People often perceive those running a lifestyle business as someone that owns a tiny mom and pop shop like a florist, cafe or nail salon. It is often given a cold shoulder by venture capitalists that neglect a good idea by stating that this isn’t “start-up worthy” and how you should try the lifestyle business route instead. It is treated condescendingly by implying they’re easier to build and maintain, but this notion is proved wrong by several thriving ones that now earn in 7 figures.
Well, those are the same people who are incognizant of its true meaning and function. Let me break it down to you:
"You can only become truly accomplished at something you love. Don't make money your goal. Instead pursue the things you love doing and then do them so well that people can't take their eyes off of you." - Maya Angelou
A lifestyle business is simply one that permits the owner to enjoy a particular lifestyle, while also simultaneously allowing for the time to run their company. It is like every other business and is profit oriented but revenue maximization isn’t quite a priority.
The best way to learn about this kind of business is to discuss it with someone who’s been there, done that.
Kane Mooney is a mid-aged married woman with 2 kids and stays in Seattle, US. She has a coaching center in the city downtown for 5-18 year olds to study a range of subjects, and has 20 staff members to help her out with that. Let’s understand if she thinks a lifestyle business is worth a shot or not!
Q. Kane, what led you to choose to start a lifestyle business?
A. Being a mother of two is stressful at times, but I’ve always had a lingering passion for teaching kids, so I decided to take that up a notch by converting it into a business without sacrificing my personal life and duties. I like the fact that I can dip into work according to my preferences and attend my children’s soccer games when needed too. I like the freedom that comes with it both of being your own boss and the extra dollars that flow through to support my lifestyle. So personally, it was a win-win for me and the perfect fit!
Q. Wow, that sounds ideal, how is it different from a start-up and why is it that you never chose that path?
A. Well, there’s couple of things that differentiate a start-up from a lifestyle business.
- Firstly, the idea of success differs in both. Yes, a million-dollar business sounds amazing to me but isn’t the sole purpose of why I started this business. In a lifestyle business it’s up to you and how much resources you can devote to it, to make it as big. Lifestyle business owners value their freedom and control while on the other hand, for start-ups- growth, innovation and expansion is their motivator.
- Secondly, in terms of finances, I didn’t want to get into the trouble of applying for loans, I had some personal funds and help from family members and I was good to go! A lifestyle business can rely on debt financing while start-ups can qualify for angle or venture capital mainly due to their structure and growth! A start-up has the trouble of growing big enough to provide a return for their investors.
- Lastly but a key component that is different in both businesses is process, where start-ups seem to have a slight benefit. In my case, without my presence and supervision, the staff might face problems while in start-ups, organizations have a set rule of procedures to be followed without continuous guidance needed. Start-ups have a key goal to achieve something due to their motive of growth, while mostly in lifestyle businesses, activities are routine and similar each day.
Q. They are in fact two very distinct types, what are the kinds of struggles or problems you face?
A. The main disadvantage of a lifestyle business is what majorly even distinctly differentiates it from a start-up is the scalability required to expand. I have limited scalability and inadequate resources to be sufficient for a staggering amount of supply. This includes all types of expansion barriers- whether financially- I can’t suddenly open multiple coaching centers across the country or even outside without equity investment. Similarly, opening around the country or further away requires geographical flexibility which due to a limit of distribution channels, lifestyle businesses can’t attain. I also don’t have enough technical resources or even human resources to cater to the growing clients.
Q. Yes, that’s one place where start-ups have an upper hand, do you have any final thoughts or anything you’d like to advise someone who’s confused between the two?
A. Personally, I love my choice of a lifestyle business, it’s set up around my life, there’s no guilt when I take time off for myself or family and that’s above the need of growing the business. On the other hand, start-ups that are have a disadvantage of often not having time for yourself and your interests for personal growth(Check out 7 things no-one tells you before starting a start-up) I’ve always believed in working to live, not living to work theory, and I save myself from high levels of burnout, stress, and health problems that growth-minded business owners often face. Profitability from day 1 and a positive cash flow keeps me content (especially when 82% of businesses fail due to cash flow problems). And it’s not that bad after all, you can always partner up for that extra leverage with other brands.
Finding a balance between passion and profitability is often quite a task and not everyone can easily achieve it, but sacrificing one for the other isn’t needed. Yes, you can train yourself in strengthening areas you’re weak at or have less interest in but ultimately you’ll gravitate and do better towards what you truly enjoy.
"Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do." - Steve Jobs