Should I Create a Lifestyle Business or a Startup?

summer-336664_960_720I’ve been actively running my own businesses for several years now.

During that time I’ve been through most of the different modes – employee, contractor, freelancer, limited company, online startup, lifestyle business.

So which is better – a lifestyle business, or a startup? And what’s the difference between the two?

 

Should I Create a Lifestyle Business or a Startup?

We hear a lot about lifestyle businesses. And we also hear a lot about startups.

Startups especially seem to be trending right now.

I’ve come to the conclusion that the best way to do business and to be your own boss is to run a lifestyle business in preference to all the other options. Including startups.

The reason?

A lifestyle business does exactly what it says – it enables you to put your own desired lifestyle first.

But what exactly do people mean anyway when they talk about a “lifestyle business”?

And how does a lifestyle business differ from a “startup”?

What’s The Difference Between a Lifestyle Business and a Startup?

It’s difficult to define definitively what the difference is between a lifestyle business and a startup. And different people also have different views on the meanings.

Traditionally, starting a small business meant starting a “bricks and mortar” type operation. You rented or leased retail premises, or perhaps a workshop, or maybe office space somewhere.

And you then went in each day and did your thing. Selling, processing, or maybe even making whatever it was you were aiming to sell. It was very simple. You were a “small business” or a “sole trader”. That was it. No one had ever heard of a “startup”, let alone a “lifestyle business”.

But an increasing number of new businesses nowadays are no longer solely “bricks and mortar” based. Or even physically based at all.

The reason for this of course is one thing.

The Internet.

The Web has made it possible for a business to operate and sell products or services online. The marketing channel for such businesses is now the Internet.

And in the case of digital products and services, the Internet, or more precisely the computer, is also the actual production channel as well.

What’s more these two facts now make it possible to start a business with much less starting capital and overhead than was the case in the past.

There’s also now a demand for all kinds of new services which are accessed via computers – both PCs and laptops, as well as tablets and smartphones.

So this has made possible a new kind of business startup that we didn’t have in the past. You could call this the digital startup phenomena.

The Dot-Com Boom

This phenomena really began some 15 years ago with the so-called “New Economy” of small “dot com” businesses that sprang up suddenly like wildfire, especially in the US. This was effectively the first wave of the digital startup phenomena.

Like many such new economic waves, this one came to a sudden end and people everywhere were then talking about the “Dot com crash”.

I recall working as a freelancer for one such Internet startup around that time – and they were very anxious not be referred to as a “dot com”, saying they were an “Internet startup” instead! The term “dot com” was already adversely tainted by events and the media and “dot com” companies crashing left right and centre, and they didn’t want to be associated with that. Nonetheless that didn’t prevent them from also going under shortly after I left.

A lot of these dot com “New Economy” businesses were renting office space, employing a team of people, either as employees or as contractors, or some combination of the two. And they required presentee-ism by the owners and bosses, who had to be present and working in the office – and watching over the staff, for long hours every day.

Now here we are a good ten and more years later and we are now into the second new digital startup wave.

This time round I think it has more substance. But it’s also likely in my opinion that startups and firms will once again overextend themselves with over-optimism and over-judge the market and we will then once again see a shake out. That’s just how these innovation waves tend to proceed in practice.

Nonetheless, there is certainly plenty of demand there and a lot of potential for implementing and delivering new services via the Internet – especially for the mobile apps market.

Along Came The Cloud

And a lot of things have also changed in the meantime over this last decade.

Cloud services have developed. It’s now possible to contract out or outsource, or “insource” depending on how you look at it, services for your business – and from pretty well anywhere in the world. This brings benefits in terms of flexibility and convenience, as well as lower costs and overheads.

There are now Cloud-based businesses which are run pretty well “virtually”.

They may have no actual physical office address – other than the registered office of their lawyer or accountant for company registration purposes. Their staff can be scattered around the world and work remote for the company using team collaboration software, Skype, webinar meetup and other online services.

And of course mobile has taken off.

Your clients can be global too. Location hardly comes into it anymore.

All this means it’s also possible and viable in some case to run a digital online business startup as a lifestyle business much more than it ever was before.

For Me, Solopreneur is Best

Traditionally we think of a “startup” as being something involving a corporate entity, a physical office presence and multiple staff (and possibly an army of unpaid interns as well).

Another characteristic of startups is that they are may involve multiple partners, rather than a sole entrepreneur. They can have large capital investment requirements. Possibly venture capital may be involved.

But there are also smaller startups – solopreneurs, who are one-man – or woman, businesses which do not require or involve that kind of overhead. This can be where we cross over into the sector of “lifestyle business”

I’ve also worked in the past as a self-employed contractor on the premises of corporates. I’m not interested in that anymore. I now connect with my customers and clients directly using the Web, via online meetups, and via Skype. There’s no need to be physically on their premises any more.

I’m not interested in running a conventional larger scale startup. That would involve overhead, hassle, and stress which I don’t want to take on board. As well as answering to investors and banks.

I do not want to commute to sit in some skyscraper every day. Been there, done that. I don’t want to time clock employees. I do not want to have to employ staff. I do not want commercial premises.

I like to keep things small and manageable and I like to be able to run my business from anywhere. That for me is the ideal business model.

Partly it also depends upon the scale you are aiming for. If you are aiming to build something big, then it’s likely that you may need to take on those kind of fixed physical overheads.

Startups are also much more risky. There is more money involved.

There is also much more control. You are subject to the decisions and requirements of the venture capital investors. It can be very easy in that situation for you the founder to effectively become an employee.

Limited companies also develop an appetite of their own. You have to continually feed them, with products, markets, and sales. Which will mean increased overheads. There’s no way around that.

So I would say, a startup is less about prioritizing lifestyle than it is about making money for those involved. Those involved will of course mean yourself, but they can also mean your partners, any venture capital “angel investors”, and possibly also the bank as well.

For me personally, that’s not a good place to be.

But as they say “your mileage may vary”. It depends what your business is aiming to do.

A lifestyle business is much smaller scale. It’s about feeding and maintaining one sole entrepreneur and not a whole group of entrepreneurs. It’s much more of a freelancer lifestyle than is the case with a startup. It’s much more individual and personal, tailored to the needs of one individual.

Starting a business is ultimately all about your own personal fulfillment in life.

This can involve things like setting your own working hours, not having to commute to an office, working from home, or from your laptop anywhere you like, and enjoying all the advantages that come with that.

Entrepreneurs who start a lifestyle businesses do this because they want to live the life that they really want. That has priority over all other considerations.

What’s The Best Business Model For You – Lifestyle Business or Startup?

The answer is: it depends upon what it is you are aiming to achieve.

What are your goals in business? And what kind of lifestyle do you know you want, and which lifestyle do you know you definitely DON’T want?

Once you are clear about these questions, you’ll be in a position to decide which business model is best for you – lifestyle business or startup.

There’s no single right answer for everyone. There’s no one size fits all. There are different paths you can take.

Which one is best for you all depends upon your intentions, preferences – and your motivations.

But my advice would be: take a good hard look at the lifestyle you are aiming for – and go from there!

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