What is a lifestyle business?
A lifestyle business allows its founder to maintain their desired lifestyle. It’s a business that requires minimal effort (once established) to keep running and provides a high level of freedom.
A lifestyle business brings in regular income that the founder wants to sustain. It can be an online or offline business. Many lifestyle businesses receive passive income.
What are the defining features of a lifestyle business?
The defining feature of a lifestyle business is that the owner decides the lifestyle they want first. That could be a lifestyle with more family time or more time spent traveling.
The lifestyle entrepreneur then builds a business that will complement their desired lifestyle.
Here are some other characteristics that define a lifestyle business:
- The owner can work when they want, from where they want
- High level of freedom (location, time, and financial)
- It doesn’t require high start-up costs
- It generates profit immediately
- Generates consistent income
- Rapid growth isn’t the main focus
- Selling the business isn’t a goal
- The founder can pursue their passion
- The business has longevity
- There are multiple income streams
Examples of lifestyle businesses
The beauty of a lifestyle business is the founders can create it based on their skills and interests. There’s no single niche for lifestyle businesses.
Online lifestyle businesses include:
- Selling online courses
- Running SaaS businesses
- Running ecommerce stores
- Selling ebooks
- Building membership websites
- Making money from social media
- Freelancing (for example, as a writer or designer)
- Online teaching or coaching
Why do people build lifestyle businesses?
A lifestyle business allows you to maintain a healthy work/life balance. People don’t found lifestyle businesses because they want to work 80-hour weeks. They want to work as little as required to sustain their life.
One of the most famous proponents of the lifestyle business is Tim Ferris, who wrote the book “4-hour Workweek.” In the book, entrepreneur Ferris documents how he automated systems in his companies to increase cash flow and liberate himself from traditional expectations.
Lifestyle business founders can work from wherever they like and take multiple vacation days. They don’t need to stay in one city to make an income and can work with clients all over the world. All that’s required is an internet connection.
Another appealing benefit of this type of business is that owners can fit their work around their other responsibilities, such as child care. They don’t have to answer to a boss and can work on their own terms.
Many lifestyle businesses are also passion projects. Lifestyle business owners often find a way to monetize a hobby such as photography, writing, or designing. Making an income doing something you’re passionate about is a dream goal for many.
What’s the difference between a startup and a lifestyle business?
Startups focus on innovating, fast growth, maximizing profits, and keeping investors happy. Many startups need high upfront investments to get running. They often need daily maintenance and interactions with customers to keep moving forward.
Most startups don’t make money straight away and need several years before they break even or turn a profit.
Lifestyle entrepreneurs typically don’t have investors or high start-up costs. Many lifestyle businesses don’t need much day-to-day maintenance. For simplification of processes, lifestyle businesses tend to automate a lot.
For example, if they’re selling an online course or stock photography. Once the initial work is done, the passive income can roll in. If the founder sets up a solid sales funnel that brings in regular customers, they don’t have to do much to keep the business ticking over.
Unlike startups with multiple investors and stakeholders, the only person the lifestyle entrepreneur needs to keep happy is themself. The lifestyle business owner has full ownership and control over the function and direction of their business.
What’s the downside of a lifestyle business?
Setting up a lifestyle business can take a lot of time and effort. Getting to the point where you make enough income to sustain your life and work takes time.
Lifestyle businesses often don’t have much potential for scaling. Usually, only one person runs the company, making rapid growth difficult.
How much does it cost to start a lifestyle business?
One of the positive aspects of a lifestyle business is the low cost of starting it. All you need is a computer or mobile phone and an internet connection.
Other costs of starting a lifestyle business include:
- Domain registration
- Web hosting
- Software subscriptions
- Paypal/Stripe/Shopify fees
- Content creation equipment (cameras, tripods, microphones)
- Incorporation of your business
- Tax on your profits
When you run a lifestyle business, you may want to outsource tasks such as admin or accounting to minimize your workload. Many lifestyle entrepreneurs have a virtual assistant or a freelancer who helps them with social media, web design, and content creation.