What is a lifestyle business?
A lifestyle business is a type of business that is primarily established and run with the aim of supporting the owner's desired lifestyle rather than pursuing significant growth, expansion, or high-profit margins. In other words, the primary goal of a lifestyle business is to provide the owner with a comfortable and fulfilling way of living rather than maximising financial returns.
To keep it real - a lifestyle business is a business that is established to make the profit level you need to live the lifestyle you want.
All clients who work with me, complete an exercise that has them look at the cost of their dream lifestyle.
To start with, these lifestyles often look like being able to take plenty of time off (school holidays for parents), get a cleaner, take a couple of holidays and long weekends away every year, be able to do whatever they choose without having to worry if they can pay for it, and to build savings.
It is nothing too wild. No private jets, fleets of cars, teams of staff or private jewellery collection…it really is just looking at things that would make life more comfortable.
When they hit that profit goal, they inevitably add more things but to start with, it's fairly simple. It's just a lifestyle that would feel good. It would bring them joy and they could live in peace and not stress about money at all.
When you join The Boardroom, we work out the cost of this lifestyle and then I reverse engineer back to a sales target for you to hit. We then spend twelve months changing the strategy in your business (and where necessary your mindset) so you can hit that target. Some people don’t need twelve months either!
A lifestyle business allows you to go to sleep full of gratitude because you got to spend the day doing work you love, with clients you adore and your bank balance is high enough for you to spend your downtime doing things that make you happy. The fundamentals of your life are all taken care of.
Significant growth, expansion and high profit margins might be something you want to pursue down the line but to start with, you just want to build a business that makes you the money for you to live the life you want to live.
What are the key characteristics of a lifestyle business?
Lifestyle businesses often have similar characteristics, so let’s take a look at what they are.
1. Personal fulfilment
The business is typically centred around the owner's passions, interests, or hobbies, allowing them to enjoy their work and maintain a healthy work-life balance.
2. Growth over scale
Lifestyle businesses generally focus on steady, sustainable growth rather than aggressive scaling. The owner might intentionally choose to keep the business small and manageable to avoid undue stress and time commitments. However, down the line this may change, if you are wishing to exit the business.
3. Independence and flexibility
The owner often has the freedom to set their own work hours, location, and pace, which allows them to integrate their business into their lifestyle seamlessly.
4. Limited external funding
Lifestyle businesses are often self-funded or rely on small loans, savings, or investments from family and friends, as they typically don't aim for massive expansion that requires significant external capital. This means no external parties asking questions or influencing your decisions.
5. Small team or solo
You will likely need some support in your business but you’ll never be running massive teams because that would detract from the lifestyle you want to lead and it’s not necessary in the lean, lifestyle business you are building. Lifestyle businesses usually have a limited number of team members (usually virtual freelancers rather than employees which means no scary employer rules to worry about). Keeping the team small also helps maintain control and reduces the need for complex management structures.
6. Niche focus
These businesses may serve a niche market, ensuring that the owner can personally connect with their customers and maintain a close relationship with them.
Building your lifestyle business
Whilst your lifestyle business will still need to hit revenue and profit targets (to be able to pay for the lifestyle you want to live), the success of your business is often measured more by your happiness and quality of life than purely financial metrics.
So are you building a lifestyle business?
Do you know what the cost of the life you want to live is?
Is your strategy telling you what actions to take on a daily basis and are you hitting those lifestyle business profit goals?
Tell me all the things and if you need any help with this, check out The Boardroom. It's helping my clients build lifestyle businesses they love that pay for the life they want to lead. And whilst it's challenging, it's also fun. Come join us.