A company and a lifestyle business are two different types of businesses. When someone says they are forming a startup, they are forming a startup company. When someone says they are starting a business, they might be referring to a company, but they might be referring to a lifestyle business.
A lifestyle business is some sort of business which exists with the intention to stay a certain size to support whatever lifestyle makes the owner of the business satisfied. These businesses are typically owned by a family or one or two people. Examples of a typical lifestyle business is a family owned restaurant (not a chain or a franchise), a tailor, or a plumber.
Mentors explained the difference between the two to Mary and I repeatedly, usually sounding something like this: “What you are starting is a company. While some people start lifestyle businesses (which are just fine), you are starting something that will grow, that people can invest in, that will hopefully create many jobs in Arizona if you are successful.”
I am certain this was NOT the intent, but I kept interpreting: “Companies are for AWESOME people. Lifestyle businesses are for LOSERS. You want to help Arizona folks get jobs, right?” (And of course I do!)
What I wish I considered early on in the iTipArtists experience was to create a lifestyle business first, something on a small scale. It is possible to create a lifestyle business, run it for awhile, and then expand into a company later. For example, a carpet cleaning business can start as a lifestyle business owned by one person and grow into something like Stanley Steamer. A great mentor mentioned this idea to Mary and I after we’d been working on iTipArtists awhile and I think its a great idea.
Though I don’t feel that right now I have time for even a tiny lifestyle business I think I will in the future. Many stay-at-home moms eventually create a lifestyle business of some sort, so I know it can be done.
If I were to start another company in the future, I would start it small; I would sell a product for at least a year to truly understand the costs involved, research my customer, understand my market, and flesh out a business plan with experience and numbers behind it. I would treat it as a lifestyle business at first. If I could prove to myself (and my family) with numbers that it could grow, I would turn it into a company, after I had a chance to get to know the community of people I might want to hire.
I would also choose something I absolutely loved doing in case it stayed a lifestyle business.
With a startup company you have more of a “real JOB”. You will probably have a lot of management and need to put in a lot of hours. Often for a lot of years and then the end goal is to have some kind of big IPO where you get millions.
With a lifestyle business you don’t defer your life years into the future. Lifestyle businesses are mostly passion driven. In my own business I just work 3-4 months out of the year. The rest of the time I spend with my family, we travel, I pursue crazy ideas such as writing a book or simply start up projects I’m passionate about.
This is all because I have built my lifestyle business in such a way that allows me to enjoy life now. I simply cannot wait 5-10 years as I have small kids now and want to see them grow up 🙂