MD Andersen CPA PA is dedicated to helping business owners transform into Lifestyle Entrepreneurs, but what exactly does that mean? A quick Google search will provide you with a basic definition:
An individual that creates a business with the purpose of altering their personal lifestyle and not for the sole purpose of making profits. A lifestyle entrepreneur focuses more on the life rewards provided to people that enjoy and have a passion for what they are doing.
Many business owners share these aspirations, seeking a balance of growth and freedom that allows them to lead happier, more fulfilled lives. We talk to entrepreneurs every day and their need for more flexibility in their personal and professional lives is a driving force behind the Lifestyle F.I.L.E.s. Unfortunately, very few people have ever heard of the term Lifestyle Entrepreneur. While gaining in popularity, particularly among those who have discovered the freedom of remote work, it is not widely evangelized in the more established business community.
So, why the hesitation?
One of the biggest misconceptions is the word “lifestyle” itself, which is often associated with the brands of celebrities, bloggers, and other influencers seeking to monetize their online fame. These businesses are considered part of a new lifestyle industry that often blurs the line between personal and professional life. Some of them are highly successful and enjoy an unusual amount of freedom and flexibility. Are these owners also Lifestyle Entrepreneurs? Possibly.
It follows logically that a Lifestyle Entrepreneur owns a “lifestyle business”, but unfortunately, this term is also loaded with negative connotations. According to some venture capitalists, a lifestyle business is too small to be taken seriously. It is the opposite of a start-up, a business created for reasons other than profit and not positioned for rapid growth and capital investment. Owners of these types of businesses are often solopreneurs and tend to maintain modest income goals. Are these owners also Lifestyle Entrepreneurs? Some of them.
Both of the above examples seemingly fit the definition of Lifestyle Entrepreneurship. They create a business, do work they enjoy, and live life on their own terms. However, there remains one critical factor not fully addressed, and as CPAs, we feel compelled to point it out. Not all these ventures are financially healthy enough to support the owner’s lifestyle in the long run. When you factor in the reality of retirement savings, family responsibilities, taxes, debt, and other ongoing obligations, a basic rule of business still applies.
To be a Lifestyle Entrepreneur, like any successful entrepreneur, you need to maintain a scalable business that earns a profit.
This is why true Lifestyle Entrepreneurship is not exclusive to reality stars, bloggers and freelancers. It is actually better suited to traditional business owners who want to become better managers and reprioritize their personal and professional lives. Owners will find it far easier to adjust and accommodate to lifestyle needs if there is a business capable of generating profit already in place.
Other entrepreneurs may find their existing business cannot realistically support their lifestyle goals. This common obstacle requires one to start from the beginning and re-evaluate their business model. To help shorten this learning curve, our recently published Lifestyle Entrepreneur Guidebook focuses on cost-effective business planning, analysis and preparation to start the process.
The same business principles hold true no matter where you start, what industry you’re in, or how big you want your business to become. There’s room for (almost) everyone.
Why do we say “almost” everyone? Not every business owner is suited to Lifestyle Entrepreneurship, and that’s a good thing. There will always be a subset of ambitious individuals willing to sacrifice everything else in their life to realize their vision. Their determination is admirable and their results often exceed expectations.
We developed the Lifestyle F.I.L.E.s to help entrepreneurs realize there are alternatives to this single-minded strategy. It is possible to strike a balance, avoid burnout, and maintain a steady pattern of growth. You may not have ever thought of becoming a Lifestyle Entrepreneur, but if you hold the dual goals of creating a successful business and living a higher quality of life, you are a lot closer than you think.
Matt Andersen, CPA loves analyzing data, people, and businesses. He is passionate about helping entrepreneurial-minded clients achieve their goals, keep more money in their pockets, and live a higher quality of life. In addition to tax and accounting services, Matt provides one-on-one coaching for various topics including lifestyle entrepreneurship, advanced tax planning, and new business creation.