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:
Steve-
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
Hey 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.
Cheers,
Steve
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.
Hi Steve,
It’s great to see another post for LTS!
I think that this is a very useful topic because many people would like to know what makes a great lifestyle design business.
After reading through your post I have come away with a better idea of the 3 business models you have spoken about. Although you have touched on the business models in passing, they serve as a good introduction and a source of ideas to build upon. I like how you have been upfront about the positive and negative points of each model, so that people who are keen on these suggestions know what to expect.
I am definitely looking forward to your ebook and your upcoming blog post on Monday! It is always good to read about how to earn money to afford your lifestyle.
Thanks for sharing another edition of LTS!
Thanks,
Glad you like it! :). I think I definitely like writing these grab bag topics. They are a lot of fun and hopefully really do provide some good information to people.
Hi Steve:
Great post I loved every word of it. Passive income, I will love to read about it as this is not so clear in my mind or rather I do not find it easy to do. The side Income business model is a great idea. The passion business model, for you it is self improvement or personal development. Right. I have a few in my mind that is backed by my professional experience.
Looking forward to your blog post Monday and eager to see your book also.
FranA
Thanks Fran, Glad you liked it.
The side business model is a great one. I would classify the stuff I am making my money on under that. SSS likely falls into #3 more than said business, though the lines blur a little.
Anyhow, thanks for your comments. I hope you have a wonderful weekend.
Nice question, and very well answered too! Steve, that was very insightful, especially your point that the almost-passive income business model has an expiration date 🙂
I firmly believe that no matter how much money would be pouring in to me from all directions, I must always keep on working. If someone is looking to build a passive income so that he can just be a couch potato, or just roam the world, I think it is misguided decision. Even roaming the world should have a higher purpose behind it… if you see what I mean.
I had never thought about it the way you have split it into nice three models, but pondering over it now, I think my income business model will be a mix of all three. Now what do you think about that?
Cheers,
Mark
Thanks Mark!
Yes, Derrick did have an excellent question. Hopefully I will keep a nice steady stream of them over time. I think I enjoy this weekly segment, but without great questions it dries up and blows away.
I hope you had at least a few in the queue when you began the series. If I know you well (to some extent), I’m pretty sure you did. Seeing the quality of the series, you’ll have a lot more questions coming up from the readers, so keep the faith! Cheers!
On the series ai am (of course) a couple into it already. (good call). A little behind on where I would like to be on eBook, but I figure on having more time once I get home. (next week!!)
Hi Steve,
I’m definitely a passion guy. Robbins is a fine example.
He “works” almost non-stop it seems, yet it’s not work to him because he loves doing it. People who live out their passions retired a long time ago 🙂
Have a great weekend!
Ryan
Damn strait. Passion is important and when you work at something you love, you never have a job, as they say. (or something like that).
Two people I love to hear speak are Robbins and Vaynerchuck. Both of whom are all about busting your ass (in very different ways). It IS an important note that when you have something you are passionate about, you stop work with a feeling of sorrow and go to sleep wanting to get back to it. That is passion. If you have that there is no question you will succeed the only question is by what degree.
Another great post! I love how you said “I think you can work really hard and still have the time of your life.” So true! In fact, I think a lot of people would feel unfulfilled if they DIDN’T work really hard at what they love doing.
A also really like what Ryan said in the above comment: “People who live out their passions retired a long time ago.” Well said!
Looking forward to Monday’s post!
A lot of people certainly do feel unfulfilled because they didn’t work hard at what they were passionate about earlier….
There are so many people out there who have full time jobs and a family to support who come home and spend their few hours free time just trying to get their passion going. I have nothing but respect for that. I bet most of them do not think of it as working an extra 3-4 hours a day (well, maybe aspects of it…there are always PARTS of jobs you love that suck) They think of it as working on their passion!
Steve an interesting question and an interesting answer. One thing I’d add is that your ideal lifestyle can change with age.
In my early twenties I worked all hours and felt unfulfilled otherwise, but when I had children I wanted to spend my time in that time and place – a low maintenance passive income would have been ideal then.
Now they are older and I have more interests, a middle course is a better fit with the way I’d like my life to be.
We all have different personalities and needs, but that’s not the only factor in determining our ideal lifestyle. Sometimes it’s useful to look at problems in 4D.
Lesley,
For sure. Lifestyle does shift and change. Buit some goals shouldn’t (though they may) a person should not have to give up all hope of personal happiness just because they have children. Of course there is an overriding duty and obligation THAT MUST come first. But hopefully there is a way to provide well for them and have personal enjoyment.
Exactly WHAT the specific enjoyments are and how you go about fitting them in should change but not the generalities of it…or something is askew.
“Lifestyle design business”?
You learn something new every day! There are actually people who go out and help others design their lifestyle?
Wow.
I definitely agree with Lesley – one’s ideal lifestyle changes all the time. Nowadays as the allpowerful mother unit, moosewrangler and extraordinaire individual, my lifestyle is ‘way more laid back than when I was foot loose and moose-free. Kid free too. Spouse-free, house-free…
I know.. it hardly seems like there should be huh..
It is more about creating actionable plans to achieve goals and desires in life. IN my case mostly with online business stuff, because I would be useless as a one armed trapeze artist with an itchy ass to a high powered executive wanting to achieve his goals.
Yah, goals will always be different and will change with age and circumstance, without a doubt.
I chose affiliate marketing because it offers many benefits. You dun need to do much work – just write content and SEO, which you can outsource later on. Creating an information product never appealed to me since you’re risking so much time upfront with the possible chance noone will buy it in the future.
I hear ya. I spent my first couple of years JUST doing AM and building up contacts. IN the long run you may want to have some thoughts about a info product. It is a really can be a money maker for the long term. and spending a lot of time in AM helps. You have contacts with all the people who you have marketed for, and know all the “players” in the niche.
ONce you have all that, it is just a bit of networking to make sure that your info product (assuming it is good) takes off.
and then of course I like to AM for myself also
“The Almost-Passive Income Business Model”, I think that this is even more then “almost” because to achieve that passive income you can’t just say: “Ok today I will start a business and have a passive income!” you first have to work hard to built the trust, customers, brand etc and after that you can have the leisure to get a passive income for some months. But my question, can this be considered passive income? I mean you worked for it, it shouldn’t count that you didn’t work all the time it’s practically the same business but you have a heavier workload for a short time.
“The Passion Business Model” I think everybody would want to follow such a business model not only because it’s entertaining and you go to your “job” happy and eager to start the day, but because you always do it better if you are passionate about it. Who wouldn’t want to have their dream jobs they always dreamed about and learned stuff just because they like, it’s like becoming a guru in something without really wanting just by loving that something.
Good luck with your eBook I hope it’s a smash hit!
An argument could be made that it isn’t passive, it is simply front loading the work. I guess it would be more passive the more steps you take to automate the process of keeping it fresh. But I see you point of view… I do think that it is a little bit of semantics though.
Certainly, if possible Passion is the business model to follow. In fact all of the good ones take a degree of passion to succeed. but with the strait passion one you may bust your ass..but the secret is that you do not even realize you are doing it, because it is simply FUN for you.