date: 'Friday, August 28 2024' title: 'Lifestyle Business vs Growth Business' description: 'Explore the trade-offs of a lifestyle business vs a growth business. Decide which one is right for you.' image: 'lifestylevsgrowth_mioylw' author: 'Joshua Anderson' editor: 'Lindsey Woldt'

category: 'learn'

Lifestyle Business vs Growth Business

Written by Joshua Anderson • Edited by Lindsey Woldt

Would you want to own a business with large profit margins and fast growth if it meant the sacrifice of work-life balance and subsequent quality of life? Or would you prioritize a relaxed schedule focused on the other aspects of life over creating a billion-dollar business?

That essentially the summarizes the trade-offs of a lifestyle business vs growth business, but let's dive deeper into these concepts with examples and more detailed comparisons.

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The Lifestyle Business Examples

A lifestyle business operates under the idea of prioritizing a healthy work-life balance, at the expense of rapid growth and profit.

This business model focuses on cash flow and income that allows lifestyle business professionals to live the life they desire, without having to sacrifice a healthy work-life balance. However, unlike growth business models, who receive funding from investors, lifestyle business models self-supply funding.

Lifestyle business examples include: photographers, digital course creators, e-commerce, and mom and pop stores.

Here are the biggest pros and cons of a lifestyle business.

Lifestyle Business Advantages

• Flexibility/financial freedom
• Typically low overhead costs
• Focuses on healthy work culture

Lifestyle Business Disadvantages

• Very limited funding options
• Difficulty recruiting high-level professionals
• Lower chances for expansion/large gain

The Growth Business Strategy

A growth business has the goal of increasing the company's value quickly, seeking to return fast profits to the owner and stakeholders. While profit is important, increasing the company's valuation (or worth) is the main priority.

While employees of a business that subscribes to a growth business plan can still achieve a decent work-life balance, that is not a priority. A growth business model operates with the hopes of looking as desirable as possible to investors who may want to buy a stake or acquire the company.

Growth business model examples include companies like Google, Facebook, Amazon, and Tesla.

Let's take a look at the pros and cons of a growth business.

Growth Business Advantages

• Rapid growth, profit (although most of profits go back into growing the business)
• Receives funding from investors to help mitigate company costs
• Maintains a stable and complex infrastructure (managers, sales teams, operations teams, etc.)

Growth Business Disadvantages

• Less focus on a healthy work-life balance
• Quality of product may dwindle while expanding
• Money shortages to pay for overhead costs

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Lifestyle Business or Growth Business?

We'll answer that question with another question: what do you want out of life right now?

If you're someone who wants to start a company that focuses on the small, intricate details, and commits to a healthy balance between working and playing, we would of course suggest starting a lifestyle business.

But if you're looking to expand and profitize your company as fast as possible, at the expense of relaxation or free time, we'd encourage you to look into the creating a growth business plan.

While both plans can prove to be extremely fruitful, the model you select will depend on what you're willing to give up in order to achieve your company goals.

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