Startup or Lifestyle Business? How to Know the Difference

Are you building a startup or lifestyle business? There’s no right or wrong path here. Before you embark on a new venture, it helps to know which kind of business you’re building and what that means for your growth, funding, and operations.

What’s the Difference?

A startup (also known as a high-growth company) is designed to scale quickly. These companies often have technology or systems that allow them to serve large numbers of customers without a proportional increase in cost.

A lifestyle business, often grouped under small business, isn’t necessarily built for rapid scale. Instead, it’s built to support the founder’s lifestyle, whether that’s financial stability, creative freedom, community impact, or all of the above.

Understanding Scalability: How Will Your Business Grow?

At its core, scalability is about how well a business can grow revenue without a matching increase in costs. It's one of the biggest differences between startups and lifestyle businesses. Knowing how your model scales (or doesn’t) will shape everything from pricing to hiring to how you deliver your product or service.

Here’s how it plays out:

• Startups are built to scale fast. The goal is often to build once, sell many. For example, a SaaS company or app can serve thousands of users with little incremental cost, thanks to automation, tech, or licensing.

  
  

• Lifestyle businesses can grow too, but that growth usually requires additional resources. A design studio, bakery, or personal training business grows by hiring more people, taking on more clients, or opening more locations.

Scalability doesn’t define your ambition, it defines your business model. Choose the one that aligns with the kind of impact (and life) you want to build.

Exploring Your Funding Path: What Will Fuel Your Growth?

How you fund your business depends on what you're building, and what kind of control, speed, and outcomes you’re aiming for.

• Startups often require outside capital to build fast and take market share. This might include grants, angel investment or venture capital. These options usually come with expectations for rapid growth and a future exit (like an acquisition or IPO).

  
  

• Lifestyle and small businesses tend to lean on non-dilutive sources of capital. Think personal savings, bank loans, and grants. These paths allow founders to maintain full ownership and focus on sustainability over speed.

That said, there’s no one-size-fits-all. Some high-growth businesses grow big without raising venture capital. And some small businesses benefit from strategic investment without aiming to exit.

Decision Time: What Do You Actually Want to Build?

Whether you want to grow slow and steady or build the next billion-dollar brand, it starts with clarity. Ask yourself:

• What kind of life do I want to build around this business?

• Do I want to raise outside capital or keep full ownership?

• Would I rather exit the business or run it for decades?

• How much risk (and stress) am I comfortable with?

• What does success look like to me: wealth, flexibility, impact, legacy?

  
  

There’s no wrong answer. But your path will be a lot smoother if you choose it with intention.