Lifestyle entrepreneurship

Their reward for the risks they take is their desired lifestyle. Lifestyle entrepreneurs value a desired lifestyle over money. By this, I do not mean lifestyle entrepreneurs do not care about money but will choose a lifestyle first before thinking of the ways to structure the business to support their chosen lifestyle. So they get into business as a means to a particular lifestyle.

People go into lifestyle businesses for different reasons: Some people want freedom to travel, spend more time with family, pursue other projects, or live where ever they so desire. Being in business for themselves means that they can live in a certain place, have the freedom to pursue another passion (such as music, sailing, writing) and the autonomy to dictate when they do and don’t work. They tend to engage in higher value activities and use more infrastructure compared to survivalists. They therefore usually need to make a larger upfront investment in the business than survivalists but they get better returns. In most cases these people are forgoing the certainty of being an employee in an existing business for the freedom of autonomy and choice that goes with being an entrepreneur. The coffee shop owner who needs time for his music and the local nail parlour owner who wants afternoons off to spend with her kids are all examples of lifestyle entrepreneurs.

Characteristics of lifestyle entrepreneurship include:

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  An entrepreneurial process motivated by quality of life rather than growth. The main reason for existence is lifestyle with limited growth focus.
  
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  The undertaking of a lifestyle entrepreneurship orientation may result in the underutilization of resources.
  
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  Management activities in lifestyle entrepreneurship may be characterized as irrational.
  
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  There is a lack of focus on marketing and product development.
  
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  There is a failure to capitalize on information and communication technology opportunities in the market. The lifestyle entrepreneur may be unprepared for external threats.
  
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  According to Komppula (2004), lifestyle entrepreneurship is motivated by survival and the need to maintain the way of life.
  
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  Examples of lifestyle entrepreneurship ventures include: ‘mom and pop stores’, gas stations, small retail stores and mini marts.
  
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  Investment in fixed assets is modest.
  
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  Owners tend to invest long hours of work in the venture.
  
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  Lifestyle ventures tend to have a high risk of failure and profits from reselling the business tends to be low
  

The growth orientation is characterized by:

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  Expanding operations
  
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  Facilities such as a cash flow or credit line to finance growth prospects
  
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  Human resources that possess the skills, abilities and competences to perpetuate a growth culture