Looking back on my career, I notice that when I started working for someone I developed a Business Mindset. When I left the corporate world I moved first into a Lifestyle mindset and now very much into a hobby mindset.
Here are some key differences between the mindset and future for hobby, lifestyle and business.
The Hobby Mindset
This is a business where everything is fluid. There is little in the way of systems, procedures, structure or focus. The purpose of the business is to feel fulfilled and balance enjoyment with doing meaningful work and contributing to your community or the world around you. Hobby business owners can work 24/7 but when they do, it is because they get rapt up in the business and the joy in what they are doing.
A hobby business owner is rarely doing things for the money. Often they are reluctant to charge although they do get grumpy when people refuse to value what they offer. They bring passion, commitment and energy to the activities as long as they are enjoying what is happening and the doing makes them feel good.
This type of mindset has no major systems and is unsaleable or transferable.
The Lifestyle Mindset
The lifestyle mindset business has some structure. It has systems to build relationships, retain clients and service others. It can employ staff but its primary purpose is to provide the owner with sufficient income to live a particular lifestyle and use their talents, experience, skills and interest to earn that income.
Lifestyle businesses understand that they must get paid for what they do. They often employ people to help them grow but generally everything they do is about earning enough to live the life they desire. They have a vision/purpose and they work to fulfil that objective.
Since the business is built on their reputation, it can be difficult to sell but there will be a client base and systems in place, just no guarantee that the customers will stay once the owner/creator is gone unless they have duplicated themselves and clients accept the duplication.
The Business Mindset
Many of the features of the hobby and lifestyle business are at the core of the business mindset but the biggest difference lies in the fact that the business creators want to create something with a life of its own. Systems, relationships, stewardship are all required to create this independent entity. Ensuring that the business is not based on one person’s knowledge or skills is critical.
To survive the business must be independent of any one individual
More it needs to bring diverse thinking on how to achieve the purpose behind the organisation.
A business mindset starts with purpose.
It starts with what is in it for the staff, the shareholders, the stakeholders and the clients. It creates a culture that maintains values that serve the community. It provides sustainable futures and ensures that all involved with the business understand what it is truly about.
A true business meets many needs and has a transferable value.
Being aware of these 3 mindsets can help you sell or buy a business.
Acknowledging that purpose, motivation and client reactions are different for these 3 types of business ensure that if you buy or sell a business you give and get value.
Accepting that all businesses are not created equal and that knowing the differences above and beyond the figures is critical to what happens next.
Appreciating the differences and your objectives in buying or selling is important to your future
And taking action that will create the future you want is important. Sometimes that action is to learn more about yourself and the business and we recommend you use the questions in Buying a Business or ask for help from a generalist who understands the difference between the three mindsets.
What is your mindset. Share your thoughts below.