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Lifestyle Businesses – Why It’s Not About The Niche
By Quiet Light
“Choose a job you love, and you will never have to work a day in your life.”
This famous quote is often attributed to Confucius, and while its wisdom is worth pondering by anyone who’s looking to make the most of their time here on Earth, it may not be the best advice for aspiring entrepreneurs.
If doing what you love isn’t the best way to tackle business ownership, can you find success on a path that diverges from your true passion?
In my experience, the answer’s a resounding “yes.” In addition to my role as a broker for Quiet Light Brokerage, I’m also an entrepreneur who owns several lifestyle businesses, or businesses built to help me sustain my lifestyle, rather than indulge or expand my passions.
In my time as both a broker and an entrepreneur, I’ve learned a few key lessons that can help you make smarter choices when choosing a niche—and help you understand why you may find your greatest success in a business you never imagined yourself owning.
Looking Beyond The Niche
When you’re deciding what kind of business you want to start or buy, you might want to play to your strengths by choosing a niche that matches your interests and skills.
If you’re a foodie, you might be thinking about the restaurant business. If you’re a work-at-home mom, you may be thinking about how you can expand your crafting, consultancy, etc,. into a full-scale business by purchasing one already in your market. If you’re a professional branching out from a corporate job, you may be thinking about buying an established firm in your area of expertise that gives you an automatic market share and client list.
Everyone’s circumstances will be different, but whatever your interest or intention, developing a thorough understanding of your niche is essential to success.
Keep in mind, however, that you’re not necessarily beholden to a specific industry or market that speaks to your true passions. You can absolutely develop very successful businesses that are outside your target market or comfort zone—provided you’re willing to invest the necessary time and energy.
Doing so might be your best bet for business success. As it turns out, while the Mark Zuckerberg’s and Richard Branson’s of the world garner lots of press for their entrepreneurial zeal and mega-billion deals, a high percentage of small businesses rake in big cash from industries not generally regarded as “sexy” or “exciting” by most people. Forget Facebook or Google; think construction, retail, and real estate.
The True Value Of Lifestyle Businesses
Ask yourself “why am I starting a business?” Is it to pursue your passion, or to make money? If you’re chasing your dream and your enthusiasm outstrips your talent or the marketability of your particular passion, you might be setting yourself up for failure. “Do what you love” might actually be the worst possible advice you can follow.
Taking a search fund approach, and looking for a business that meets certain benchmarks for quality, performance, and return on investment is a smart way to start.
You don’t need a “big idea” or a deep passion for this kind of business—you just need business acumen and an interest in capitalizing on the steady returns and reliable prospects your new business offers.
Since you’re not looking to launch a dream, but to help fund your life, it’s important to look at four critical markers when you’re building or buying a lifestyle business:
- Profitability: This is obviously important as you want your new business to provide a steady, reliable income.
- Stability: The same traits that make your new business “boring” are the same ones that make it a reliable performer. A reliable business has multiple streams of revenue and traffic. In addition, they don’t capitalize on trends, but meet real and ongoing needs that will continue to exist for the foreseeable future.
- Strong Growth Potential: Does your new business have room to grow? Is it competing in an oversaturated market, or does it address a need within a self-renewing, expanding demographic?
- Ease of Management: Since you’re buying or starting this business with a decidedly non-passionate approach, it makes sense to choose one that’s easy to manage and doesn’t consume more of your time than absolutely necessary. Information, advertising, and affiliate sites that allow for maximum automation and minimal oversight are more likely to be “hands-off” for their owners.
Perhaps the most important question to ask yourself when considering a lifestyle business is this. Do you want to work on your business, or in it? Niche is important, but its significance pales in comparison to profitability, stability, growth, and ease of management when you’re looking to acquire a business that’s outside your personal interests but intended to support your lifestyle.
Buying or building a small business in a “boring” or underserved niche that might not hold personal interest for you, but is still a solid moneymaker, can give you the financial freedom to pursue the things you are passionate about.