A little note to kick off this post: I first posted on this subject nearly six years ago, yet it’s one that always seems to be on my mind.
I was especially reminded of this discussion a few weeks ago, during a visit to Detroit, MI hosted by the Ralph C. Wilson, Jr. Foundation and the The John R. Oishei Foundation where I had the chance to tour some newly forming “Main St.” businesses in areas that had been previously forgotten.
Small business owners were driving a stake in the ground, renovating buildings, opening small businesses and meeting the needs of their community. It was inspiring and reminded me of just how crucial our small business community is to our local economy.
I went ahead and updated that original post below, sharing new numbers and some fresh thoughts, so I hope you enjoy!
Lifestyle Business vs. Innovation Driven Growth Business:
There is no right or wrong, the choice is yours.
I remember a conversation that I had 20 years ago with a local entrepreneur that was attempting a tech startup. In the course of the conversation, it became clear to me that he had little respect for the lifestyle entrepreneur.
In his mind, if you weren’t building a rapidly scaling innovation driven enterprise, you were insignificant.
Honestly, I found his attitude off-putting for many reasons, which we’ll get to in a minute.
Let me start by saying that I fully support investment in the innovation-driven economy.
I’ll be the first person to say yes to government agencies and venture funding “priming the pump” in communities like Buffalo, NY to get the high-tech flywheel spinning. It’s critically important to commercialize innovative ideas and new technologies.
Successful technology-driven companies have the potential to scale quickly and create jobs at a faster pace than lifestyle businesses. However, they also have their own challenges, which we so often ignore like high failure rates, large capital investment and tradable jobs that can easily be moved around the globe.
That’s where the small business community comes into play.
There is another huge sector of our economy that is driven by small “main street” businesses and solopreneurs that don’t get the credit they deserve. We need to acknowledge and support the importance of the small business community, and the positive impact it has on both our economy AND community.
Consider some of the data that supports the importance of our small businesses:
- There are over 33M Small Businesses in the U.S. and they employ over 61M people
- U.S. small businesses employed 61.6M people or 46% of the workforce
- Women own 43% of these small businesses
- Racial minorities own 20% of these small businesses
- 96% of all U.S. businesses gross less than $1M annually
- Most small business start their businesses on their own backs, 77% rely on personal savings for their initial funds.
Here’s the most interesting part: many of the businesses mentioned above are lifestyle businesses.
These are local businesses that we all rely on as part of our daily lives. They include everything from your corner gas station to the pediatrician that cares for your children to the local butcher, retail store, insurance agent and small community bank.
These business owners are your neighbors, friends, and community leaders. They are individuals that are tightly woven into the fabric of our communities and they create jobs and provide significant economic impact.
Without them, our local economies would quickly collapse and the concept of community would likely be lost.
So, while innovation-driven entrepreneurship is an important piece of our economy, please don’t discount the critically important role that lifestyle (Main Street) entrepreneurs play in the fabric of our society.
These lifestyle entrepreneurs deserve much more credit than most take the time to give them, and it infuriates me when some choose to dismiss their positive economic impact on our society.
Innovation driven business vs. Lifestyle business: there isn’t a right or wrong; both have their advantages and disadvantages.
If you are starting a business, it is simply a choice you make. If you want to run a business that leaves you in control of your own destiny and allows you to create the hours and income that is right for you, then a lifestyle business is a great choice.
On the other hand, if you want to swing for the fences, scale quickly, and don’t mind giving up control to investors, then an innovation-driven enterprise may be the perfect choice.
In the end, the choice is that of the individual entrepreneur.
Whatever their choice, let’s be certain to acknowledge that neither is more important than the other, and both have the potential to create jobs, inspire wealth and invigorate our communities through entrepreneurial development.
If you want to explore for yourself just how important small business is to the U.S. economy, download the latest issue of Small Business Administration’s 2023 Small Business Profile from the U.S. SBA Office of Advocacy. It is packed full of information about small business and its importance to our economy.
If there’s one thing this blog should inspire you to do — it’s to soar, not settle. Starting a business is a bold choice that can not only change your life, but make a lasting impact in your local and statewide economy.
So, what lifestyle OR innovative entrepreneurs do you look up to and why? I would love to hear from you in the comments!