Entrepreneurial Choices: Startup or Lifestyle Business

Author: Notre Dame ESTEEM

Entrepreneurial Choices: Startup or Lifestyle Business

To most people the word entrepreneur is synonymous with the fast pace startup world. However, it is also synonymous with the idea of being your own boss, increased flexibility and having more control over your work life. The difference is in the path you take when you become an entrepreneur, and this decision will affect which "entrepreneur" you are. 

The startup world is one filled with long hours, searching for funding and huge payouts when, at the end, you sell your company or cash out. It's the high risk high reward game and when it works it can be an incredibly exciting adventure. However, those perks of being your own boss, flexibility and having more control are  given up as you are often working 80 hour weeks to prove viability to investors who have now become your boss. Most startup entrepreneurs also have an exit strategy that allows for investments to be recouped sometimes at an extremely high profit.

On the other hand, there is the lifestyle business entrepreneur. This entrepreneur is generally in the service industry or a small business owner who is simply working to pay the bills with the flexibility and control of being your own boss. These entrepreneurs often never look for investors with most investment money coming from their own savings or family members. For the lifestyle entrepreneur the exit is retirement, when they finally get to cash out although profits have generally been realized over the time that they were running the business. 

The difference between the two is mostly based on your incentive for wanting to be an entrepreneur in the first place - are you owning your own business to try and make a lot of money or are you in it for the lifestyle? In a 2008 survey we saw that 90% of small business owners do so because of the lifestyle, however since the recession another study showed that the desire for profits has been the true passion of 54% of new startups. 

There is no perfect answer to which type of entrepreneur you want to be, the lifestyle entrepreneur is constantly looking for new clients or sales which often end up taking up more time than actually performing your passion and for startups the nature of the business is often too stressful for most. However, both have huge rewards that should be weighed into the equation.

How do you view yourself, are you a startup entrepreneur or a lifestyle entrepreneur?