Lifestyle Business vs. Growth Business...
Understanding the distinction between a lifestyle business and a growth business is necessary when building a business...
Happy New Week,
There are a number of reasons why you might start a business; you might have found a skill you’re really good at and can monetise, a niche you can capitalise on, access you can monetise, etc. When starting your business, you should identify which type of business you want, and what you want from it. If you want a business that will fund the life you want, a lifestyle business might be a better fit, if you want a business that will support you and others and you want it to eventually continue without you, a growth business is what you should consider.
A lifestyle business is a business that creates and sustains a particular level of income for the owner/owners. Lifestyle businesses can easily be a multi-million-pound company in terms of revenue. However, there isn’t much room to expand as the business is usually centred around the owner/owners. They are essentially the business. However, a lifestyle business when done right gives you the financial freedom you desire, opportunities and access to the better things in life, and also a very good work-life balance. You can pick and choose when you work, how much you work, and who you work with.
A growth business isn’t centred around the founders. They usually have systems and processes that make the business able to run without depending on just one person. a founder of a growth business is typically focused on building a team to grow the business and achieve targets such as investment, profit, and shares. The business can run regardless of whether the founder or founders are still actively involved in running the business.
Growth businesses can be very demanding because you are trying to grow rapidly in a short amount of time. A lifestyle business can be very demanding too but the entrepreneur is able to dictate how much work they put in, depending on how much profit they will like to earn. As the main aim of a lifestyle business is to help the entrepreneur maintain a specific lifestyle, they aren’t heavily focused on making large amounts of profits.
As you scale your growing business, you are able to share the workload by building a larger team. This also means you are able to develop people's careers and create more opportunities for growth, which is a very rewarding feeling. Building a growth business and potentially selling also means you will get a bigger pay off which will create greater financial freedom. Sometimes it is difficult to sell a lifestyle business because it is a business very centred around a person or people, it might not be worth much without them.
To really grow a business you will require some sort of funding, this could mean you end up giving away a percentage of your business. This could mean that you end up being an employee in your own business. Building a growth business can become like a 9-5 and entrepreneurs usually start a business to escape the 9-5 life. Usually, with a lifestyle business, you can fit your work commitments around your hobbies or lifestyle. It doesn’t require as much time and commitment from the founder.
When I started my agency, my business partner and I wanted to create a lifestyle business. Creating a business that will provide enough money to cover costs and fund our lifestyle with as little time commitment as possible was very appealing. Recently we noticed that we have a great opportunity to build a company that will truly have a big impact on the world. We decided why don’t we try and see how far and wide we can grow our business. Both paths require a lot of work upfront and can be incredibly challenging, but also very rewarding too.
Understanding the difference between a growth business and a lifestyle business is very important. The business you choose to build has to be tailored to your life goals and ambitions. If running a business with a growing number of employees isn’t appealing to you then a lifestyle business is probably more suited to you. If you are less interested in huge profits and more focused on using your business to enjoy your life, a lifestyle business is more for you. As mentioned above, there’s no right or wrong way to operate your business. Create a business that suits you and what you want out of life.