I have never understood the antipathy that otherwise rational people have for the so-called “lifestyle business”. Quite recently I heard someone in a position of responsibility in the small business community disparage lifestyle businesses. They weren’t real businesses, he said. They only enriched the owner, he said. What the f**k, I thought to myself?
Even more puzzling was the unthinking regard that everyone holds for the externally funded business. Get angel funding, get venture capital, get debt from a bank is what I hear people encouraging new entrepreneurs; as though the ability to raise money equates to the ability to make money. It doesn’t. Just as measuring your business success by the number of people you employ is vanity, not sanity.
The heart of the issue is this question: what constitutes business success? In an age of growing awareness of carbon footprint, in a time when the fastest growing businesses are social enterprises, at a point in the economic cycle when we need to drive entrepreneurs to help solve social issues; we no longer have time for these false dichotomies.
A business success can be measured on the bottom line. A business success is not measured on its top line. I have heard celebrity entrepreneurs brag about their businesses calling out their total revenue as though the sheer volume of cash that their business touched was somehow meaningful. I picture them skinny dipping in all that cash as it washes by cackling irrationally not realizing that the flow of cash is not the same as the stickiness of profit. The reality was that they made a skinny 1% profit on all that cash. A business with one tenth the revenue that makes 10% on its money is precisely as successful. Revenue is just not profit.
It is not measured by the number of people it employs. Over and over I hear people talk about the size of their organizations. All I hear is the cost of their payroll. Is this just a man thing? Are we really comparing size still as adults? Get over it. In business size doesn’t matter.
One of the most progressive entrepreneurs I know, Emma Jones of Enterprise Nation who advocates for home-based businesses, makes the point that many modern start-ups intentionally work with contractors rather than taking on the cost of a full time employee. They are more resilient businesses. They are more flexible businesses. They employ less people. Their success is inversely proportional to the number of people they have employed. And they offer the collateral benefit to society of supporting other small businesses.
But I digress. Let’s return to the blowhard who caused me to reflect on the initial question: what do people have against lifestyle businesses? A lifestyle business is simply one where the owner seeks to make the business successful not only in terms of profitability but also in terms of its ability to make his or her life more successful. It is this intentional inclusion of other measures of success that also define a social enterprise. It is exactly this awareness of the impact on the environment that defines the green enterprise.
In short it is the insight that there are other stakeholders in a business that makes a business ethical at all. So where in hell does my un-named blowhard get off dissing lifetstyle businesses?
I believe that people should build businesses around their passions and around their lives. I believe that some businesses deserve to grow to fully express themselves or contribute to society. But other businesses should remain small and focussed. And who is he to tell anyone what they aspire to or grade the result on such a myopically narrow measure. Personally, I run a lifestyle business and he can f**k off.
Ali Davies
13 July 2010
11:09 am
Really enjoyed this post. I think you hit on a key point here – it depends on what your definition of success is. The problem is many people are chasing someone elses definition of success (society/family/peers etc ) and it costs them what is most important to them. Personally, I have chosen to create my own definition of success. Yes, it includes business stuff but NOT at the expense of being a parent, wife, friend and living my ideal lifestyle.
I am proud to have escaped the corporate rat race (where I was deemed “successful” despite the fact it sucked the life out of me) and I now run a home business around my family life and lifestyle, on my own terms. To me that is more successful than at any time during the 14 years I peddled the corporate hamster wheel.
Pam Woods
13 July 2010
1:56 pm
Thanks loads for this Doug. A good number of my business club members are lifestyle businesses as I am myself. It’s good to hear an influential voice sticking up for us and the value of our contribution. (I keep myself off the dole!) I hope its Ok to Tweet this url
Regards,
Pam Woods
Rob
13 July 2010
2:54 pm
Really enjoyed reading this post. My personal favourite bozo question is “What’s your exit strategy?”. Especially when the reaction to ‘we don’t have one’ is to somehow feel superior about having exposed some glaring inadequacy in your business.
Rachel Elnaugh
13 July 2010
2:58 pm
Anyone who is running a business which does not give them the lifestyle they want is not a success in my humble opinion…
And success is also about far more than money!
We are entering a new paradigm for business.
Corporate photographer London
13 July 2010
3:11 pm
If its your passion and you make a living at it- what could possibly be better? Grant
Colin Burbidge
13 July 2010
3:54 pm
Well said. Financial sucess is only part of the answer, a balanced lifestyle is key, and in my opinion essential, to a long and happy life!
Stephen
13 July 2010
5:03 pm
couldn’t agree more; whilst its great for founders to want to shoot for the moon and be the next facebook/google/etc its just as valid to have realistic personal expectations (which may/may not include social impact).
i think its a perverse kind of snobbery on the part of your blowhard and his ilk that they cannot conceive how not climbing on the funding treadmill that you described and not achieving a $1b valuation could be considered anything other than a failure.
Bradley Chapman
13 July 2010
6:51 pm
Hey Doug – Always loved your no nonsense no bulls**t approach. Great article my man. It would be great to catch up with you again. I’ve not seen you since The British Library.
Best Wishes
Bradley Chapman
Raw Business
Erika Watson
13 July 2010
8:59 pm
Great post. Couldn’t agree more. The vast majority of businesses are lifestyle businesses and are too often ignored or ill-served by Govt. schemes. I’ve just interviewed quite a few for some research on inclusive business support and it’s not unusual for support providers, chasing targets, to give highly inappropriate ‘high-growth’ focused advice to businesses who explicitly want steady rather than fast growth.
As this sector is set to swell, LEP responses need to be taking this on board. Worryingly, welfare to work for the self-employed policy already looks set to go down the sausage machine route…
@richardbagshaw
13 July 2010
9:27 pm
I found this artucle really interesting as its something I think a lot of Entrepreneurs should take note of. My business plan involves an amount of money to get up and running, money I don’t have. So instead of going to the bank/vc/business angel, I intend to set up a lifestyle errm style business and then use the profit from this to invest in my other venture. This way Entrepreneurs can keep 100% control of there beloved business and only seek investment for growth or exit in the future.
Cheers
Becca
13 July 2010
11:06 pm
Totally brilliant, and timely, for me, I just blogged the first half of how my business grew from ‘lifestyle’ to life changing, it was hell for 3 years and I only found the courage to write about it now as I can see light at the end of the tunnel. Rapid high growth almost cost me my marriage, my home and my health. The way forward for me now if to keep the closest eye on my net profit, outsource everything I possibly can, economically, and remember why the hell I started this in the first place. Thank you for your inspiration.
Lloyd Pennington
14 July 2010
12:15 am
Thank you so very much Doug for sharing your thoughts with us. My partner and I both run ‘lifestyle businesses’. My partner as a wedding and portrait photographer and I myself, am an industrial designer and product developer. We choose to do so as this fits in well with our children’s lives. We also love each other very much and would loath to be parted for 50 hours plus per week. In fact today I turned down a very nice offer of a 2 year full time contract that financially would have made life much easier, but success in our eyes is measured much more accurately by the gauge of happiness and I have to say we are both very happy with our choice.
We as you say both support complementary freelancers by off loading to others work we are either not qualified to do or in particularly busy times our surplus work. We also find that this later has benefit when things from time to time slow and others we’ve helped help us in return. In addition we neither contribute daily as many do to the congestion and emissions, travelling in the mad rush to get to our place of work. Our lives whilst sometimes necessarily frugal are none the less quite free of the stresses many workers and indeed business people have to endure daily.
If I recollect correctly John Ruskin said “Profit is sanity, turnover is mere vanity”
Once again, thank you.
Regards
Lloyd Pennington
Claire Fuller
14 July 2010
6:14 pm
I really enjoyed reading this article! Why do people hate lifestyle businesses… perhaps people are jealous of us who are doing it, and wish they could, but they daren’t. I absolutely love every day working in my business and helping people to improve their lifestyle, in both huge and small ways, all of them are worth doing. So often people seem to prefer to be trapped in their corporate career even though it is not making them happy, or even healthy. Best to work with your values I feel. Great blog, thanks again.
Karyn
14 July 2010
9:24 pm
People who hate lifestyle businesses are just jealous. They are trapped in a rat race and cannot see or take the brave step to decide what’s right for them. It is often easier to conform than make a decision so they envy your decsion and confidence.
Toby Briant
15 July 2010
10:29 am
Thanks Doug for a really interesting article.
Personally interesting to me because I have seen both sides of this.
I spent 10 years in a big corporate Recruitment before establishing my own Financial and HR business. Anyone leaving the business to set up their own business was deemed to have ‘copped out’ ‘couldn’t hack it’ ‘was never any good anyway’ etc. Size was everything, the company is my life, my life is the company – OK I’m exaggerating to make the point now, but not that much!
In setting up my own business, I thought I would have to overcome these prejudices. Heres a couple of my own myths that I’ve had burst in the last 12 months:
- Clients wont like our office in an outbuilding of our house. Wrong! Everyone who visits us loves the relaxed office feel. We deal with a lot of Finance Directors, who think its just smart business for a start-up and are happy that they aren’t paying for city centre offices in their fees.
- Prospective employees wont want to work for a start-up/OMB/ non-corporate – Very wrong! Everything I had previously thought would be a barrier to people working for us has actually turned out to be a selling point!
I could go on and on, but it’s your blog!
Suffice to say I have now removed my head from my arse and find the ‘Lifestyle Business’ jibe an amusing reminder of a blinkered business view.
Paul
17 July 2010
6:37 pm
Why do people hate lifestyle businesses?
Because for most its easier to condemn something than understand something.
Critiquing and dismissing legions of business people with one swift comment is an effortless act of one-up manship and self ego stroking by individuals who forget where they stared out from, how difficult it was, and what actually motivated them to start in the first place.
Mark Straiton
22 July 2010
5:26 pm
I suppose I’ve run my own ‘lifestyle’ business (in recruitment) for several years now. I’ve never actually thought of it as a ‘lifestyle’ business. Just a business, pounds in (hopefully) more than pounds out.
anthony sandberg
26 July 2010
7:07 pm
I’ve lived my passion through my business, http://www.ocsc.com for 31 years. It has provided me a nice living financially – but more important every day I go to work it is a joy. I love what I do and who I get to be sharing my passion for sailing and adventure. I can’t imagine any amount of money could replace the freedom to create and be in the enviroment of my choice. In fact I could duplicate our operation dozens or hundreds of times across the nation – but for me we are right sized which is more important. Follow you bliss – money is the least of its rewards.
Anthony Sandberg
President/Founder
OCSC SAILING
Berkeley CA
Kate Bickford
15 August 2010
2:14 pm
Hi
Brilliant. I run an international lifestyle business from home having come from BBC News and I love it. I am involved in the growing business of Network Marketing, the most cost effective and efficient way to get a product to market and guess who has set up his own Network Marketing business ? Donald Trump and he knows a thing or two about business. People need to open their eyes and their minds and look. It still might not be right for them, nothing is right for everybody but at least they make their own decision from knowledge and not ignorance and do what’s right for them,
Kate Bickford
Manager
Forever Living Products
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