Bigger is always better. All growth is good. If you’ve decided to make that first foray into business, you’ll soon hear these sayings circulate in the world of startups and SMEs.
Yet many entrepreneurs don’t actually get into business to found the Next Big Thing. Nor is it everyone’s ultimate goal to mastermind an exit that will earn them millions and sail off into a comfortable retirement.
What if your intention behind starting a small business is to have greater freedom to do the work that you want in a way that aligns with your values? Sure, turning a profit is important, but not overriding.
A lifestyle business might be what you truly want. And sustaining that over the years, rather than endlessly chasing the next level, is the key challenge you face.
Research proves it works
The idea of a lifestyle business might conjure images of working out of a suitcase, setting up your office on the go, akin to the dream of digital nomadism. It’s possible to get to that point, but it will take at least as much effort as any job if not certainly more.
Before you dive in, then, the biggest question might be: does lifestyle entrepreneurship actually work? And there are two sides to that question. Does it allow you to make a living? Can the owner manage to be happy with a business that intentionally stays small?
With the obvious caveat that your mileage may vary, prior research into this matter indicates the answer to both is yes. Entrepreneurs who lack the intention to pursue growth do not compromise on company performance. And many such ventures studied also provided enhanced quality of life to the business owners.
Tied to personal factors
However, the potential for success is very different from actually translating it into results. Founding a lifestyle business can make it inherently tougher to convince investors. You’ll have to bootstrap, limiting things such as the equipment you can buy, office space and location, or personnel hiring decisions.
This places greater emphasis on the founder’s skills. Buying an air compressor and car lifts for your home garage is essential if you want to run a vintage auto repair shop as your lifestyle business. But you had best be able to do most, if not all, of the specialized repair work yourself. Without much growth, it’s harder to hire or outsource tasks to competent personnel.
A lifestyle business isn’t necessarily a one-man company with zero ambitions for growth. But the limitations are determined by personal factors. This raises the long-term question of how to sustain the venture as motivation and interest fluctuate.
Lessons on sustained success
An unlikely solution to this concern hails from Japan. The country is home to over half of the world’s companies aged 200 years or more. The life expectancy of a Japanese family business, or zaibatsu, is 52 years.
Cultural factors play a large role in this longevity, and they don’t always translate successfully into a Western setting. But one thing you can learn from them is rooted in the ‘i.e.’ system.
The goal of all parties in this system is never to maximize profit or liquidate ventures. They treat it as a relationship whose objective is to survive and prosper.
Western culture may not give you the foundation necessary to hire exclusively within your family or pass a business down several generations. But every owner can emphasize this approach of treating the business as something to be sustained, with a mandate of surviving and prospering forever.
Hire and train people with this mindset. Never grow beyond what can be sustained over decades, and divest your thinking away from mergers and exits. Plan long-term, with a priority on market share rather than profit. Your lifestyle business will be a living company for decades.