Do You Want a Lifestyle Business or a Legacy Business?

There are millions of businesses in our country. Most of them will never go public or crack even $10 million in annual revenue. But that does not mean that they are not successful. They make it year to year. They pay their employees, satisfy their customers, grow either a little or a lot and sometimes go backwards. The owners have two choices: either continue to run it to support their lives and their lifestyles or run it to become a firm they can pass on to their children sell to their employees directly or through an ESOP or sell it to a competitor or company that wants to move into their market niche or geographic territory.

Both of these options-lifestyle or legacy- are correct as long as the owner can keep some harmony between the vision they have for their personal lives and the one they have for their company. In fact, it could be possible for an owner to look at their business as one type during a part of their lives and then look at it the other way as their circumstances change. Anyone who owns a business and has a family is well versed in the tug of war between being in the family and owning a business. So be clear about the life you want for the next 3-5 years at least and run your business accordingly. Or, resolve to be focused mostly on either your personal life or the business and accept the tradeoffs that you have to make as a result.

But, whichever mode you are in, keep an eye on building the value of the business. Whether you are going to sell it or not, a more valuable business is very often one that is very well run and vice-versa. For more on what you do to build value in your business read Building Business Value by Martin O’Neill.