Lifestyle business vs. growth business: which one do you actually want?

It's easy to believe that every successful business has to grow bigger every year. But success looks different for different people.

You may know what you want right off the bat. When you began to think about starting your business or training program, you had an idea in mind, and feelings associated with it. At some point, even before you began working toward your business license, you may have had an idealized version of the possibilities for your venture in mind. What was it? Is it still there? This answer decides the financial direction of your business.

A lifestyle business is one that focuses on supporting the lifestyle you want. It fits into your life, not the other way around. The business is usually built around your personal schedule, can be very flexible, and allows you to take home more excess income, rather than keeping it in the bank for future business projects.

A growth business is one that focuses on expansion. Excess funds (money left over after covering expenses and savings goals) are reinvested into the business, rather than taking more owner pay. Financial goals may include purchasing assets, renovating, team or service expansion, etc. This type of business may absolutely support a lifestyle that you want, but the business itself is the primary focus.

You can always do both. For example, if you have money coming in each week that is in excess of what you’ve allocated for your budget, you can choose to put some of that excess into your owner pay, and reinvest the rest. You can decide you want to arrange your schedule so that it suits you, and also expand your team. It does not have to be black-and-white. It completely depends on your vision for the business.

It’s important to note that whether you want a lifestyle-based business, a growth-based business, or a hybrid of the two, you can always change your mind. Because we are talking about allocation of excess funds, changing your mind only affects your optional decisions. So you can accumulate all you want in a future investments account for a while, and then decide that you’d rather live more comfortably and take it as owner pay. It’s totally up to you.

Businesses evolve, circumstances change, life happens. Figuring out what is important to you in the way you structure your business is absolutely valuable, and can serve as a great foundation for your future direction. Spend the time you need to think about it and flesh it out on a high level.

Once you’ve thought about your vision for a while and have written it down, step back and move on to something else. You don’t want to become too attached or set on things working exactly as planned; your vision is meant to drive and guide your business, not determine every step you take. The nature of business is not static; just as in regular, personal life things don’t always go as planned, it’s the same in any business. Hold onto your vision, but not too tightly; you don’t want it to choke 😉 .

Start simple and start now.