What is a lifestyle entrepreneur?
A lifestyle entrepreneur is someone that starts a business with the intent of shaping their personal lifestyle and not for the sole purpose of making money. They often tend to focus more on being fulfilled by doing something they have a passion for than on a certain level of income.[i]
Many service-business owners likely fit into this category but don’t think of themselves or call themselves “lifestyle entrepreneurs.” Frankly, the term they use to define themselves or their business is unimportant so long as they know what success looks like for them in the long term.
Lifestyle Business vs Startup Business
The difference between a lifestyle business and a startup comes down to the intentions and goals of the founders, a difference that was stated well in an article by, Corbett Barr from Fizzle:
“A startup’s job is to grow big enough to provide a return to investors. A lifestyle business’s job is to provide a great quality of life to its owners.”
In the same article, Barr, who has “done both” goes on to explain how a lifestyle business needs to “allow the entrepreneur/owner to live how he/she wants to live now” while running their business. Conversely, “a funded startup has the primary responsibility of becoming big at the expense of the lives of the founders and employees.”
This distinction matters when you think about your business and your goals as an individual, especially if you are just starting out. Defining what success looks like early on will only help you stay on course and get to your goals strategically.
There are many side hustlers out there working on their businesses and planning for the day that they will be their own bosses. If you’re one of them, deciding what you’re aiming for will help you define your milestones while keeping your lifestyle goals in full view.
But let’s say that you’ve been in business for a while and you still haven’t hit the point where you feel financially sustainable or at the point where you can do the things that would make your lifestyle more ideal (take vacations, work four days a week, etc.) How do you figure out what to do to take your business to that level?
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5 things you can do to start moving your business in a direction that supports your desired lifestyle
1) Define the lifestyle you want
- It’s really hard to hit a target if you don’t know what it is or what it looks like.
- Visualize what your ideal lifestyle looks like: Are you a serial entrepreneur? Are you working on sandy beaches? Are you working fewer days a week? Are you in your office most of the time with the bright, energetic people you’ve hired to grow your business?
- Find the right answer for you and set that as your target. Now you know what you’re working towards and will be better equipped to make a plan that will help you turn down or put less priority on things that won’t help you get there.
2) Evaluate your desired business model
- If you’ve been in business for a while, you already have a good feel for what type of business you have, but it’s still important to assess whether this model makes sense and if it is getting you where you want to go.
- If your goals are to have financial stability and to work from anywhere, it’s worth looking into how Internet lifestyle businesses are structured. Kimanzi Constable shared 6 steps to becoming an online lifestyle entrepreneur, on Inc.com. If your service can be performed remotely (graphic design, accounting, business coaching, etc.) it is a helpful read.
- If yours is a more hands-on service business (home services, professional services, etc.) then you’ll need to consider how to frame those services in a way that will allow you to scale them and still manage your time (more on that later in “process mapping”).
3) Determine your “minimal viable income”[ii]
- Even if you’ve been in business for a while, figuring out the minimum income you need to sustain your family, home, and other obligations is a worthwhile exercise.
- First, run a checkup of your business. This will help you identify areas of opportunity as well as areas where you might be able to trim back both time and money.
- Next, take a look at this article on finding your minimal viable income from Fizzle to help you determine things like fixed and variable income as well as where and what to budget.
4) Consider a passive income or recurring revenue stream
- If you offer a service that is traditionally only an in-person offering (like landscaping), consider ways that you could introduce recurring revenue to your business
- Using the landscape example—you could offer an upkeep service that is charged automatically every month or a lawn and garden spring-cleaning package that you perform annually for customers that sign up for that service. A helpful resource is Josh Coffy from Flight Media‘s article, recommending that the more you can “productize” your services the more opportunity there is to build a steady, reliable stream of passive income.
- The ideal scenario here is that you discover an additional market of people looking for longer-term services and not just “need-it-now” services, so that you add stability and diversity to your business model. Many service businesses overlook their recurring revenue opportunities and miss out on that revenue stream.
5) Process map your business activities
- The amount of money you make is one component towards reaching your lifestyle goals, but the amount of time spent on your business is just as important. Process mapping involves documenting the key things you do to make your business “go.” By doing this you will identify areas that you might be spending too much time with too little payoff and areas where you can outsource, automate, or delegate.
- It is important to put your efforts into the most valuable parts of your business if you want to get to a place where your time management and cash flow are sustainable and (more importantly) desirable.
“If you don’t have a scalable repeatable model…everything will be a custom project and you will be a single-person shop forever,”-Maury Rogow of Rip Media explained his journey in getting to a sustainable model in his story, Zero to One Million.
- Beyond saving yourself time, it’s important to think about what would happen to your business if you were put out of commission for a family crisis, illness or some other unexpected circumstance. This is particularly important if you are your family’s main source of income. There are a number of free and low-cost tools available that will help you evaluate your processes and put systems in place. This will ensure that you feel “in control” whether things are going smoothly or you are facing outside challenges.
Whether you identify yourself as a lifestyle entrepreneur or just someone doing what they love and trying to make a living at it—you will do yourself no harm if you set clear goals for how you want your life to look, while doing what you love. It is impossible, however, to hit a goal that you never set.
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