ENTERPRISE STYLES

- LIFESTYLE AND UPWARDLY MOBILE

NIGEL A.L. BROOKS

THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION

Article reprint
ENTERPRISE STYLES - LIFESTYLE AND UPWARDLY MOBILE

Entrepreneurs organize, operate, and assume risk for enterprises with the
intention of transforming innovative ideas into products and/or services as
businesses for profit, or meeting the needs of communities through not-
for-profit associations. Enterprises are formed with the intention of being
either lifestyle – serving the needs of local communities, or upwardly
mobile – serving the needs of large markets. By applying the duplicable
principle, a lifestyle enterprise can become upwardly mobile.

Lifestyle enterprises are the heart of Main Street. Lifestyle enterprises are
focused on serving the needs of local communities. They are founded by
an entrepreneur who either becomes a lifestyle business enterprise owner
or eventually sells to one. They are closely held by a single owner, family,
friends, or close business associates. They operate in traditional industries
such as, but not limited to agriculture, automotive, contracting, food
service, hospitality, light manufacturing and distribution, professional
services, retail, travel and entertainment, and wholesale. They can operate
from a single location, or several locations in a close geographic area, such
as a municipality, county, state, or group of neighboring states.

Whereas the start-up risk can be high, it lowers as the enterprise gains a
presence in local communities. Lifestyle transactions are predictable and
repeatable in local communities because they relate to everyday activities -
people are creatures of habit. However, location does matter. Business
activity can change due to local, regional, national, and global economic
conditions. Lifestyle enterprises are particularly prone to changes in
transportation systems and demographics, and the impact of new or
deteriorating neighborhoods. New residential, retail, office, and industrial
developments can bring business if located nearby, or take it if located far
away. Declining neighborhoods can be challenging if crime rates increase.
Competition from scale providers, such as "big box" retailers or franchise
systems can be challenging. Hence, a major differentiator for lifestyle
enterprises is quality of service.

The lifestyle enterprise owner may be an active owner-manager or a

passive investor with a delegated management team in place. In either
case, the owner must pay attention to the enterprise because nobody else
gives it and its constituencies the same level of care and attention. Owners
must pay attention to the risk of theft, fraud and embezzlement too,
especially when passive.

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Upwardly mobile enterprises are the core of the activities of angel
investors, venture capitalists, and Wall Street.

Upwardly mobile enterprises are focused on large market share, either

industry-wide or in niches, with local-to-global aspirations. Their growth
potential stems from highly innovative people that offer new products
and/or services in existing markets, or existing and new products and/or
services in new markets, or transform non-traditional industries into
traditional ones over time. They create wealth.

Upwardly mobile enterprises start as narrowly held, first by the founders,

and later by private investors seeking capital appreciation. They may
become widely held publicly traded enterprises to gain scale. Upwardly
mobile enterprises have a high risk in the early stages where capital
appreciation opportunities exist. As they they gain market share and scale,
the risk lowers. However, they must always be aware of changing market
conditions. Long-term growth usually results from entry into foreign
markets. Upwardly mobile enterprises require a professional management
team of executives and other managers, which may or may not include the
founding entrepreneur. A major differentiator for upwardly mobile
enterprises is brand name recognition.

Upwardly mobile enterprises are particularly common in the high

technology industries, where large markets are necessary to generate the
cash flows required to command a respectable return on investment.
However, if a technology really catches on around the world, the
opportunity for capital appreciation can be significant. As fads fizzle,
capital can depreciate too.

However, many upwardly mobile enterprises rely on a narrow set of well

known products that are found in multiple markets around the world.

Lifestyle enterprises may become upwardly mobile enterprises over time.

They grow by applying the duplicable principle: duplicating processes,
functions, facilities, and equipment with proven products and/or services
in one market that offer potential in others.

The duplicable principle can be applied to concepts ranging from single

products to entire business systems, both corporate and franchised.

For example, Coca-Cola, Heineken, and Pepsi-Cola are recognizable

worldwide. Although local practices may differ regarding packaging and
distribution, these products have been duplicated on a worldwide basis.

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For example, Starbucks grew through the process of duplication from a
local lifestyle enterprise, owned by businesses associates, to an upwardly
mobile public enterprise with global aspirations. It has expanded through
its own and licensed locations, and with joint venture partners in selected
markets.

Franchise systems offer a hybrid approach where the franchisor enables a

lifestyle concept to become upwardly mobile by employing franchisee
capital in exchange for a proven business system operating as a network.

For example, many car rental companies, fast food restaurant systems, and
hotel chains operate as franchises around the world, such as Thrifty,
Subway, and Holiday Inn.

Not-for-profit enterprises can be upwardly mobile also. Lions Club, Red

Cross, Rotary Club, and Scouts are examples that have a worldwide
presence.

Upwardly mobile enterprises may default to lifestyle enterprises it they

cannot capture large markets.

The enterpriship disciplines of entrepreneurship, leadership, and,

management apply to both lifestyle and upwardly mobile enterprises.
Lifestyle enterprises differ from upwardly mobile in mindset. Lifestyle
enterprises serve local markets locally, whereas upwardly mobile
enterprises aspire to serve local markets globally.

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About Nigel A.L Brooks...

Nigel A.L Brooks is a management consultant to entrepreneurs, business

enterprise owners, executives, and managers, and the enterprises they
serve. He specializes in developing the entrepreneurial, leadership, and
managerial competencies that build sustainable advantage from vision to
value. He is an author and a frequent speaker.

He obtained his professional experience as a partner at Andersen

Consulting (now Accenture, Ltd.), as a vice president at Booz Allen
Hamilton, Inc. (now Booz and Company), as a senior vice president at the
American Express Company, as president of Javazona Cafes, Inc., and as
president of The Business Leadership Development Corporation. He has
been a contributing editor for the Bank Administration Institute magazine,
and has served on boards of entrepreneurial networks. He was educated at
the University of Exeter, Devon, United Kingdom.

His clients are in the financial services, food services, high-tech,

manufacturing and distribution, pharmaceuticals, oil and gas, professional
services, retail and wholesale, transportation, and government industries.

He has experience in North and Latin America, Europe and Asia-Pacific.

www.nigelalbrooks.com

About The Business Leadership Development Corporation (BLD)...

The Business Leadership Development Corporation is a professional

services firm that works with entrepreneurs, lifestyle business enterprise
owners, executives, and managers, and the enterprises they serve.

BLD develops entrepreneurial, leadership, and managerial competencies

that achieve performance excellence by building sustainable advantage
from vision to value through:

 Strategic Management Consulting

 Executive Coaching and Mentoring
 Professional Training via The Center For Business Leadership
Development (CBLD)
 Motivational Speaking

www.bldsolutions.com

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