I don’t like the term ‘lifestyle business’ as it’s commonly used in a dismissive and derogatory sense. What does a ‘lifestyle business’ commonly mean when used this way?
- not “too big” (in every way)
- not “ambitious”
- probably bootstrapped not funded
- small team, typically just the founder
- relatively “small” revenue
And what sort of “lifestyle” would they be talking about?
Firstly, a small team can be an asset when it comes to payroll time: That “small” revenue, maybe mid-5 to low-6 figures, is plenty when coupled with a small divisor. What about ambition? It’s true, most ‘lifestyle businesses’ don’t set out to shoot for the moon and change the world. Most ‘lifestyle businesses’ take less risky paths; more guaranteed success. More. Guaranteed. Success. I kinda like the sound of that.
So a ‘lifestyle business’ is way to build, control and live a business with a bigger slice of a more likely revenue. And with a small (or no!) team, you probably get time and location freedom thrown in for free. That’s one lifestyle (one that sounds pretty good to me).
So, what do people think they’re starting when it’s not a ‘lifestyle business’. Well, it must be large, ambitious, probably funded, with a big team and aiming for a “big” (potential) revenue. It’s a large, high-risk venture. That’s ok but let’s not pretend that it doesn’t come with a “lifestyle” of its own: a larger team means more management overhead; a high-risk idea means much more intense work hours; raising funding means losing control and forcing you into a rocketship growth pattern; and that “big” revenue must be shared among more staff and investors. And if it’s funded, there’s probably an exit planned so the business is unlikely to last more than 5 years. And then what?
Whether it’s a small ‘lifestyle business’, or a shoot-for-the-moon startup, or a regular employee at BigCo, they all affect the life we get to lead. They all come with their own lifestyle. And that’s why I think the notion of a ‘lifestyle business’ is bullshit: we’re all starting businesses which come with a lifestyle