What is a Lifestyle Business?

You may be wondering "what is a lifestyle business?"

If you've ever watched the TV Series "Shark Tank" or similar shows, you may have seen the investors say "oh, it's only a lifestyle business" as if that's a huge insult.

It's true that a lifestyle business is not a good target for venture capital or angel investors. However, a lifestyle business may be exactly what the entrepreneur wants and needs. Remember, the goal of starting a business is not to please potential investors. The main goal of your business is whatever drove you to start the endeavor in the first place.

Keep reading to learn more about the definition of a lifestyle business, or see how it differs from a startup.


So What is a Lifestyle Business anyway?

You must have had a reason for starting your business or side hustle.

How do you define success for your business? What is your vision for the future?

If you define success as growing your business into a larger enterprise, or making tens of millions or more in profit, then you have a startup not a lifestyle business.

But if your vision for the future of your business is to allow you to meet your financial needs, and give you the freedom, flexibility and autonomy to do the things you enjoy in life, then that is a lifestyle business.


WHAT IS A LIFESTYLE BUSINESS?

A lifestyle business is a small business whose main goal is to meet the lifestyle needs of the owner(s).

A lifestyle business may be a small solo venture, a hobby-based side hustle, an individual freelancer or consultant, or a family business. It may have employees, but usually remains fairly small. Lifestyle businesses also typically have low capital expenses or up-front investment requirements. The business owner is not focused on maximizing the growth of the business, unlike a startup. Instead, their objective is to meet their financial and lifestyle needs, but no more.


Is A Lifestyle Business Just a Hobby?

The short answer? No. A lifestyle business is not the same thing as a hobby. The objectives of each are different.

A hobby is something that you do only because you enjoy it. You have no expectation to get paid.

A lifestyle business may well be based on your hobby, like photography. But your goal is to make money from the business, while at the same time enjoying the process.

However, if your lifestyle business does not bring in much money yet, then from a tax perspective you may be able to treat it as a hobby until it actually starts turning enough revenue. You'll have to consult a tax professional to see what the laws are in your region.


Examples of Lifestyle Businesses

What is a lifestyle business example?  There are many different types of lifestyle businesses. 

Here are a few examples, although there are many other possibilities as well:


Ecommerce Business selling physical products

There are many examples of small ecommerce lifestyle businesses selling hard goods (physical products that come in the mail).

You might sell your handmade items on Etsy - anything from jewelry to custom furniture.

Or you can sell from a website that you set up yourself, or use Shopify or another ecommerce platform.

You could also purchase vintage items at thrift stores or garage sales, and resell for a profit on various online marketplaces such as eBay, Etsy or LetGo.


Ecommerce Business Selling Downloadable Products

Your lifestyle business could sell just downloadable or electronic products, so you don't have to ship anything to your customers.

For example, you could write ebooks and sell them on Kindle or make them available on your website as a PDF.

Electronic products can also be sold on some marketplaces, like Etsy where downloadable patterns and printables are very popular.



Freelancing or Consulting

Many lifestyle entrepreneurs will sell their services, either via traditional consulting or by freelancing on the various freelance marketplaces that are available online: UpWork, Guru, Fiverr, PeoplePerHour and many others.


Other Examples of Lifestyle Businesses

There are many other types of lifestyle businesses. The options are only limited by your interests and your imagination.  If you enjoy writing then you might aim to be a professional blogger, or online writer, and make money through advertising or referral fees. If you are good at social media and comfortable in front of the camera, you could aim to be a social media "influencer".

In actual fact, a lifestyle business is often based on a combination of any or all of these options. For example, someone who loves to cook might write and sell a recipe ebook, have a blog about cooking, run an online podcast on cooking Q&A, and sell homemade relishes and sauces online.


What is a Lifestyle Business that's best for you?

No one can answer that question but you. However, the wonderful thing about having a lifestyle business is that you have complete autonomy and flexibility to run it how YOU decide.

If there are minimal up-front costs, employees or investors, then you have the ability to pivot and evolve the business as you need to. 

A healthy lifestyle business is often a bit of a collage of the owner's interests and opportunities. It doesn't have to be one thing, and it can evolve over time. 

So, what are you waiting for?  What is a lifestyle business that you can start?