Latest / Productive and Paid with Jamila Payne / How to Build a Lifestyle Business vs a Scalable Business

Transcript

How to Build a Lifestyle Business vs a Scalable Business · Productive and Paid with Jamila Payne

0:07
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) What if the business you've worked so hard
0:10
to build has actually been the thing keeping
0:13
you stuck?
0:14
Not your mindset, not your offers, not your
0:17
prices.
0:18
The structure.
0:20
Because here's what nobody's telling you when you
0:22
get started in businesses.
0:24
What if the business you've worked so hard
0:26
to build is actually the thing that's keeping
0:28
you stuck?
0:29
Not your mindset, not your offers, not your
0:32
prices.
0:33
The structure.
0:35
Because here's what nobody's telling you when you
0:37
start.
0:38
There are two very different businesses that you
0:42
could be building.
0:43
And most women never consciously choose between them.
0:48
They just keep working, keep showing up, keep
0:51
delivering, and then one day we look up
0:54
and realize I'm exhausted, I'm booked out, and
0:59
if I stop, so does everything else.
1:03
Today we are going to change that.
1:06
Now, if you're new here, welcome.
1:08
I'm Jamila Payne and I've spent over a
1:10
decade helping women entrepreneurs stop trading time for
1:14
money and start building businesses that actually work
1:17
for them.
1:18
Today we're getting into a topic that I
1:21
wish someone broke down for me years ago.
1:25
It's the difference between building a lifestyle business
1:29
and building a scalable business.
1:31
Now let me guess, your calendar is full,
1:35
your brain feels fried, and even on the
1:38
days off your mind is still running with
1:41
details about your business in the background.
1:45
But here's the reality that I found.
1:48
We haven't really made a decision about what
1:53
kind of business that we want to build
1:56
and we just wake up one day, look
1:58
around, and realize that we might have built
2:02
ourselves a really busy job instead of a
2:05
business.
2:06
And I don't want that for you.
2:08
I want you to sit with that for
2:10
a second because it might be more true
2:14
for you than you realize, literally.
2:16
So there are three signs that you might
2:19
already be running a lifestyle business even if
2:24
you don't plan to.
2:27
So basically, when I said there's two types
2:30
of businesses that you might be building, what
2:33
I mean is a lifestyle business or a
2:36
scalable business.
2:38
So here are some signs, three signs, that
2:41
you might be building a lifestyle business.
2:46
Your income is directly tied to your calendar
2:49
and if your calendar clears, your cash flow
2:53
drops.
2:54
Right?
2:55
No revenue coming in.
2:57
Or you are the product of your business,
3:00
almost like you're selling yourself, your time.
3:02
Your clients aren't buying your company or your
3:07
business.
3:07
They're buying you.
3:09
Right?
3:09
Your voice, your hands, your time.
3:12
And as much as that feels like a
3:15
compliment, it is also a capacity ceiling for
3:19
your business.
3:20
Or it might be that you haven't taken
3:23
a real vacation in over a year.
3:25
Not because you don't want to, but because
3:28
you genuinely do not trust the business to
3:32
run without you watching it.
3:34
If any of those hit close to home,
3:37
that's okay.
3:38
It's just good information because awareness is the
3:42
key.
3:43
So that's what we're unpacking today.
3:45
The real difference between a lifestyle business and
3:49
a scalable one.
3:51
What it means for you in terms of
3:54
your day-to-day operations in your business,
3:56
your decisions, your freedom, and yes, your peace
4:00
of mind.
4:01
So by the end of today's episode, you're
4:05
going to know which type of business you
4:07
actually want.
4:09
You're going to know how your strategy and
4:12
CEO decisions change based on that choice.
4:17
You're going to understand how the shift from
4:19
I work on my business to my business
4:22
works for me.
4:24
All right, so let's go ahead and get
4:27
into it.
4:28
I want to start with the basics.
4:30
Okay?
4:30
So a lifestyle business is essentially that.
4:34
It's designed to support your life.
4:37
You basically build the business around your income
4:42
goals, your schedule, and your personal preferences.
4:45
You are the engine that drives the business.
4:48
You might still be hands-on with clients.
4:51
You make good money and you call the
4:53
shots.
4:54
Essentially, the business is deeply personal for you,
4:57
almost like a creative extension of who you
5:00
are.
5:01
But this also means that the business runs
5:04
on you, your energy, your presence, your health,
5:09
or lack thereof.
5:11
And if you stop, then things slow down
5:14
in the business.
5:15
I have definitely been in this position.
5:20
Then let's talk about a scalable business.
5:22
On the other hand, right, is built to
5:26
grow beyond you.
5:28
It's designed to multiply revenue without multiplying your
5:32
personal time.
5:34
It can run with or without you as
5:37
the owner or founder of the business.
5:40
It's designed to multiply income without multiplying your
5:43
hours.
5:45
You install systems, you hire people, and you
5:47
create repeatable ways to deliver value.
5:51
It's the difference between being a service provider
5:55
who does the work and being the CEO
5:58
who built the system that does the work,
6:02
or the system that actually makes sure that
6:06
all the work gets done.
6:08
Both models can absolutely make money, but one
6:13
buys you freedom while the other buys you
6:17
long-term wealth and legacy.
6:21
Now there's no wrong answer, lifestyle versus scalable.
6:25
The key is making sure that you're choosing
6:28
consciously.
6:30
So I want to invite you to think
6:31
a bit like this.
6:33
A lifestyle business, like a local yoga studio
6:39
where the owner teaches every single class and
6:44
knows every single client by name.
6:46
A scalable business might be more like SoulCycle.
6:49
The customer experience is the same no matter
6:53
which instructor or location you walk into, even
6:57
though you may have your favorite instructors.
7:00
A lifestyle business might be your favorite local
7:03
salon where the owner still does every client's
7:08
hair herself, whereas a scalable business is Drybar,
7:12
right?
7:12
Same blowout, same experience, no matter which location
7:16
you visit.
7:18
Neither is better.
7:20
It's about what you want.
7:22
Do you want freedom and flexibility right now,
7:25
or do you want long-term wealth and
7:28
legacy later?
7:30
So let's zoom into your week for a
7:32
second.
7:32
And I want you to imagine that you
7:35
start your Monday fired up, you got coffee
7:39
in hand, your inbox is full, you're juggling
7:41
clients, content, invoices, and maybe even a launch.
7:46
It feels productive, but by Thursday, you are
7:50
mentally wiped.
7:52
You can't remember the last time you started
7:54
your morning without checking Slack or replying to
7:59
an onslaught of emails that feel like they
8:01
appeared in the middle of the night.
8:02
Okay, does anyone else have an inbox like
8:05
that?
8:05
Because I sure do, right?
8:07
The business is doing well, but you feel
8:11
wired and tired.
8:13
That's a lifestyle business in motion.
8:16
You're the heartbeat, but you're also the bottleneck.
8:20
Now picture this instead.
8:22
You wake up Monday morning, you check your
8:25
dashboard, sales came in overnight.
8:30
Clients were served while you slept and your
8:32
team handled a few hiccups before you even
8:36
opened your laptop.
8:38
You still lead, but you're not needed for
8:40
every single task happening in the business.
8:44
You have space to think, to rest, to
8:47
create.
8:48
That's what a scalable business feels like.
8:51
It runs on systems, not stamina.
8:54
So here's where the difference really shows up.
8:58
It shows up in how you operate your
9:01
day to day.
9:02
If you're building a lifestyle business, you might
9:05
personalize every single client experience, be deeply involved
9:11
in delivery or providing the services to your
9:14
clients, keep operations lean and simple, focus on
9:19
cashflow and lifestyle income over growth.
9:23
If you're building a scalable business, then you're
9:27
thinking bigger.
9:28
You will document systems so that others can
9:31
deliver results.
9:33
You will hire or license people to do
9:36
what you do.
9:37
You will build a brand that stands on
9:40
its own.
9:41
You will focus on recurring revenue in your
9:44
business and long-term growth.
9:47
And I just want to reiterate, right, like
9:49
there is no wrong answer, but what I
9:54
really want you to take away is like,
9:58
am I choosing, have I chosen, or am
10:02
I just kind of going in one direction
10:04
because I think that's the way to go,
10:08
or I was just building in this direction,
10:11
but that's not actually what I want.
10:14
Now, according to the Harvard Business Review, scalable
10:18
companies grow revenue 20% faster on average
10:22
because they have process-driven operations.
10:26
It's not because the owner works harder.
10:31
So this whole idea of a lifestyle business
10:35
versus a scalable business has been on my
10:38
mind a lot lately.
10:39
I have been thinking about what's next for
10:42
my business.
10:44
You know, what are the, you know, next
10:46
three or five years of the company look
10:49
like?
10:49
And I'm seeing how lifestyle mentality shows up
10:55
in conversations that I've been having with clients
11:00
where clients are saying things like, this is
11:03
what I want to do, right, versus this
11:06
is what my clients desire, or this is
11:09
what's best for the clients.
11:11
Or I hear clients saying things like, I
11:13
don't want to do this kind of work
11:15
anymore, versus I don't have to do this
11:18
work anymore, but my company can do this
11:21
work.
11:22
Over the last few years, personally, for me,
11:26
I have experienced a significant amount of health
11:30
challenges.
11:30
Everything from being in a car accident to
11:34
having tendinitis, anxiety, parasites.
11:38
I mean, the universe keeps serving, okay?
11:41
You know, geez, it's been a lot.
11:42
And some of these things I have overcome,
11:45
but it definitely made me slow down.
11:49
And when I did, I realized something really,
11:52
really uncomfortable.
11:54
I didn't feel like I could stop working.
11:59
Although at times, I deeply wanted to just
12:02
take care of myself.
12:05
But when I stop, the money stops too.
12:09
And so I thought, how did I get
12:10
here again?
12:12
You know, I've had seasons in my business
12:14
where I've built teams, I've trained other coaches,
12:18
I had support to keep things running.
12:20
And in those seasons, I could take time
12:22
off, I could focus on my health, I
12:24
could travel, I could breathe.
12:28
But when I scaled things back, and it
12:31
was just me again, I was back in
12:34
this trap.
12:35
It reminded me that freedom isn't found in
12:40
doing it all yourself.
12:42
It's found in designing a business that keeps
12:45
going without you.
12:48
That's the conversation that we don't have enough
12:51
as women's owners.
12:53
We say that we want freedom, but we
12:56
build businesses that rely on our 24-7
13:00
presence.
13:01
And before we go any further into this
13:04
episode, I want to give you a permission
13:07
slip.
13:08
Because I've noticed something with the women that
13:11
I work with, and I've noticed this with
13:13
myself as well.
13:14
And we say that we want to scale,
13:18
we want a growth type business, or we
13:21
say that we want freedom.
13:24
But deep down, there's a quiet voice that
13:28
says, but is that too much?
13:30
Am I being greedy?
13:32
What will my clients think if I'm not
13:35
the one doing all the work if they
13:36
don't get me?
13:38
Or this is a really popular one.
13:40
I don't know if I can get the
13:42
same results for my clients if I'm not
13:44
doing the work.
13:46
So let's be clear about something.
13:49
Wanting to scale or grow your business is
13:53
not abandoning your clients.
13:56
It's not selling out.
13:58
It's not losing your personal touch.
14:01
And I'm going to tell you, I used
14:03
to have those beliefs until I built my
14:06
business in a way that I found out
14:09
that they were absolutely not true.
14:14
It was 100% possible for me to
14:20
grow the business and also be able to
14:22
have support coaches and have my clients serve
14:28
really well.
14:29
Scaling your business or having support is the
14:33
most responsible thing that you can do for
14:36
your clients, for your family, and for yourself.
14:39
And let me just be clear, because I
14:41
said scaling your business, whether or not you
14:43
decide to scale, having other people that can
14:49
manage the client delivery besides you is one
14:53
of the most responsible things that you can
14:55
do for your business.
14:57
And the reality is you cannot pour from
15:00
an empty cup.
15:01
You cannot serve anyone from a place of
15:05
burnout, resentment, or exhaustion.
15:10
Scaling isn't about doing less because you're a
15:14
lazy person or don't want to be bothered
15:16
with your clients.
15:17
That's not what I'm talking about.
15:18
There are business owners like that, like let's
15:21
be real.
15:22
They don't want to be bothered with their
15:24
clients.
15:25
I'm not talking about that.
15:27
What I'm talking about is building something sustainable
15:32
so that you can keep showing up, you
15:34
can keep creating, you can keep leading for
15:37
the long haul of your business, not just
15:40
right now.
15:41
And you're allowed to want more.
15:43
You're allowed to want to build bigger.
15:46
You're allowed to step back and still get
15:49
paid, right?
15:50
Like not have to be on all day,
15:52
every day.
15:53
That's not greedy.
15:55
That's smart.
15:56
And that's CEO thinking.
15:58
All right.
15:58
So permission granted, okay, if that's the direction
16:02
that you want to go in.
16:05
Now let's talk about how.
16:08
Your CEO decisions also change depending on your
16:13
business model.
16:15
In a lifestyle business, you make decisions based
16:18
on what feels good right now.
16:20
Your filter might be, will this allow me
16:23
more freedom or will this stress me out?
16:26
In a scalable business, your decision shifts to,
16:30
will this make the company more valuable, more
16:33
sustainable, or more transferable?
16:36
If you start asking questions like, can this
16:39
run without me?
16:41
Could I hire someone to do this?
16:43
Would an investor care about this metric?
16:46
That's a mindset shift from cashflow thinking, right?
16:50
Which is what a lifestyle business is more
16:53
focused on to asset level thinking.
16:56
I'm building something bigger than myself.
16:59
So many women unintentionally create self-employment.
17:04
We want freedom.
17:05
We want flexibility.
17:07
We want fulfillment.
17:09
But what we often end up with is
17:12
being chained to our laptops.
17:15
If you are the salesperson, the marketer, the
17:18
operations manager, the all-in-one, then the
17:22
business is too dependent upon you.
17:25
And I'm saying that this is true.
17:27
Even if you want to stay a lifestyle
17:29
business, I want you to think about these
17:31
things.
17:32
This is not freedom.
17:35
This is dependency.
17:37
The difference between a job and an asset
17:42
is this.
17:43
A job relies on you, whereas a business
17:48
asset relies on systems.
17:50
A business asset keeps producing value even when
17:54
you're not involved.
17:56
That's when you have systems, brand equity, team
18:00
support doing the heavy lifting.
18:02
The goal is that your business generates revenue
18:06
through systems, not just your effort.
18:10
And here's what shifts when you move from
18:12
lifestyle to scale.
18:14
In a lifestyle business, you filter through emotion
18:19
and capacity.
18:20
Do I have time?
18:22
Can I personally handle this client?
18:25
In a scalable business, you're asking, can this
18:27
run without me?
18:29
Who can deliver this?
18:30
Is this process repeatable?
18:33
You move from me management to systems management,
18:38
and that's how you start reclaiming your time
18:40
and reclaiming your power.
18:43
So I mentioned business asset a couple of
18:44
times.
18:45
I want to kind of break that down.
18:47
A business asset is something that holds value
18:49
even when you're not in the room.
18:52
It can be sold, licensed, handed down, because
18:57
it produces predictable results without you being the
19:00
engine.
19:01
So here are tangible things that make your
19:04
business an asset.
19:06
Documented systems and processes.
19:08
You've got an operations manual that outlines every
19:12
core task that happens in the business from
19:15
client onboarding to service delivery to invoicing.
19:19
Anyone stepping in can follow the process and
19:23
get the same outcome.
19:25
An asset has intellectual property.
19:28
These are proprietary frameworks, signature methods, templates, training
19:32
materials that are gold for your business.
19:37
They are what make your results unique and
19:42
repeatable.
19:43
Think of your business as building recipes for
19:48
the business.
19:49
I would say these recipes help create a
19:52
result.
19:54
Just like a McDonald's who has a burger
19:58
that kind of tastes the same everywhere because
20:01
they follow a system for making the burger.
20:04
Like first you have the bun, and then
20:05
you put the pickle, then you put a
20:08
dash of ketchup, then you put the meat.
20:10
Like they have an order of how it's
20:11
done so that it tastes the same every
20:14
single time.
20:17
Another way to create, turn your business into
20:19
an asset is to have a client list
20:22
or CRM data.
20:24
A clean, organized client list with data on
20:27
lifetime value, conversion rates, and referrals.
20:31
These are things that are worth real money
20:33
in your business.
20:35
Buyers love predictable revenue streams and proven audience
20:40
relationships.
20:41
Brand equity makes your business an asset.
20:45
The reputation, the visibility, the credibility your brand
20:49
has over time, the trust in your name
20:52
is one of your biggest assets.
20:56
It's what allows you to charge premium prices
20:58
and attract clients easily.
21:01
Team leadership and infrastructure, a business that runs
21:04
on people and not the founder.
21:07
You've got trained team members who deliver your
21:09
service with the same excellence that you would.
21:13
Recurring revenue, memberships, retainers, or programs that generate
21:17
income month after month, predictable cash flow, and
21:20
stability, and valuation.
21:23
You have technology and automation, automation systems that
21:28
handle your marketing, your onboarding, your delivery.
21:32
And these things save time and reduce risk,
21:35
right?
21:36
A buyer, someone who's gonna buy your business,
21:38
looks at how efficiently the business runs without
21:42
extra people or manual chaos.
21:46
This is what makes your business an asset.
21:49
Not the logo, not the Instagram followers, the
21:52
infrastructure.
21:53
And I recently read this book called Built
21:56
to Sell by John Warrillo.
21:59
I think is how you pronounce his last
22:02
name, W-A-R-R-I-L-L
22:05
-O-W.
22:07
It's written like a story, so it's really
22:09
entertaining.
22:10
And it follows a service based business owner
22:13
who is basically exhausted.
22:15
He's doing everything himself and realizing that his
22:17
business has zero sellable value.
22:21
And the turning point comes when he creates
22:25
this repeatable processes and packages it into a
22:28
system and hires people to deliver it.
22:31
He basically moves from operator to owner.
22:35
And in doing so, his business goes from
22:37
something that he runs to something that could
22:42
run itself.
22:43
Now, the book doesn't give you a checklist
22:45
on exactly what to do, but it does
22:48
give you perspective.
22:49
And it's that mindset shift that really changes
22:53
everything.
22:54
So if you ever plan to sell, or
22:57
even if you never plan to sell your
23:00
business, you still might wanna build it up
23:04
as if you will, building it into an
23:07
asset.
23:08
Because when you do, you make smarter decisions,
23:12
ones that protect your time, your energy, and
23:15
your long-term wealth.
23:17
So here's what someone would look for if
23:21
they were gonna buy your company.
23:23
They're gonna look for predictable revenue, right?
23:25
Is the income stable and consistent, or does
23:28
it rely on new sales every month?
23:30
Are there transferable systems?
23:32
Are there written SOPs and processes that make
23:35
it easy for the business to run without
23:37
you?
23:38
Is there an established brand reputation?
23:41
If there's goodwill or recognition or loyal clients,
23:45
will they stick around because of your brand,
23:47
not because of the owner?
23:49
Are there healthy profit margins, right?
23:52
Does the business generate profit margins after expenses
23:57
and owners pay?
23:59
Are there a team and operations, right?
24:02
Are there people in place that can handle
24:05
client delivery, admin, and marketing?
24:08
Are you retaining clients?
24:10
Do clients renew and refer other people?
24:13
Legal and financial organization, are contracts in place,
24:17
taxes taken care of, books clean, and everything
24:20
kind of easy to transfer?
24:23
Is it a scalable model?
24:24
Can the business grow without adding equal amounts
24:28
of time and labor?
24:29
Is there a lack of owner dependence?
24:32
How much does the business rely on you
24:35
personally for delivery, for sales, for decisions, and
24:39
is there intellectual property, right?
24:41
Like, is there a unique methodology, framework, or
24:43
brand system that differentiates the business?
24:46
Even if you never decide to sell your
24:49
business, these are markers of a healthy company.
24:52
They create options, you could sell it, you
24:55
could license it, or you can pass it
24:58
on to someone in your family.
25:00
But more importantly, you can create freedom for
25:03
yourself.
25:04
When your business becomes an asset, you have
25:06
choices.
25:07
You can take time off without the business
25:09
pausing.
25:10
You can pass it down to your kids.
25:13
You can attract investors and partners.
25:16
You can step back from operations and still
25:21
get paid.
25:22
An asset-based business pays you in more
25:25
than money.
25:25
It pays you in options.
25:28
So to make this tangible, I want you
25:30
to think of companies that run on systems,
25:32
like Massage Envy, for example.
25:35
It started as one location offering spa services,
25:40
then scaled through repeatable systems and membership.
25:44
The brand became an asset because delivery didn't
25:48
depend on one massage therapist.
25:51
It ran on a process on pricing and
25:54
recurring revenue.
25:57
Now, you might be wondering, you know, what
26:00
do you want for your company?
26:03
You know, whether it's you coaching the clients
26:06
or running a creative agency or leading a
26:10
consulting firm, you might decide to make it
26:14
your goal that your business could be a
26:17
valuable asset beyond you.
26:19
Freedom doesn't come from working less.
26:22
It comes from building better systems.
26:26
Now, let's tackle this myth.
26:29
Being the face of your business doesn't mean
26:31
that you can't scale.
26:33
I think of someone like Melissa Butler, who's
26:36
the CEO of The Lip Bar.
26:39
Her brand doesn't depend on her touching every
26:44
single package that's getting shipped out to a
26:48
customer, right?
26:48
Like not every lipstick.
26:50
She's not touching every lipstick.
26:52
But she has gone from selling her lipstick,
26:56
you know, in a very grassroots way to
26:59
now being inside of large brands nationwide because
27:03
she's built systems and a team that scaled
27:06
her vision.
27:07
You can still be a strong leader, spokesperson
27:10
or creative visionary while building systems in your
27:14
business and let the business operate without you.
27:18
Like you could take a day off, you
27:20
still get clients, you still bring in sales,
27:22
the clients still get served.
27:24
Now, you don't have to disappear to grow.
27:27
You just need to stop being the bottleneck.
27:31
So how do you decide what's right for
27:33
you?
27:33
And here's your decision checklist.
27:36
I want you to ask yourself, what kind
27:39
of lifestyle do I want in the next
27:41
three to five years?
27:42
How much do I want to work in
27:45
the business versus on the business?
27:47
Do I want the business to be an
27:49
income source or an asset that I can
27:53
sell and pass down?
27:55
Am I motivated by freedom now or wealth
27:59
later?
28:00
Now, again, there's no wrong answer, but making
28:04
a conscious choice means that your daily decisions
28:07
line up with your desired outcome.
28:09
Because what happens to many women is they
28:12
accidentally build a lifestyle business that requires 100
28:17
% of them when what they really want
28:19
is scale.
28:20
And we can realize this way too late
28:23
in our business and we get to a
28:27
point where we're tired, we're overworked, and our
28:30
income is flatlined because we have no more
28:33
capacity to take on more clients.
28:35
Even if you never plan to sell, I'm
28:38
gonna say this again, even if you never
28:39
plan to sell, you can build your business
28:42
like you will.
28:43
Okay, so here's how you create options.
28:47
A business with documented systems, predictable profit, and
28:51
a brand doesn't depend solely on you, can
28:54
be sold, can be licensed, or handed down.
28:58
According to BizBuySell in their 2024 Insight Report,
29:04
over 10,000 small businesses were sold in
29:07
the last year.
29:08
Many of those businesses were sold to their
29:11
employees or family members.
29:14
So you can be one of those business
29:16
if you decide to, right?
29:17
Like that's legacy thinking.
29:20
So let's make this real because sometimes hearing
29:22
scale your business sounds like a slogan.
29:25
So let's walk through a couple of everyday
29:27
examples.
29:28
Imagine that if you are a lifestyle business,
29:32
imagine if you're a coach or consultant.
29:36
In a lifestyle business, you're doing every client
29:39
call yourself, you customize each session, you rewrite
29:44
materials on a weekly basis, your schedule is
29:47
booked solid, you take a week off, income
29:50
may slow down.
29:51
In a scalable business, you've created a signature
29:54
framework, a proven process delivers consistent results, you
29:57
train or license other.