Lifestyle Business Vs Growth Business – Which Is Right for You?
Examples of lifestyle and growth entrepreneurship
One of the first things you must decide before starting a business is what type of entrepreneurship suits you. There are many labels under which an entrepreneur can fall, but it really boils down to choosing between growth and lifestyle businesses.
In this article, I look at some of the considerations you’ll need to make to decide which style of entrepreneurship is right for you: lifestyle business vs growth business.
Lifestyle entrepreneurship – if work/life balance is your main goal
Lifestyle business owners are less concerned about the money they make than the life they live. They start and operate their business to support the kind of life they want to lead. That might include traveling, hobbies, family, and a load of other interests that would otherwise take them away from work.
When you become a lifestyle entrepreneur, your primary goal is more likely to run your business as Tim Ferriss suggests in his book ‘The 4-Hour Work Week’. As a successful lifestyle entrepreneur your aim is more likely to veer toward creating mostly passive income.
Having said this, some entrepreneurs build their life around a business that delivers their desired lifestyle – for example, a location-independent entrepreneur (sometimes called a digital nomad) who writes blog posts and creates social media content. This content is designed to attract visitors to the entrepreneur’s website, and then deliver financial reward using tactics such as affiliate marketing. The best bloggers (influencers) can also earn large sums from sponsors by advocating products and services.
Growth entrepreneurship – if growth is your main goal
Growth entrepreneurs are fully focused on their business. Their aim is to grow their business from the early stages, and create increasing income and wealth by scaling from boutique to growth. The business ideas this type of business owner has are developed to create a sustainable business that will produce an income stream forever, or perhaps an exit strategy where value is released by selling the business.
Lifestyle entrepreneur examples
Examples of lifestyle entrepreneurs include Tim Ferriss (The 4-Hour Work Week). Because of entrepreneurs like Ferriss, many people have created businesses that operate online – perhaps with a few personal appearances or speaking events thrown in. However, you can have a bricks-and-mortar business and still be a lifestyle entrepreneur.
Many small businesses are operated to accommodate lifestyle. The owner has no wish or desire to grow the business to any more than it is currently. The income it provides allows the owner and their family to live the life they wish.
Growth entrepreneur examples
Business entrepreneurship is how most people tend to think of entrepreneurs. The Bill Gates and Jeff Bezos of this world. You start a business, build it up, see it grow, and continue to work hard to grow it further.
You may have an exit strategy, but, if you sell your business, it probably won’t be long before you start another. Your life centers around your business.
Which type of entrepreneur are you?
Before you rush to start out in business, you’ll need to identify your goals. These will help you determine which type of entrepreneur you are. Most entrepreneur coaches spend a long time discussing your business goals. That’s important, but shouldn’t you first consider your personal life goals?
If you know what you want to achieve in life, then you’ll have a much clearer idea about which type of business to start.
As a business entrepreneur your first concern is your business. You are likely to work long hours, defining and honing strategy and managing your business. You’ll commit significant time and resources to your business. You will likely make many sacrifices, and these will impact the quality of your personal life. The revenue and profit of your business should grow rapidly, and your net worth with it.
In contrast, a lifestyle entrepreneur’s primary goal is quality of life. You’ll want to maintain your standard of living, but also have enough income to live the lifestyle you desire today. You won’t be focused on growing your business. Instead, your focus is on developing a business that allows you the time to enjoy your life today. Though, as entrepreneurs like Pat Flynn demonstrate, you can run an online business that delivers largely passive income and delivers growth.
As the economy has been impacted by the internet, the ability to become a lifestyle entrepreneur has increased. Many lifestyle entrepreneurs now run businesses that are conducted online and employ remote teams. You can run such a business just as effectively from your home as you can a vacation apartment in Hawaii.
Business entrepreneurs are much more likely to work in a fixed location, or, as the business grows, out of multiple offices, production facilities, or retail outlets.
Can lifestyle entrepreneurs make real money?
Absolutely. Indeed, you’ll need to focus on profitability. Without profits, you won’t earn the income you need to live the lifestyle you desire. As I have pointed out, lifestyle businesses can grow – it’s just that your business strategy won’t be targeted for growth. You’ll be less aggressive in how you run your business, with the objective of maintaining your lifestyle. Because of this, you’re likely to take far fewer risks.
A lifestyle business is still a business
It’s important to understand that a lifestyle business is still a business. Your desire for success will be no less as a lifestyle entrepreneur than as a business entrepreneur. You’ll still need to set realistic business goals. You’ll still need to manage staff. You’ll still be responsible for business results.
Both business and lifestyle entrepreneurs must:
-
Develop detailed business plans
-
Identify target customers
-
Maintain positive cashflow
-
Fund their business at startup
-
Develop a forward-looking business strategy
Here’s what I know
Whatever your goals as an entrepreneur, if you fail to plan you will plan to fail. Whether operating a lifestyle or growth business, you’ll need to know and understand your market. To obtain funding and remain focused on your goals, you’ll need to develop a business plan, be clear of the service or goods you will be selling, and market your goods or services effectively.
You’ll need to identify your strengths and weaknesses, employ expertise to fill skills gaps, and manage and motivate your employees.
There’s no right or wrong style of entrepreneurship. But understanding exactly what you wish to create will help you define what type of entrepreneur you should be – and this will help you be the happiest you can be in your entrepreneurial life.
How deeply have you analyzed your goals for your business and your life? What is most important to you, and why? Your thoughts could help others determine their own goals, so why not share them in the comments below?