Broadly speaking, there are two kinds of businesses – lifestyle and scalable. A lifestyle business is meant to help the founder live a certain kind of life. These businesses won’t become big, and usually revolve around a passion or hobby of the founder. Scalable businesses, on the other hand, are created with the intention of becoming as big as possible – often $100 million in sales or greater. These are usually the high-flying tech companies that you read about in the paper.
Neither kind of business is inherently superior – entrepreneurs with small lifestyle businesses can be just as happy (if not happier) than large, scalable businesses. To know which is right for you, you have to know what you want out of life. What will be most fulfilling for you? Do you want the recognition, stress, and long work hours that go along with building a big business? Or would you rather spend your hours turning your hobby into your profession, making decent money along the way?
Then make sure that your business aligns with your desired outcomes. If you want to build a scalable business, don’t start a company with lifestyle potential, and vice versa.
