There’s nothing wrong with a lifestyle business
As a follow up to what size business is right for you (link), the concept of lifestyle business is in that article. What is a lifestyle business? According to venture capitalists, it’s one that they cannot sell and make 20% on their investment. They look for unicorns – amazing, unique companies that they can invest in and turn billions in profit on the sale or public offering. Just whose lifestyle are we talking about here?
The entrepreneur who founds a startup (versus a small business) also gets a lot of money if she or he cashes out. But at what cost? Surely this startup unicorn didn’t take 40-hour work week to build, did it? Nope.
Along the way, she or he also has run a company, provided products to potentially millions of customers and provided a livelihood for their employees. Those are not only tangible things (money, products) but they are also very intangible things: contributing to society, lifting up others’ lives – for both customers and for employees. There’s nothing at all wrong with a lifestyle business.
I’m a huge fan of Shark Tank, and I watch as entrepreneurs pitch the sharks on their business in the hopes that they will relinquish a portion of their company for an infusion of cash to grow their company. And in many cases, the sharks will take the bait and invest. But in some cases you can see that they feel there is no investment. And Ring nonwithstanding (go read that! It’s amazing), many of these businesses go back to being lifestyle businesses – that is, providing a lifestyle for the entrepreneurs and their employees’ families. There’s no shame in that.
The efforts we put in and the rewards we expect out, the definition of commercial success is not bound by how many unicorn companies there are but by the millions and millions of businesses – who employ MOST of the workforce in the United States by the way. This is the measure of success. That company you own might just be you, yourself and you, but it provides you with – you guessed it – a lifestyle. Hopefully one you can sustain and enjoy.
There are a lot of mid-size businesses (say 1-10 million in sales) that do well, turn a profit, and maybe even return something to investors (at the very least they ARE returning something to the bank!) But they return so much more to our communities. And there are even more smaller businesses under $1M that return a ton of great things to our communities in the form of delicious baked goods, fashionable accessories, beautiful hair, fun things to do on the weekend or even help with marketing. All of those business owners are out spending money at each others’ businesses.
We’ve seen a huge resurgence of “buy local” as a result of the pandemic, and those local businesses are absolutely lifestyle businesses. They are entrepreneurs who live, work and love their businesses and their communities. They know their regular customers. They are even friends with them. These businesses are critical to our local economies, as purchases at local businesses keep money circulating within the community. From the local liquor store to the locally owned gas stations, to the locally owned restaurants, boutiques and hardware stores, these lifestyle businesses – not unicorns – are what keep our communities humming. Even local e-commerce stores contribute to the local economy – the money flowing in stays with the entrepreneur’s community, rather than being dispersed to a corporate entity and shareholders worldwide.
The size business that works best for YOU is the one that YOU define. You don’t have to get bigger. You should be more profitable, you should get to work fewer hours to do it.
Ask yourself the following questions:
If money were no object, what size business would I like to run?
What does a day in my (business) life look like?
What time do I arrive, where am I working?
What are my surroundings?
What tasks am I working on?
Who works with me?
Who are my clients or customers?
Where do I eat?
How long do I take breaks?
When do I leave?
What do I feel at the end of the day?
If you were to retire now, would you continue this business? If the answer is yes, you’re on the right track. If not, ask yourself what would need to change to make you happy.
Structuring a business based around your lifestyle is a critical decision. Many entrepreneurs get stuck in a “we must grow X percent a year” because every business book, magazine, article, guru tells them they must. But the only definition of your business success is yours. Many entrepreneurs end up chained to a business that they don’t like, and that doesn’t serve their needs.
If you’re managing a business, whether you operate a brick and mortar or e-commerce store, your lifestyle business serves a valuable role in your life and your community. It serves your lifestyle because you’ve chosen to build it that way.
Need some help? Our free 30-minute consult is perfect for identifying WHAT you should prioritize first. And it’s free!
