Entrepreneurs: Lifestyle or High Growth? Why not both?

I just started a book on my Kindle recently about learning better ways of finance for entrepreneurs. (Book details here.) One of the things the authors address right at the beginning is the differences between a lifestyle entrepreneur and a high growth entrepreneur. Let me break those definitions down for those not familiar:

Lifestyle - Someone who starts or runs a business to create a very consistent lifestyle for themselves. Not necessarily in it for the big money potential but more the financial stability to lead a standard middle-class life. Easiest example is the 'mom and pop' shops of the world.

High Growth - Someone who see their companies as assets or tools to lead to further investments. Always looking to continually grow their business in hopes to lead to future exponential profits or towards acquisition.

Now with that defined, let me get to the point. The author tends to think that as an entrepreneur you can only be one way or the other but I don't think it's true. I hope, in my life, to run multiple businesses concurrently and will consider how to run my businesses accordingly to their potentials. Some businesses that earn very consistent and recurring revenues may work for a 'lifestyle' investment and some may lend themselves to a 'high growth' play. I don't understand why I can't balance both like anyone would with their stock portfolios.

Maybe I'm missing the point. What kind of entrepreneur are you? Can you be both a lifestyle AND high growth entrepreneur?

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Sep 20, 2009

ryancarson said...

Hey Brad - I totally agree. I think you can have both.

Jeff Stephens said...

Brad, I see your point, and understand the author's point too. I think what you're saying is that you want to be an entrepreneur who doesn't sacrifice his enjoyable lifestyle and work-life balance. And in that sense, yes, you definitely can do that.

I the hard-core definition sense, I think "lifestyle entrepreneurs" aren't really entrepreneurs at all--they are small business people and independent consultants (this is not a bad thing, by the way, and I don't intend for it to sound that way). Entrepreneurs are people who start and build businesses....they don't run businesses. Lifestyle entrepreneurs tend to be more of the people who start and then run businesses.

Here's my metaphor: an entrepreneur is like a match--it ignites a fire, gets it going and growing, and then hands it off to something else like a candle to maintain it. Then, the match moves on to a new opportunity to ignite. In my metaphor, a lifestyle entrepreneur wants to be the match and the candle both, and hopes the candle will burn in a long, predictable and manageable way, whereas the entrepreneur is more into "lighting" the fires.

That's my two cents, my friend.
Jeff

Sep 21, 2009

Brad Garland said...

@ryancarson - Thanks for your reply. @jeff - I agree...I think entrepreneurs have to focus on more of working 'on' the business than 'in' the business. Many can't relish that control whether through their own control issues or from the backlash their employees give them. I love conversations like this!

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