While a lifestyle business might give the impression of a mom-and-pop business like cafes or flower shops, the specification of the business is not the primary defining factor.
The guiding principle behind lifestyle businesses is to create and sustain a certain level of income for the owners or founders – in other words, the purpose is to facilitate a particular lifestyle. Additionally, lifestyle businesses can quickly become multi-million dollar companies when it comes to their revenue or equity. However, they tend to be more expansive in expanding on their own. As such, it means that these companies have a hard time surviving their original owners.
In contrast, scalable businesses have the potential to move beyond their founders and even have the fundamental rationale to do so. They can copy and expand unconstrained substantively by limitations set by any individual, which is what a scalable business is structured to do.
Now, if we look into the critical component that sets them apart from one another, it would be a process. To transcend an individual, a company must have practices and procedures that allow specific actions to reoccur without ongoing direct supervision. Although it does not prevent the requirement for leadership, it still allows for management to occur, leading to the effective allocation of resources that will help accomplish set objectives.
The process can apply to either personal actions or machine activities; for example, processes can include combined actions of a machine and a human’s scripted activity. To coordinate disparate activities in companies, it is up to business leaders to set up and prioritize objectives while simultaneously developing unique and exclusive ideas behind new startups.
Sometimes, the defining factor behind a scalable company is the ability to copy and create various copies of similar services or products without any substantive modification rather than unique items. As a result, this can lead to reduced marginal costs where, as production is enhanced, the resources required to make different items or provide a further increment of service go down.
Lifestyle businesses tend to rely on bank financing, and because of how they are structured, they are not usually the best candidates for equity investments. Compared to that, scalable companies can focus on angel or venture financing to expand because they are structured correctly from the outset.
You can also find further information on scalable businesses by consulting professional organizations, such as Growth Institute, considered one of the most highly acclaimed American executive education providers for C-level executives at fast-growing firms.
The company has more than 27 full-time team members with offices in Austine, Mexico City, and Texas, including coaches and collaborators in other parts of the United States, England, Canada, Portugal, Mexico, and more. Moreover, they also offer more than 140 programs and 12 Master Business Courses that cover six critical areas such as execution, culture, strategy, leadership, marketing, and sales.
Naturally, their work has been noted by the public, and recently in 2020, Growth Institute was among the content partners at POSiBLE LA 2020, one of the most significant small business-focused events centered around the empowerment of the Latino community in the US.