Doug Richard is an entrepreneur and investor, former
star of Dragons' Den and founder of School for
I have never understood the antipathy that otherwise rational
people have for the so-called 'lifestyle business'. Quite recently
I heard someone in a position of responsibility in the small
business community disparage lifestyle businesses. They weren't
real businesses, he said. They only enriched the owner, he said.
What the f**k, I thought to myself?
Even more puzzling was the unthinking regard that everyone holds
for the externally-funded business. 'Get angel funding', 'get
venture capital', 'get debt from a bank' is what I hear people
encouraging new entrepreneurs - as though the ability to raise
money equates to the ability to make money. It doesn't. Just as
measuring your business success by the number of people you employ
is vanity, not sanity.
The heart of the issue is this question: what constitutes
business success? In an age of growing awareness of carbon
footprint, in a time when the fastest-growing businesses are social
enterprises, at a point in the economic cycle when we need to drive
entrepreneurs to help solve social issues, we no longer have time
for these false dichotomies.
A business success can be measured on the bottom line. A
business success is not measured on its top line. I have heard
celebrity entrepreneurs brag about their businesses calling out
their total revenue as though the sheer volume of cash that their
business touched was somehow meaningful. I picture them skinny
dipping in all that cash as it washes by, cackling irrationally,
not realising that the flow of cash is not the same as the
stickiness of profit. The reality was that they made a skinny 1%
profit on all that cash. A business with one tenth the revenue that
makes 10% on its money is precisely as successful. Revenue is just
It is not measured by the number of people it employs. Over and
over I hear people talk about the size of their organisations. All
I hear is the cost of their payroll. Is this just a man thing? Are
we really comparing size still as adults? Get over it. In business
size doesn't matter.
One of the most progressive entrepreneurs I know, Emma Jones of
Nation who advocates for home-based businesses, makes the point
that many modern start-ups intentionally work with contractors
rather than taking on the cost of a full-time employee. They are
more resilient businesses. They are more flexible businesses. They
employ less people. Their success is inversely proportional to the
number of people they have employed. And they offer the collateral
benefit to society of supporting other small businesses.
But I digress. Let's return to the blowhard who caused me to
reflect on the initial question: what do people have against
lifestyle businesses? A lifestyle business is simply one where the
owner seeks to make the business successful not only in terms of
profitability but also in terms of its ability to make his or her
life more successful. It is this intentional inclusion of other
measures of success that also define a social enterprise. It is
exactly this awareness of the impact on the environment that
defines the green enterprise.
In short it is the insight that there are other stakeholders in
a business that makes a business ethical at all. So where in hell
does my un-named blowhard get off dissing lifestyle businesses?
I believe that people should build businesses around their
passions and around their lives. I believe that some businesses
deserve to grow to fully express themselves or contribute to
society. But other businesses should remain small and focussed. And
who is he to tell anyone what they aspire to or to grade the result
on such a myopically narrow measure. Personally, I run a lifestyle
business and he can f**k off.