Have you heard the term “lifestyle business?” It describes a company that produces something people want to buy, and provides a comfortable lifestyle for the founder, the employees, and their families. But for Wall Street and investment bankers, it’s a patronizing term, and it virtually guarantees you won’t get any money from them. Why?
The usual reason given — there’s no “exit strategy” for investors. In other words, people building a “lifestyle business” aren’t interested in the popular twin 21st century pipe dreams of “going public” or “getting bought out by Google.”
Of course, by this definition, most of the small businesses that created the American economy are “lifestyle businesses.” People who built small factories to make duct tape and screws, or warehouses to process potatoes. Home entertainment retailers, furniture stores and landscape architects. Businesses that at some point decided they were unwilling to pursue growth at the expense of the quality of their products, the quality of their lives, the well-being of their employees, and the health of the planet. As Edward Abbey memorably wrote, “Growth for the sake of growth is the ideology of the cancer cell.”
Such small businesses are being squeezed from all sides now. They’re starved for credit, because banks, the traditional lenders, blew all their money on speculative derivative investments. They face competition from online retailers who pay no sales tax and have no loyalty to local communities, school districts or economies. In California, post Proposition 13, those local entities are entirely dependent on sales tax revenue, which has fallen off a cliff, and so they look to local businesses for more revenue. Which they really don’t have.
What can we do? Think about where you spend your money – and spend it locally. Do companies like eBay, WalMart and Amazon REALLY create jobs? Well, perhaps in warehouses and data centers. While real live small businesses, like the ones your neighbors own, are going under. I’d argue there’s a net loss there – both in numbers and quality of life. Potholes don’t get fixed, teachers get laid off.
Oh, and pay sales tax on your online purchases. It’s not just a good idea – it’s the law.
Ted Bellamy is the nom-de-plume of Scott Wyant, who’s lived in Culver City for more than 20 years, and was actually awake a good part of that time. He’s interested in the human side of technology, and can be reached at [email protected]