agencies. One of the things he shared really resonated with me.
He said that when running an agency (and this applies to any business) you have to decide whether you want a lifestyle business or want to build a business you can sell. His take was that you have to choose one or the other because the way you manage things and way you make decisions in each scenario is very different.
That resonated with me because I realized I very much wanted (and had) a lifestyle business. I have two young kids who are growing up faster than I thought possible. Soon enough they’re not gonna want me around as much and I want to spend as much time as possible with them before that happens.
(I remember hearing a child psychologist once say your relationship with your kids is like a bank account… you need to make as many deposits as possible when they’re young because once they hit the teenage years, you’re gonna be making A LOT of withdrawals!)
So I left that conference with my mind much more at ease than ever about my business. I had a lifestyle business that provided a nice income, I enjoyed what I was doing and got to spend a lot of time with my family. All was right with the world.
Well that feeling lasted for about 8 months!!
What changed things was listening to an interview Perry Marshall did with Sam Carpenter, the author of the book Work The System.
While I’d certainly heard others talk about the importance of systems before, none of it had resonated with me like this interview did.
There were a few significant takeaways for me from the interview, but the biggest concerned having to choose between a lifestyle business and building a business you can sell (a topic Perry and Sam didn’t directly address during the interview).
What dawned on me after listening to the interview was the idea that you don’t have to choose. That it’s actually possible to have a lifestyle business while ALSO building a business that has value to others.
And the key to doing that is through implementing systems.
When a business has systems in place – documented procedures that detail how it operates – that adds value to the business. A LOT of value.
Why? Because those procedures become the BLUEPRINT for a prospective owner on how to run the business. The procedures show them, step-by-step, exactly what needs to be done to keep the business running smoothly.
See, creating those documented systems makes the business about the SYSTEMS… not about the owner or any other individual. It’s the systems, not the owner, that are the essential ingredient to making the business run smoothly.
And by creating these documented systems, I’ve managed to keep my lifestyle business while also starting to build something that will have real value to prospective buyers in the future.
I’m about a year into the systemization of Words That Click and it still couldn’t survive for long without me BUT…
It’s much less about me than it was 6 or 12 months ago. And it’s gonna be even less about me in 6 or 12 months than it is today. (Which is a great thing for our clients and for me.)
If you haven’t been able to guess, I’m a HUGE evangelist for using systems in a business.
From delivering better and more consistent service to scaling a business to making the entire business run more efficiently, the benefits of well implemented systems are manifold.
The fact that they can also significantly increase the value of your business is just the icing on the cake!