Is your business ownership currently a Lifestyle Business?

Business Ownership: The Lifestyle Business
The lifestyle business is usually a small business built around one or two people and is often operated by people with an expertise that decided to create an income and lifestyle for themselves, rather than be employed by someone else. They like the freedom it gives them, they like being their own boss and the venture allows them the flexibility to live a certain lifestyle. Trades-people, Consultants, Beauty Therapists, Engineers, Advertising Experts, Independent Sales Agents who work by themselves or with a small support staff or strategic partners often fit in this category. With a lifestyle business the key person(s) are the business. They personally bring in most of the income. If they lose interest or for some other reason stop working the business, the business usually disappears. The business can usually be started on a small investment, their expertise is their main asset and the owners often work from their home or shared premises with low overheads. Rather than being seen as a business owner, they are more likely to be viewed as self employed individuals. The informal sector of business owners in Canada would most likely fit in this group, as well. (Buskers, crafts-people, etc.) Most lifestyle business owners are content with the lifestyle their businesses give them and are not trying to build a big business.

Advantages:

•    You are Self Employed and you have the free-dom to choose how much you want or need to work and who you want to have as clients.
•    Usually work at home or close to home. The family is included or seen a lot.
•    You do most of the work yourself and have con¬trol over the quality of work and client relation¬ships.
•    Minimal financial investment to get started.
•    You can build the business part time while still being employed.
•    Low financial overheads.
•    Very little need for debts and financial  obligations.
•    You can quickly hit the financial break-even mark.
•    Financial control and financial management is fairly simple.
•    Your expertise and skills are usually your main assets. It cannot be taken away from you.
•    You can dabble in a number of income gene-rating opportunities without risking the success of the business.
•    Easily change direction or adapt to new situa-tions or opportunities.
•    Very few people to lead or manage. Less people hassles.
•    You can quite easily shut the business down and do something else.

Disadvantages:

•    You often “over commit” and have minimal support and help in your area of expertise. The result can be many long hours of work.
•    Interference or distractions by family members because you work at home or close to home can negatively affect your productivity and energy.
•    Miss out on bigger opportunities because of lack of personal capacity or additional exper-tise.
•    No one to answer to, therefore causing a lack of self-discipline to continually implement best practices and habits.
•    Working alone can be lonely and you miss the input from co-workers and partners. When you are down and have to pick yourself up, very little emotional support.
•    You may lack the sales ability or delivery ability therefore minimising your success. It is difficult to be skilled in all areas.
•    Inconsistent cash flow. While you are providing your service, handling the project or creating your product, etc. you may not be selling and marketing. This causes the “feast or famine” situation.
•    If an unforeseen unfortunate situation (accident, sickness, family tragedy, family conflict) hap¬pens to you, your cash flow could suffer to the extent that it could close your business down and put you in a tough financial position.
•    It can be quite difficult to access bank support. (Due to the difficulty of bank based loans, you would likely go to friends and family for loans. We recommend you use http://www.kasu.ca in Canada. Contact them for a guide at info@kasu.ca on how to use personal loans to finance your business.)

There are three types of business ownership positions:

1.    The Lifestyle Business
2.    The Community or Generic Business
3.    The High Growth Business

This blog has been prepared by Ryan Anthony Gibson and the source is Bill Gibson’s Business Success Series by http://www.kbitraining.com