Definition
A lifestyle business is a type of business setup and run by its owners primarily with the aim to sustain a particular level of income and provide a foundation to enjoy a particular lifestyle. Such businesses are often created by a person whose main objective is not necessarily to make a massive profit or grow the business extensively. The success of a lifestyle business is measured more in terms of work-life balance, rather than financial gain.
Key Takeaways
- A Lifestyle Business is a business set up and run by its founders with the primary aim of sustaining a desired level of income to maintain the owner’s lifestyle, rather than growing the company or maximizing profits.
- Since the focus is more on the living standards of the business owner rather than aggressive growth, the strategies, goals, and operations of a lifestyle business differ considerably from that of traditional startups.
- Being a personal-focused business model, Lifestyle Businesses don’t often seek external investment or financing. They are more about self-sustainability and affording the founder or owner the freedom to manage their work-life balance.
Importance
A Lifestyle Business is a significant financial term as it refers to a business model that is set up and run with the primary aim of sustaining a particular level of income and lifestyle for its owner.
This type of business is important because, unlike growth-oriented businesses, the primary goal is not to increase market shares or maximize profits, but to provide business owners with the freedom and flexibility to maintain a certain lifestyle while earning a steady stream of income.
It emphasizes work-life balance, and the success of such businesses is measured more by happiness, health, and personal fulfilment than by traditional economic indicators.
This concept has gained prominence in the modern economy, particularly with the shift towards remote and flexible work opportunities.
Explanation
A Lifestyle Business is designed and conceptualized by entrepreneurs with the primary aim of sustaining a certain level of income which will support their desired lifestyle. Instead of focusing on aggressive growth, profits and expansion, these businesses put emphasis on work-life balance, flexibility and personal fulfillment.
The purpose of a lifestyle business is to allow its owners to lead their chosen way of life while earning a sustainable income. It’s used to complement an individual’s interests, expertise and passions, rather than serving a larger market or maximizing profits.
Lifestyle businesses can span various industries, but are heavily prominent in areas such as travel, health and fitness, craftsmanship, and blogging. The business can be based on personal skills, hobbies or areas of expertise, aligning with the personal interests and passions of the owner.
The configuration of such ventures often allows them to work from virtually anywhere, thus offering a greater flexibility in terms of work hours and location. The objective isn’t to amass wealth or assets, but rather to maintain a certain quality of life, that otherwise might not be feasible in a traditional 9-5 job.
Examples of Lifestyle Business
Boutique Shops: A boutique clothing store is a typical example of a lifestyle business. For example, the owner might be a fashion enthusiast who loves curating unique pieces, setting up the shop layout, and interacting with customers. Here, generating a substantial income could be a secondary advantage to the pleasure and lifestyle that running the store provides.
Food Trucks: Many food truck owners launch their businesses not necessarily to earn a massive income or expand into a large corporation but simply because they have a passion for food and serving people. This passion and way of life are the key motivations, hence making their food truck a lifestyle business.
Freelance Photography: A freelance photographer could also be seen as operating a lifestyle business. They may have started their business out of the love for photography, flexibility, and freedom to decide their work hours and projects. Their primary driving force might not be to become a multimillion-dollar corporation, but to maintain a lifestyle where they can follow their passion and manage their work-life balance.
FAQs about Lifestyle Business
1. What is a Lifestyle Business?
A lifestyle business is a business set up and run by its founders primarily with the aim of sustaining a particular level of income and no more; or to provide a foundation from which to enjoy a particular lifestyle.
2. How is a Lifestyle Business different from other businesses?
Lifestyle businesses are designed to achieve a work/life balance for the owner, rather than maximizing profit. The business is built around the personal needs and lifestyle requirements of the owner, rather than with the aim of achieving as high a turnover as possible.
3. What are examples of Lifestyle Businesses?
Lifestyle businesses can vary widely, but some examples could be a craft shop owner who works only a few hours a day, a freelancer who works from the beach, or a digital nomad running a blog whilst traveling around the world.
4. Can a Lifestyle Business eventually grow into a large-scale enterprise?
Yes, it is possible for a lifestyle business to grow into a larger, more profit-oriented business, but this is not generally the aim when someone sets up a lifestyle business. The aim is usually to have a balance between work and life, and to have a business that supports rather than dominates the founder’s life.
5. Are Lifestyle Businesses popular?
Yes, they are becoming more popular, especially among people who want to balance work with family commitments, people seeking to escape the 9-5 routine, or people who want to travel whilst still earning an income.
Related Entrepreneurship Terms
- Self-Funded Business
- Profit Retention
- Work-Life Balance
- Personal Freedom
- Targetted Profits
Sources for More Information
- Investopedia: A leading global source of financial content on the web, Investopedia provides comprehensive and high-quality content about all finance-related topics, including lifestyle businesses.
- Entrepreneur.com: As an authority on entrepreneurship, this website provides vast resources, articles, and advice for anyone interested in starting or managing a business, including lifestyle businesses.
- Business News Daily: This site offers the latest news and advice on the subject at hand. It describes the options, business models, and advises on how to start and manage a lifestyle business.
- Harvard Business Review: HBR offers a wide range of articles and online resources on various business topics. It also gives expert advice and insights on many business models, including lifestyle businesses.
