I’ve been thinking a lot about this specific topic: What does business mean? Is it a commercial profitable enterprise that works even without you (the entrepreneur/ owner), as described by many business gurus? Does it have to be scalable, sellable? Do you always have an exit plan or a succession plan? When do you even start to think about all these questions?
Years ago, I met a female entrepreneur who had founded a very successful agency, about 25 years ago. She had grown it to a 30-employee, mid-size, with 5 million turnover in business. She was experienced, knowledgeable, fierce and also “old” enough to start thinking about what to do with her business.
One day, I asked her, “So, what’s the plan?” and she answered:
“You know J, there was never a plan, I loved what I was doing, my motto was keep doing things that I can be proud of and earn enough to never worry about what’s next”.
She has always been a fierce businesswoman; she’s done amazing things and forged excellent growth for her company. She could be considered a bit tough as a leader, but she has this unbelievable charisma, coupled with incredible passion.
She didn’t have an exit plan; she didn’t want to sell her company. She once said to me “If they give me enough money, of course, I would sell it and two weeks later I would open a new one to be their best enemy. My plan is to die at work, my dear, at around 110 years old,” and she burst into laughter.
Today, she is 74 years old, still working and still bringing her agency into international competitions. She still has to work in her business, as no client would stay in the agency more than one year if she left. And it’s true, when she is not around, it’s not the same, and no leader could keep her team together in her absence. If you look at this from all business guru’s perspective: she is a failure as an entrepreneur!
But she loves what she is doing, and her company has always been her playground. Because she didn’t have an exit plan, and because the business could not survive without her, does that mean that she doesn’t have a successful business?
Although this example might seem daunting in terms of what she achieved with her business, the question of defining success remains, even for solopreneurs. If you are a solopreneur and have to work your hours for what you earn, does that mean your business is not successful?
Defining business success
My perspective is slightly different. I believe that the success of a business is defined by 3 main aspects:
The business needs to make money to pay you and other overheads and have enough to comfortably set aside money for further projects.
I always say that entrepreneurs are interesting creatures. They lack sleep, food and can still be operational 500%. But those superpowers wear off with time and when that happens, the best-case scenario is that you no longer enjoy your business, being an entrepreneur, or even the lifestyle that creates. You lose motivation, which impacts your performance and profitability, which puts you in the vicious circle of more work but less income. The worst-case scenario is you burn out.
So, whether you want to stay as a solopreneur for the entire existence of your business or you want to build an empire you need to consider the fact that you have to make it sustainable for you and your eventual team.
3. Your business is giving you the life that you want:
Weirdly, this is the trickiest bit, for many reasons. You can outsmart the first two with systems and existing models. The first two are achievable and pretty straightforward if you are eager to learn, you religiously apply your learning, you work hard and you stay the course.
The roadblock is this third one. Without really defining the life that you want to build for yourself, it is hard to model the business in a way that allows you to make it happen. And without having clarity on this aspect, it is also more difficult to establish the first two parameters.
Why is modelling our lives so difficult?
Steve Jobs said: “People don’t know what they want until you show it to them.” This is not just marketing advice; this is life advice. We don’t know what we don’t know and unless we are helped, or we reflect with honesty and authenticity, we cannot really control our blind spots.
Only once, in my lengthy experience as a coach, have I witnessed a company shift their annual income goals from £50,000 to £1 million, just because they saw that it was possible.
Call it fear, call it comfort zone, call it poor perspective or negative beliefs in one’s own efficiency and capability… Or, sometimes it’s the total opposite, insecurities in life which pushes people to want to earn more, achieve more but without having faced their own reality. This is the main problem. What we think we want, is not always what we really want. From my experience in coaching, I have many times witnessed that the lack of clarity is caused by misalignment between what you think you want, what you might really need, or what you actually desire.
And when it comes to modelling your business around your life, the easiest measure of it all is “money”. Because in business, money gives you flexibility, freedom and choice.
So now let’s look into this from a most pragmatic point of view.
Finding your ideal life-business model
There are 3 ways to approach this entire question of life-business modelling for solopreneurs and micro-business owner:
Your objective here is to measure the size of your potential market opportunity. This means you look at the market with your analytical hat on and try to understand how many people could actually buy what you offer.
Example: You are a VA, specialised in helping sole traders specialised in creative services. There are 4.5 million sole traders in UK. For the sake of the exercise let’s say 1% of them have a creative business, equalling 45,000 in all. Let’s make an assumption that you grabbed just 1% of that market niche – which leaves you 450 traders. Let’s say your average client value is £100 per month – You actually are looking at a £45,000 per month turnover opportunity! Sexy right? This type of goal setting is used in big companies a lot because they have the resources and cash behind to easily deploy their “go to market” strategies and grab that niche audience. In my experience, from a solopreneurship point of view, entrepreneurs get first excited and motivated when they see the potential but very quickly the excitement leaves its place to fear when they think about how to turn that opportunity into reality.
This is your second way of looking at things. You set a perimeter of capacity. Let’s look at our VA example again. Our VA does not want to work more than 35 hours per week and does not want to employ people. Average hourly rate £20 x 35hrs / week x 4 weeks per month= £2,800/ month income – In this model, the only way to increase monthly income would be by increasing the prices, add-on services or products, or creating a side income with referrals.
Above two approaches create at some point friction with your desired life model, because the first one is based on an external push and the second one based on self-limitation.
Need approach: Your main objective is to assess how much income your business needs to generate to give you, your “desired” life model. This is when you need to wear your creative hat or even dreamer hat. You need to set aside time and space to think and do a genuine self-check on what makes you feel fulfilled.
10 essential questions to gain clarity on your “desired” life:
- In my life I often crave… (not rushing when I wake up)
- What would I do if I had no limits on money? (have a Pilates studio and a pool in my house to exercise every morning as I want)
- What would I do if I had no time limitations (learn how to draw, sing and dance)?
- I am proud of…
- I hate doing: (house chores)
- I love doing but cannot do enough (learning stuff)
- My ideal day: (Who is doing what? What are you doing, what are others doing for you)?
- My ideal week (how much you work, what do you do when you work…?)
- My ideal month (how much you work, what do you do when you work…?)
- My ideal year (how many holidays where, with who, how much work, with who?)
Once you answer these types of questions, you will most likely start gaining clarity on what you need to build. The rest is relatively easy, it is a question of turning the dream into a tangible goal: how much does it cost in time/energy and money to build that dream? And you can decide which business model could help you best to build that dream.
I can hear you: “Yeah, right! It’s easier said than done.” I agree. I believe business modelling for solopreneurs and micro business owners is even more difficult than for bigger companies, as they are not based on individual life choices. I believe this type of exercise increases awareness of different options, gives control of the actions and empowers you to make informed choices.
Making these decisions or going through these questions alone might also hinder productivity. This is why we created EMPOWER Tribe: to help women solopreneurs and micro-business owners create and grow sustainable businesses with confidence and joy. This is where the entire community of our AWEsome female founders’ step in and help each other. It’s true that genuine clarity is the only way forward for this purpose.