If you are a passionate business owner, it’s time to consider what you value most
The term ‘lifestyle entrepreneur’ was first coined by Lewis Howes and has become a popular term in business circles. But what exactly does it mean?
The concept of a lifestyle entrepreneur is probably best explained in comparison to the more straightforward and accepted understanding of the term “entrepreneur”.
An entrepreneur is commonly thought of as someone who is bold enough to take the risk and start their own business, hoping to make it a success. Over time, an entrepreneur may spy other opportunities to develop their business, start a second business or simply evolve as a business person. But while a typical entrepreneur might want to find business success simply because they have the drive and ambition to embrace the challenge of commerce, lifestyle entrepreneurs typically take a slightly different approach.
In the case of lifestyle entrepreneurs, they are aiming to make a success of their business in order to achieve their ultimate goal: being able to live the life they want. The end goal isn’t a successful business for the sake of business success; lifestyle entrepreneurs view a profitable business as a means to a more comfortable home life.
This distinction raises a few key questions, the first of which is: which kind of entrepreneur is the right one to be? Should you be living to work (and fuel all of your energy and passion into business success) or working to live (and use your business as a factor for achieving further goals)?
The second question this distinction raises is: does it matter? Is it important to know whether you are an entrepreneur or its lifestyle-based alternative? The short answer is yes. Different kinds of entrepreneurs run their businesses differently. Knowing what you wish to achieve will ultimately inform your next steps in business and help you set the right goals for you and those around you.
It should also be pointed out that you may sit somewhere in between on the spectrum here – eager to flex your entrepreneurial muscle but also keen to enjoy your lifestyle. And that’s ok, too.
What is the difference between an entrepreneur and a lifestyle entrepreneur?
Entrepreneurs are focused on business goals, while lifestyle entrepreneurs are focused on life goals. When you think about where you want to be in the future, do you automatically think about how successful your business will be at that time or do you think about what you personally will be doing with your time (family time, holidays, hobbies etc.)? Entrepreneurs align success with business success, whereas lifestyle entrepreneurs use their business as a means for success. This is a subtle yet significant business.
Entrepreneurs want as much profit as possible. Lifestyle entrepreneurs want enough profit to have adventures. For entrepreneurs, business goals typically centre on trying to build as much profit as quickly as possible, and continuing to build on this success with more clients, more investors and —generally — more work. Lifestyle entrepreneurs have a limit to the amount of work they want to put in, and are willing to sacrifice the potential of further profit in order to have more freedom or possibly free time with the family.
Both care about their business, but in different ways. For entrepreneurs, their business is their beloved creation, which they are willing to nurture with a lot of time, dedication and hard work, while lifestyle entrepreneurs value daily life over their business success. However, entrepreneurs are also more likely to have an exit strategy in place. Building a successful company and then selling it on for a tidy profit is a method of success for entrepreneurs, while lifestyle entrepreneurs are more likely to hold on to their business because they have designed it to fit perfectly around their routine and their work–life balance.
Entrepreneurs focus more on managing larger structures, while lifestyle entrepreneurs remain more involved at the transactional level. Moving further up the chain of command (or building a longer chain of command beneath you) is a way to help your overall business grow more efficiently. The alternative is to stay in close contact with employees working underneath you, connecting with clients and getting to know them personally.
Both will give up a 40 hours a week job for their business, but an entrepreneur will happily replace it with an 80 hour a week role while a lifestyle entrepreneur will replace it with a 4 hour a week role. Entrepreneurs are more likely to eat, sleep, sweat and bleed their business, putting in long hours, staying up late, getting up early, completing an array of tasks both complex and menial and sacrificing social time. Lifestyle entrepreneurs, however, have started their own business to do the opposite in the long term.
Which one do you think you are and which one do you want to be?
After reading the differences between these two business mindsets, most business owners can probably relate to both avenues to some degree. This makes sense, because these aren’t two distinct camps separated by clearly defined lines. This is a spectrum in which most business owners fall somewhere in the middle, but you might find that one of these categories resonates more with you than the other.
The way you are currently running your business should give you some insight into where you fall on the spectrum. Try evaluating how hands-on and involved you are within your business, and how much of your time it takes up outside of normal working hours. In short, it’s about discovering whether this is a business that works for you, or a business that you work for? Are you looking to experience wealth, or for a wealth of experience?
Neither answer is more correct than the other, but once you know where you fall you can see where you are succeeding and where you might be falling short. If your approach is more lifestyle-based, are there areas where you could stand to be a bit more business-minded and ambitious, like budgeting and opportunities for growth? Conversely, if you’re more like a typical entrepreneur, are you considering the importance of more emotional factors like rest, approachability and employee satisfaction as much as you should be?
How can you achieve your goals?
The thing that we can all take away from the approach of lifestyle entrepreneurs is the mindset that you don’t need to make millions before you can consider your business successful. We’d all like to be responsible for the next Instagram or Amazon, but would we be willing to put in the hours of hard slog it would take to create and sustain it? If the answer is yes, you are a firm entrepreneur in the truest sense. If the answer is no, you are probably more lifestyle-orientated.
Either way, setting clear goals is the first step to achieving them. Think about where you want to be in ten years’ time, then lower this to five years, then twelve months. Then break this first year down month by month to keep track of where you are in relation to where you need to be. Consider factors like client-base size, workplace location, employee number, social media following and, of course, financial growth. Where do you want to be and how are you going to get there?
If all this sounds a little too overwhelming, remember that there are always people who can help you. A trusted business support company can provide both necessary information and vital financial aid to give your business the best chance of success — whatever success means to you.
Contact TEDCO Business Support today and let’s get the conversation started. Call us on 0191 516 61 02 or email us at firstname.lastname@example.org.