It’s time for another edition of “Letters to Steve” (LTS for short). In this regular series, I answer questions I get from your fellow readers. Today I’ll respond to another blogger about what type of business is great for lifestyle design. Here’s what he wrote:
I’m working on a post of my own, and wanted your feedback on a topic you might have covered before: What makes a great lifestyle design business? I know that success is different for everyone, and so their business might need to be too – but what are common traits in your experience?
I’m trying to answer the “how” side of this equation. I’m seeing some folks who are getting frustrated with ideas, and want some meat, so I’m going to take your answers and some others and see if I can build a good solution.
My Response to Derrick
Thanks for writing in! I have to say you ask a pretty challenging question. I’ll do my best to be as thorough as possible.
Although this might seem like a cop-out, I believe a lifestyle design business really depends on the individual person. Some people love to work. Others want a steady income that allows them to have fun and play. With that in mind, I think you can separate lifestyle design businesses into how much effort and work a person is willing to put in. You can pretty much break it down into three main categories:
#1- The Almost-Passive Income Business Model
I have yet to find a business that’s 100% passive income. To me, this concept means you do ZERO work. All businesses require effort at some point – Even if it’s a few hours a week. So (almost) passive income is for those types of people who are willing to work hard and then rely on the proceeds from this effort.
How do you create an almost-passive income business? I’d say this type of business requires you to build a solid infrastructure with the ultimate goal of automation. Here you’re not building a business focused on long-term growth. Instead you’re aiming to make some money while enjoying the rest of your life.
A great example of an almost-passive income business is an information product. This type of income requires LOTS of hard work upfront. But if you’re smart, this can become a major source of money for years to come.
Now there is a drawback to almost-passive income – It has an expiration date. All businesses require growth activities. You’re either growing or you’re dying. So if the majority of your time is spent kite surfing and traveling the world, eventually this income source will dry up and go away.
On the other hand, if you’re willing to spend more of your free time on this business then you’ll have this income for a longer period. It’s pretty much a trade-off. Either the business is practically automated or you spend more time on it and have it for a longer period of time. Get it?
#2-The Side Income Business Model
The second option comes under the mantle of “trading time for money.” Instead of building passive income, you’d focus on creating a side-business that makes you money. Confused yet? Well, let me explain how this is different from the passive income model.
The downside of many passive income sources is there’s little emphasis on building a business. Sure, you make money. But this income doesn’t focus on long-term growth. Ultimately you want to create something of value that can be sold as an asset or used as a steady source of money for years to come.
What makes a good side income business? It’s one that can be created in your spare time and then scaled once the money rolls in. A good example would be affiliate marketing. This type of business can be created with ten or more hours a week of effort. Then when you turn a profit, this money can be spent on outsourcing activities that’ll increase the long-term success of this business.
I think the side income business model is a good mix between passive income and following your passion. You get work hard and play hard. It’s the best of both worlds because you have time for other things in your life while growing something that will be a steady source of money.
#3- The Passion Business Model
Many people disregard the idea of making a career out of a passion. I know I did at one point. But that all changed once I started the Steve Scott Site. In the last few months, I’ve discovered the power of being passionate about a business. Although my ultimate goal is to turn this blog into a full-time source of income – I’ve been an unpaid writer for almost 11 months. But I’m not complaining. That’s because I honestly enjoy creating content that helps people.
Another example comes from one of my closest friends – Jay Alders. I’ve known Jay for over fifteen years and it’s been his life’s ambition to turn his love of art into a full-time income. Right now, he makes a solid income from his surf art while traveling the world and hanging out with famous musicians/athletes. I know Jay works extremely hard, but I imagine it doesn’t seem like work because he’s having fun while doing something he loves.
Many people have the wrong idea about lifestyle design. They think it’s only about traveling the world and becoming a professional slacker. I think you can work really hard and still have the time of your life. Just look at someone like Tony Robbins. He works like crazy, but has built a fun, energetic lifestyle out of doing what he loves. That sounds like the perfect life to me.
Well Derrick, I hope this is a decent answer to your question. Let me know how your blog post goes.
Final Thoughts on a Lifestyle Design Business
In all honesty, there’s a lot more that could have been covered in my response to Derrick. In fact, I plan on going into more detail about this subject in the following:
1) My forthcoming eBook that covers how to escape the rat race
2) The blog post coming out this Monday on “How to Create an Online Passive Income Stream”
Both of these resources will provide in-depth coverage about earning money as a way to afford your lifestyle. Be sure to keep an eye out for each!
Finally, I’ve really enjoyed answering questions from readers. So feel free to send anything that’s on your mind to my email address: stevescottsite[at]gmail[dot]com. Thanks!Take Action. Get Results.