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Doug Richard: Why do people hate lifestyle businesses?

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Re: Doug Richard: Why do people hate lifestyle businesses?

#41

Post by stevenwei »

pxlpshr wrote: post #8

It's not that people hate lifestyle businesses, it's that a lot of people inappropriately label their lifestyle businesses as "startups". For the people that have worked 70+ hours a week, took no salary, and have lived through the pain, blood, tears, sweat in an attempt to build a sustainable business -- it's kind of a slap in the face. I used to run a lifestyle business (ad agency), worked 40 hours a month and nette…

Aren't you conflating lifestyle businesses with service based businesses? Not every lifestyle business is necessarily a service based business.

In a service based business like ad agencies, web design agencies, you don't get paid unless you're continuing to do the work. I wouldn't really consider them lifestyle businesses either.

But if you're selling a product or software-as-a-service that can scale beyond how much time you are putting into it (e.g. a traditional startup), then you could certainly build that into a lifestyle business by avoiding taking external funding and growing it to profitability.

Re: Doug Richard: Why do people hate lifestyle businesses?

#42

Post by pxlpshr »

theBobMcCormick wrote: post #35
pxlpshr wrote: post #8

It's not that people hate lifestyle businesses, it's that a lot of people inappropriately label their lifestyle businesses as "startups". For the people that have worked 70+ hours a week, took no salary, and have lived through the pain, blood, tears, sweat in an attempt to build a sustainable business -- it's kind of a slap in the face. I used to run a lifestyle business (ad agency), worked 40 hours a month and nette…

I don't understand the fascination people have with comparing how many hours a week they work. Like someone is going to applaud you for working 70+ hours a week? I really don't see how that should be important to anyone but you. IMHO, the proper definition of a startup should be a business that's starting up . It's fucking ludicrous to decide that there is only one kind of way to start a business that qualifies it as…

So you're suggesting that semantic meaning is not important? :)

Most incubators explicitly state "no lifestyle businesses." I don't think it's that ludicrous since the term startup is often misunderstood, much like the concept of lean.

I agree that working a lot isn't necessarily working smarter, that was not the point.

Re: Doug Richard: Why do people hate lifestyle businesses?

#43

Post by jaxn »

tocomment wrote: post #25
jaxn wrote: post #10

Earlier quoted context omitted.

Thanks for the pointer to bizbuysell.com! I am going to have hours of fun perusing that one. Edit: ooooh! Email alerts matching my criteria!

Are you going to buy a business? I've been considering this route as I'd love to aqquire a passive income stream but can't seem to gain any traction on my own projects.

It is something I am considering as well. I am a partner in an LLC that owns a couple of retail stores and am thinking that my future plans will involve buying existing businesses that I feel are under-performaning and that we have the skill set necessary to turn around.

For now I am excited about using the site to start evaluating opportunities for businesses in the areas where we are currently operating, maybe figure out who they are and do some evaluation so that when I am ready to pull the trigger I have a good understanding of the market.

Re: Doug Richard: Why do people hate lifestyle businesses?

#44

Post by jaxn »

rythie wrote: post #34
theBobMcCormick wrote: post #33

Earlier quoted context omitted.

Life is never without risks. If he IPO's and takes the "money in his pocket", he could still get wiped out by a bad investment. IMHO that might even be more likely since since most entrepreneurs/small business owners already knows their current line of business quite well, knows the players, the competitive landscape, etc. At the same time, most of these same entrepreneurs/small business owners often know jack shit a…

Your assuming he would reinvest the money rather than just keep it a savings account (or several).

The point being that there is always risk, and if you currently have the end result, there isn't much reason to give that up so that you can make a bunch of money and get back to where you started.

This is somewhat related to one of the best comments in the FU money thread. If you were happy before the money you will be happy after the money. If you were miserable before the money you will likely be miserable after the money.

BTW, that IPO isn't a sure thing either. I would guess that a successful IPO is less likely than a big competitor ruining your business.

Re: Doug Richard: Why do people hate lifestyle businesses?

#45

Post by chc »

cynical wrote: post #36
detst wrote: post #32

Earlier quoted context omitted.

> almost 10 years in a small company > a lot of room for growth and profit in our niche market > being artificially limited is frustrating > when I think about starting my own business Sounds like you have the experience, know a market, want to do something bigger and have a least thought about going out on your own. So, why not? Sounds like you would be well-positioned if you wanted to. Are there needs in the market…

Why would he do that when it's so much easier to collect a paycheck and complain about how management is doing everything wrong?

Which of these is more rational:

• Spend a lot of time and mental energy trying to convince someone to let you give him more money through your efforts

• Make a reasonable effort to tell him what would be in his best interest, and if he refuses, let him be

Unless you own a lot of company stock, there's not all that much incentive to do more than "collect a paycheck and complain about how management is doing everything wrong."

Re: Doug Richard: Why do people hate lifestyle businesses?

#46

Post by tnorthcutt »

terrellm wrote: post #24
maukdaddy wrote: post #18

Earlier quoted context omitted.

I agree 100%! I'm currently in an MBA program, and the focus is always on getting external funding and growing a business for the sake of growing. You have inspired me today. I'd love to run a business like yours where I could spend more time skiing, hiking, and enjoying the outdoors rather than slaving away for some VCs to make their 500% exit. Edit: I checked out the site listed in your profile. You have done an in…

Glad to hear and feel free to contact me if you ever want to visit. As you probably know, being an entrepreneur in an MBA program can be trying as the corporate-minded students and professors look down on your "little business" while your non-MBA friends worry you will become the stereotypical MBA. Having been out several years now, I can say that it was well worth the investment.

Did you do your MBA at A&M? I probably need to contact you sometime in the (semi-) near future; my in-laws have a ranch, and are probably good candidates for your product.

Re: Doug Richard: Why do people hate lifestyle businesses?

#47

Post by tocomment »

jaxn wrote: post #43
tocomment wrote: post #25

Earlier quoted context omitted.

Are you going to buy a business? I've been considering this route as I'd love to aqquire a passive income stream but can't seem to gain any traction on my own projects.

It is something I am considering as well. I am a partner in an LLC that owns a couple of retail stores and am thinking that my future plans will involve buying existing businesses that I feel are under-performaning and that we have the skill set necessary to turn around. For now I am excited about using the site to start evaluating opportunities for businesses in the areas where we are currently operating, maybe figu…

That's interesting. How did you get involved in such an LLC.

After perusing that site, I didn't see many businesses that looked much like passive income. I guess I'll keep looking.

Re: Doug Richard: Why do people hate lifestyle businesses?

#48

Post by terrellm »

tnorthcutt wrote: post #46
terrellm wrote: post #24

Earlier quoted context omitted.

Glad to hear and feel free to contact me if you ever want to visit. As you probably know, being an entrepreneur in an MBA program can be trying as the corporate-minded students and professors look down on your "little business" while your non-MBA friends worry you will become the stereotypical MBA. Having been out several years now, I can say that it was well worth the investment.

Did you do your MBA at A&M? I probably need to contact you sometime in the (semi-) near future; my in-laws have a ranch, and are probably good candidates for your product.

Yes, I graduated in '03 from the MBA program and '99 in INFO. Drop me an email with your contact info (my email is in my profile). If you are around Aggieland, come out and visit us sometime.

Re: Doug Richard: Why do people hate lifestyle businesses?

#49

Post by soundlab »

tocomment wrote: post #47
jaxn wrote: post #43

Earlier quoted context omitted.

It is something I am considering as well. I am a partner in an LLC that owns a couple of retail stores and am thinking that my future plans will involve buying existing businesses that I feel are under-performaning and that we have the skill set necessary to turn around. For now I am excited about using the site to start evaluating opportunities for businesses in the areas where we are currently operating, maybe figu…

That's interesting. How did you get involved in such an LLC. After perusing that site, I didn't see many businesses that looked much like passive income. I guess I'll keep looking.

I recommend reading Buying a Small Business http://amzn.to/bmRz0T. It is really outdated in terms of the search methods (You can use a computer to do searches for information!) but the fundamentals about evaluating financials and understanding the relationship between buyer and seller haven't changed. One of the most intriguing aspects is for "lifestyle business" owners, your credentials and commitment to growing and protecting the seller's baby is nearly as important as your offer price. Huge caveat is that 99% of Business Brokers are complete morons and terrible to deal with, give them no insight into your liquidity, net worth, etc and stick to the type of business criteria or industry you are interested in.

Re: Doug Richard: Why do people hate lifestyle businesses?

#50

Post by tocomment »

soundlab wrote: post #49
tocomment wrote: post #47

Earlier quoted context omitted.

That's interesting. How did you get involved in such an LLC. After perusing that site, I didn't see many businesses that looked much like passive income. I guess I'll keep looking.

I recommend reading Buying a Small Business http://amzn.to/bmRz0T . It is really outdated in terms of the search methods (You can use a computer to do searches for information!) but the fundamentals about evaluating financials and understanding the relationship between buyer and seller haven't changed. One of the most intriguing aspects is for "lifestyle business" owners, your credentials and commitment to growing an…

Thanks. I wonder if I should not expect a real world small business e.g., cafe, roofing company, gift shop, to be a passive income source?

I wonder where I else I can look for passive income (Assuming I can't build something myself :-(

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