Lifestyle business

A lifestyle business (also referred to as a lifestyle venture)[1] is a business set up and run by its founders primarily with the aim of living or maintaining a certain lifestyle. It's meant to be a business which adjusts to the lifestyle - so that the founder can live their life as they like (and oftentimes already do).

Some types of enterprise are more accessible than others to the would-be lifestyle business person. Those requiring extensive capital (for example: car manufacturing) are difficult to launch and sustain on a lifestyle basis; others such as small creative industries businesses are more practical for sole practitioners or small groups such as husband-and-wife teams.

Lifestyle businesses typically have limited scalability and potential for growth because such growth would destroy the lifestyle for which their owner-managers set them up. However, lifestyle businesses can and do win awards and provide satisfaction to their owners and customers. If sufficient high-quality creative producers begin to naturally cluster together, such as in Brighton, England, during the 1990s, the perception of a place can be radically changed (see Porter's cluster).

These are firms that depend heavily on founder skills, personality, energy, and contacts. Often their founders create them to exercise personal talent or skills, achieve a flexible schedule, work with other family members, remain in a desired geographic area, or simply to express themselves. But without the founder's deep personal involvement, such businesses are likely to, well, flounder. Professional investors are therefore rarely involved with lifestyle businesses.[2]

Cultural context

The term is used in both favorable and derogatory meaning. An example of individuals who promote the concept of lifestyle businesses favorably include Tim Ferriss's The 4-Hour Workweek and other numerous blogs that emphasize the concept of passive income with the same goal of lifestyle businesses. These individuals create an image of lifestyle businesses and passive income that promotes an easy lifestyle and something that individuals should aspire towards. In the derogatory sense, a business started with the intention of becoming a startup, but which instead becomes a smaller business is often referred to as a lifestyle business by investors or other detractors.

Features of a lifestyle business
  • Owner-focused– A lifestyle business is typically created to support the owner's lifestyle, rather than being solely focused on maximizing profits or growth.[3]
  • Work-life balance– The owner of a lifestyle business typically seeks to maintain a healthy work-life balance, and may prioritize flexibility and time off over rapid growth or expansion.
  • Low overhead costs– Because lifestyle businesses are often small and owner-operated and may be run from home or a small office. This feature makes it have low overhead costs.[4]
  • Owner dependent– Lifestyle business is highly dependent on the owner in that the entrepreneur needs to be actively working to make money. When there is no active work being done, there are high chances of little to even no money being made.[5]
  • Creativity– Lifestyle businesses often allow the entrepreneur to express their creativity and pursue their passions, such as a love for cooking, fashion, art etc.

Notes
  1. Entrepreneurship by OpenStax. OpenStax. 2020. p. 10. ISBN 978-1-94717-270-8.
  2. Soul Shelter » Entrepreneurship: A Primer
  3. Krieger, Jesse (2014-03-01). Lifestyle Entrepreneur: Live Your Dreams, Ignite Your Passions and Run Your Business From Anywhere in the World. Morgan James Publishing. ISBN 978-1-61448-628-2.
  4. Barnes, Jo (2020-10-11). "How to Start a Lifestyle Business & Travel The World". Your Lifestyle Business. Retrieved 2023-04-25.
  5. Coffey, Adam. "Council Post: Maximizing Your Lifestyle Business Through Recurrent Revenue Streams". Forbes. Retrieved 2023-04-25.

References

See also


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