Lifestyle companies are, as partially defined by Wikipedia, businesses that are established and run by their founders with the primary aim of sustaining the founder and, secondarily, those who work for the founder. Wikipedia says that the lifestyle owner wants to sustain a specific level of income that will give the owner a basis on which to live a particular lifestyle. I think the definition is broader than that though. A New York Times article offers other definitions: http://boss.blogs.nytimes.com/2011/01/24/is-the-term-lifestyle-business-an-insult/?_php=true&_type=blogs&_r=0. And here’s another question: at what point is a lifestyle company called a privately held company (one that does not have shareholders, or does an IPO)? Mary Sullivan, a blogger, offers still another point of view on the subject: http://www.allbusiness.com/business-planning-structures/starting-a-business/3878259-1.html
I also believe that lifestyle companies make up a large percentage of the tax base…after all, lifestyle companies don’t have lobbyists or have the kind of money it takes to wield enough power to get tax breaks for themselves.
As I’ve written about Natori, lifestyle, or privately held, companies have the advantage of being able to dictate exactly what the owners want to do with it. This includes sustaining a high level of quality, ethics, etc. For fashion designers and others, this is important – it’s directly related to the owner’s vision. I’ve seen lifestyle owners customize their products for clients – still another advantage. Lifestyle companies also offer the owner the potential for a lot of individual freedom and flexibility in their lives. Most companies who I come in contact with at the entrepreneur and other courses I’m involved with (Fast Trac at Levin Institute, Licensing and Design Entrepreneurs NYC Mini-MBA program at FIT) and mentoring (Lang School of Entrepreneurship at Columbia University and Philadelphia Fashion Incubator), are lifestyle companies.
So while lifestyle companies are portrayed as “unglamourous” in the press and in certain communities, like Silicon Valley, Silicon Alley and the Route 128 corridor, they can often be a wise business decision and a road to success for the entrepreneur. Here are some other opinions along the same lines.
What’s your opinion?
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