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What is a Lifestyle Business?

What is a Lifestyle Business?

I used to hate lifestyle businesses. I looked down my nose at them, believing that they weren’t real businesses. Now, I’m a lifestyle business owner.

I’ve written a bestselling book about how to build a lifestyle business, and host the Ambitious Lifestyle Business podcast, where I interview other lifestyle business owners each month, to find out how they’ve designed their business around their lifestyle, rather than the other way around.

A lifestyle business is where the business owner’s needs come first, with the needs of the business playing second fiddle. Work to live, not live to work. If you are the majority shareholder in your business, then I believe you have a lifestyle business – the choices you make, and the way you run your business ultimately dictate the lifestyle that you and your family will enjoy. If the lifestyle you truly want involves supercars, fifty-grand Rolexes, and million-pound mansions, then you can design your business to deliver that lifestyle. But for most people, what they truly want is more modest than that – yet delivers a much greater “smiles-per-gallon”

The lifestyle you want will differ greatly from the lifestyle I would like. Desire is not one size fits all, so why should we all build our businesses the same way, with the same goal (more money) in mind?. It’s custom to YOU. Don’t like working Fridays? Fancy taking the whole month of December off each year to truly enjoy Christmas? Like the idea of spending every winter in the Caribbean, or your summers touring Europe?.

Would you rather be on the golf course than in the boardroom (or bored room as I used to call it in my civil service days!). Do you wish you could retire early (or even semi-retire right now)? Would being able to work around the school runs and school holidays make family life a hundred times better?. The lifestyle you truly desire (and the business you’ll design to fund and deliver that lifestyle) is completely individual.

My business exists purely to fund my dream lifestyle – not to generate huge piles of money, contribute millions to the country’s GDP or massage my ego by employing more people or having a larger turnover than my competitors.

It wasn’t always like that, though.

 

How did I discover lifestyle businesses?

When I first quit my day job, I worked from home, earned enough to pay my bills, and spent my spare time with my family, walking my dogs, watching football matches, and generally having fun.

Then I started earning “real” money – £1,000 a month soon became £10,000 a month. £10k a month became £25k a month. I should have been living the dream. But others were earning £50k a month, or £100k a month. I got into a willy-waving competition with them. In 18 months, my lifestyle business grew from me (and only me!) in my spare bedroom to a team of 15 over two offices.

Suddenly, what I (thought I) wanted changed – I didn’t want to work from home, have plenty of spare time walking the dogs, and having fun anymore – I wanted a skyscraper with my name on the side, a yacht in the harbour and a supercar in the driveway of my multi-million-pound mansion.

What an arsehole.

For the next few years, 100-hour working weeks, regular all-nighters, and overwhelming stress became the norm. I got fat, stressed, and ill.

lifestyle business owner

Fat, sick, and stressed to the eyeballs – that was the lifestyle my business gave me.

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And then we had kids. I remember sitting in an MOT garage, reading Alan Sugar’s biography, about four months after my eldest was born.  At the time, I hero-worshipped guys like Lord Sugar and Richard Branson – people who had built HUGE corporations, with hundreds of staff. I truly believed that I was building the next Amstrad or Virgin. I thought what I wanted was a BIG business, until I read one line in Lord Sugar’s book: “I never really saw my kids much when they were growing up.”

That hit me like a bloody sledgehammer. There I was, a new dad, hero-worshipping someone who didn’t spend any time with his kids. At that moment, I knew I’d started living someone else’s dream. What I truly wanted was to be there for my kids throughout their lives. I wanted to be the dad who’s there at every sports day, every assembly, every school run, who doesn’t work school holidays, and who loves playing with them and spending time with them – That’s what was important to me. 

Alan Sugar Lifestyle Businesses

Alan Sugar, a man who built HUGE businesses, ultimately taught me everything I needed to know about wanting a lifestyle business.

The minute I got home from the MOT centre, I took out a blank piece of paper, and wrote down my ideal job description:

“To do what I want, where I want, how I want, when I want…

 

If I want…”

That very clearly defines the lifestyle that I truly want from my business – total freedom. My business now had one purpose, and ONE purpose only: to provide me with the lifestyle I want. Total freedom to choose whether to work or not. To be in total control of WHAT I work on. To be able to work from ANYWHERE in the world, and to do things MY way.

That’s the lifestyle I wanted – so I designed my business to provide that lifestyle.

 

Introducing the AMBITIOUS lifestyle business

I’ll be honest – My biggest problem with pivoting to a lifestyle business was my ego – what will people think? Will they think I’ve failed as a “proper” businessman, and that I’m giving up, and “settling” for a lifestyle business instead?

I blame Dragon’s Den. Each week, small business owners would be paraded in front of the Dragons, explaining that they’ve started up a small business making their own products. The uber-wealthy dragons would sneer at them, ridicule them for not wearing a pinstripe suit, accuse the poor person of wasting their valuable time, and then dismiss them with the line “This will only ever be a lifestyle business, it’s not a real business… I’m out.”

I heard that line time and time again – “lifestyle businesses are not real businesses.” And it’s bollocks. Utter bollocks.

Peter Jones on lifestyle businesses

Peter Jones: fan of nice suits. Not so keen on lifestyle businesses.

The success of a business can only be measured by the bottom line (net profit) – it cannot be measured by the top line (turnover). The flow of cash is not the same as the capture of profits.

Watching millions flowing through your company and capturing 1% of it isn’t that impressive. A lifestyle business with one-tenth of the turnover, but a 10% profit margin is exactly as successful as the “real” business.

£5,000,000 turnover x 1% profit margin = £50,000 profit

 

£500,000 turnover x 10% profit margin = £50,000 profit

If you’re making 1% or 2% on the cash flowing through your business, you HAVE to be a BIG business to stand a chance. By contrast, when you’re making 30% or 40% net margins, you can be as big or small as you want to be. Lifestyle businesses benefit from lower overheads, higher margins, increased customer loyalty, and don’t have to work as hard (which as a self-described “lazy entrepreneur”, is my favourite part!) The success of a business is ultimately determined by the quality of life it delivers to the owner, not by the number of people it employs, how fancy its offices are, or whether you wear a pinstripe suit.

I wanted a lifestyle business but wasn’t content to make cupcakes in my kitchen for less than minimum wage. I was still ambitious, and the lifestyle I wanted still included a nice house, a nice car, and nice holidays (maximising my smiles-per-gallon on all of them!) So I simply added a word to the phrase “lifestyle business”, and that kept my ego happy.

The ambitious, lifestyle business was born.

“I hate being busy. I’m the laziest ambitious person I know.”

 

Tim Kreider

 

How do you start a lifestyle business?

All businesses exist to solve problems for people. How do you start solving problems? You find one person with that problem, and see if:

a) you can solve it for them – and

b) they’re willing to pay to have that problem resolved.

If the answer to both a) and b) is yes, you’re in business! Solve for one. Solve for two. Keep solving and scaling. Most of what you need to know, you’ll figure out along the way – running a small business is like jumping out of a plane, and assembling the parachute on the way down. It’s exciting, exhilarating, and downright shit-scary at times!

How do you start a lifestyle business? You just start. You’ve got the advantage over those “real” businesses of low (or maybe zero!) overheads, and if you’ve baked in a nice healthy profit margin, you’ve got a huge amount of wriggle room to make mistakes – you can get a LOT of things wrong, and still be successful with strong margins!

lifestyle business book

I’ve written a bestselling book on building ambitious lifestyle businesses.
You can get a FREE sample chapter here.

 

How do lifestyle businesses make money?

The same way any business makes money – they solve problems for people who are willing to pay to have their problem solved. Some lifestyle business owners seem to forget this. They focus on doing what they love (making cupcakes in their kitchen is the often-used example) and have no grasp of basic business principles – margins, marketing, distribution, overheads, etc. As mentioned above, the lifestyle business advantage should be low overheads and high margins. If your lifestyle business isn’t making money, it’s likely to be for one of two reasons:

  1. No one’s buying. You haven’t identified your target market correctly (or you’ve created a product/service that no one wants. Solve problems that people want to be solved.
  2. People are buying, but you’re not profitable. Your business model is broken – your profit margin may be too low, your overheads too high.. or both!

To help design a profitable ambitious lifestyle business, you can download a FREE sample chapter of my bestselling book Big Ideas.. for Small Businesses.

 

Lifestyle business examples and ideas

An ambitious lifestyle business doesn’t have to mean making cupcakes in your kitchen. I’ve helped coach hundreds of small business owners, helping them to design their own ambitious lifestyle business, and (more importantly!) deliver the lifestyle they each want. Every month on the Ambitious Lifestyle Business podcast, I chat with a different lifestyle business owner, helping you to see how anybody, in any sector can create their own version of an ambitious lifestyle business.

You’ll hear amazing stories, including:

ambitious lifestyle business podcast

The Ambitious Lifestyle Business podcast is available wherever you get your podcasts – There’s a new episode on the first Thursday of every month.

Of course, I’m running my own ambitious lifestyle businesses too – including a sports betting business, an investment portfolio, writing books, and coaching ambitious lifestyle business owners – all from the comfort of my home office. The overheads are low, but also the commute is a dream!

 

Lifestyle business disadvantages

Yes, despite the ambitious lifestyle business propaganda I’ve been spouting thus far, there are some disadvantages to having a lifestyle business.

The most common is the lifestyle business owner not making any money, which as I’ve already touched on above usually comes because they forget to add that crucial word: ambitious. They sell a few products or services to their friends and family and don’t scale up. Or, they do scale up, but don’t know their numbers so don’t have the margin to make their business work – their business model is broken. To make sure YOUR lifestyle business is both ambitious AND profitable, you can download a FREE sample chapter of my bestselling book Big Ideas.. for Small Businesses.

Another common downside of having a lifestyle business is that it’s not a business you can easily sell or exit, because a lifestyle business is so personal to you – if you’ve modeled your business around my ideal job description, then it’ll be designed to deliver what you want when you want, how you want, where you want… if you want. That won’t necessarily be what I want, when I want etc… But the more ambitious your lifestyle business is, the less this is likely to be an issue – and at the end of the day, if you’re truly doing what you want when you want, how you want, where you want… if you want – why the hell would you want to sell anyway?

It’s like the famous story of the Brazilian fisherman, who catches enough fish in the morning to feed his family and friends, then spends the rest of the day relaxing in the sun, laughing with his buddies, playing with his kids, etc. One day the fisherman meets a powerful businessman, who encourages him to build a “real” business, with a fleet of boats, hundreds of workers, a floatation on the stock market, eventually selling the conglomerate for millions.

“What would I do then?” the fisherman asked. “Well then you could REALLY enjoy life,” replied the businessman. “You could go fishing in the morning, then spend the rest of the day relaxing in the sun, laughing with your buddies, playing with your kids, etc.”

 

Lifestyle business books

big ideas for small businesses

Big Ideas… for Small Businesses: My blueprint for designing an ambitious lifestyle business – you’ll discover the 5 magic ingredients that go into all my businesses.

 

company of one

Company of One: – How to build stability, simplicity, independence, and long-term resilience, starting small and becoming profitable as quickly as possible without the need for outside investment.

 

wok less make more

Work Less, Make More: Focuses on BOTH increasing income AND reducing hours, thus maximising your “smiles-per-gallon”

 

Lifestyle business for sale? – be careful you’re not buying a job.

I used to invest in small businesses (I don’t anymore – it’s far too much hard work for the lifestyle I want!), and a local Mexican restaurant came onto my radar.

I visited a few times and met with the owner, who on the face of it was living a great lifestyle – he drove a brand new Mercedes, and had a villa in Greece – all paid for by the profits from the restaurant.

However, because he’d optimised the entire business around the lifestyle HE wanted, his business was unsellable. His accounts showed a profit of just £26,500 a year, yet he assured me it was a lot more than that, with plenty of “cash deals” (also known as tax evasion, and quite illegal!). He took a small tax-efficient salary of £12k a year.

The owner wanted £180,000 for his business – based on a multiple of what he was taking out of the business (including his cash deals) – and valuing his time (80 hours a week managing the entire restaurant and bar) at zero. I explained that I could only pay £75,000 – a multiple of the official profits that were actually declared to HMRC – and even then, only if he could tell me where I could find a manager for the restaurant with decades of experience such as himself, willing to work 80 hours a week for £12,000 a year?

As the company’s sole shareholder, he’d created a fantastic ambitious lifestyle business for himself. But as a saleable asset? Sorry, but he wasn’t selling a business – he was selling a job.

Needless to say, I didn’t buy the business – and nor did anyone else. 3 years later, it’s still up for sale.

 

You don’t need to be a millionaire to live like a millionaire

When I added the word “ambitious” to my lifestyle business, I suddenly realised something I’d been getting wrong for years – I didn’t need to be a millionaire. I could simply live like a millionaire.

I didn’t need to own the hundred-acre country estate – what I needed was the free time to enjoy someone else’s estate, such as the National Trust, or English Heritage. I didn’t need to own a yacht or a supercar – I could hire either for a day or lease them for longer if I wanted. I didn’t need to own a villa in Spain and an apartment in the South of France. If my ambitious lifestyle business generates enough profit, I could rent villas and apartments all over the world anytime I like for a week, or a fortnight – or a long weekend – without having to worry about the maintenance and upkeep of them.

I didn’t need to own anything. All I needed was time and cash flow.

When I was in full-on hustle mode, I used to have a £2m mansion as my desktop background – I dreamed about that house day and night (on the rare occasions I actually slept at night rather than working). When I discovered my ambitious lifestyle business and my ultimate job description, I realised I didn’t want the house after all and deleted the picture.

He lives in a house… A very big house in the country. But I don’t!

Fast forward 15 years, and whilst walking the dog out in the gorgeous Devon countryside one Tuesday afternoon, I saw it. THE house. It was the first time I’d ever actually seen it in the flesh (I wanted it badly enough to wreck my health by overworking and stressing for 100 hours a week for years on end, but not badly enough to jump in the car and go and have a look at it!)

Seeing it for the first time in the flesh instantly took me back to the old desire – to live in this stunning multi-million pound property, with a Ferrari and a Lamborghini on the half-mile-long driveway. But that desire disappeared almost as quickly as it had popped into my head, as I thought once again about my ideal job description:

“To do what I want, where I want, how I want, when I want…

 

If I want…”

If I owned this house – I’d have to earn an extra £100k a year just to pay the mortgage. I’d lose almost half that money in tax and have to work far harder than I want to. My home insurance would probably cost ten times as much – as would my energy bills. I’d have to employ a full-time gardener to look after the grounds. And there are about 28 windows to clean! Speaking of blokes climbing up ladders, a property like this must be a huge target for burglars, thieves, and vandals.

But most pressing of all for me was this – if I owned that house today, I wouldn’t have been enjoying a leisurely walk in the countryside with my dog on that sunny Tuesday afternoon – I’d have been inside working, to pay for the bloody thing!

And that is most definitely NOT what I want…

 

john lamerton

About the Author: John Lamerton is a self-confessed “lazy entrepreneur and investor”. He’s been running ambitious lifestyle businesses for more than two decades – including a sports betting business, an investment portfolio, writing books, and coaching ambitious lifestyle business owners.

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They're the anti-gurus with a strong dislike of pseudo business psycho-babble. Their no-nonsense, straightforward approach with relatable and valuable advice has won them followers from all over the world. They've helped hundreds of business owners improve their businesses and lives.

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The One Percent Club will show you EXACTLY how to implement these 1% gains into your business, and how they can stack up to REALLY grow your business.

John released his first book “Big Ideas… for Small Businesses” in 2017, and it shot straight to the #1 bestseller list for Small Business and Entrepreneurship on Amazon, outselling books by Richard Branson, Alan Sugar and Duncan Bannatyne combined.

Since then, it’s sold thousands and thousands of copies all over the world, and attracted more than 100 five-star reviews. But more importantly, it’s changed the lives of small business owners all over the world, who now understand that running a lifestyle business isn’t a bad thing.

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