If you want to be able to take time off in your business – in your day, in your week, or in the form of proper vacation during the year – then fundamentally, you need to make sure that the business itself, the business model, the mechanics, the financials, work to make that possible. Because otherwise, you’ll always have that stress and pressure, you’re going to have to hustle away, you’ll be constantly stressing about bringing in the next client, and that’s not going to allow you to take time off – at least not to enjoy it! If you are incredibly successful with your business, but it’s built on hustle, it’s built on working full time all the time, again, it’s going to be really hard to say goodbye to that money and to take a step back and have proper time off. So you need to be setting up your business model from the start, to work for your financial goals, yes, but also your lifestyle goals.
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Passive income business models
Transcript:
Hello there. I hope you’re inspired by last week’s episode on taking time off. And you now have your full year marked out in terms of all the lovely holidays, and family time, and adventures and things you’re going to be doing. If not, take a break right now and go back and listen to that one, because I think that’s so important and really fundamental to what it is we want out of our business. Because yes, I’m all for designing your business according to Ikigai. So that lovely Japanese concept of work that you’re passionate about, that uses your skills, that makes a big impact in the world and that you can make money from however amazing your work is, however passionate you are about it, however big that impact is that you’re making, I still believe, and I’ll say it again, it’s so incredibly important for you, for the business, for your clients, for your family, for the whole world, to take time off, to look after yourself, to enjoy yourself, to be inspired and to live a more diverse life than just sitting at home, working on your business.
So this week I do want to wrap things up in terms of work-life integration, before we move on to a slightly different topic. In terms of how you can really set up your business and your business model, to be able to take that time off. Now, we talked last week about setting boundaries and in fact the last couple of weeks, planning, scheduling, planning ahead, setting expectations with clients, and all those things are really important. So again, do go back and listen to that.
But of course, fundamentally, we need to make sure that the business itself, the business model, the mechanics, the financials, work, in order to be able to take that time off. Because otherwise, we’ll always have that stress and pressure, because we have to hustle away, and again, that’s another episode to listen to, why working harder isn’t necessarily the right thing or in fact, we shouldn’t be working harder, so that’s really important.
If you’re constantly stressing about bringing the next client and so on, that’s not going to like to take time off obviously. If you are incredibly successful with your business, but it’s built on hustle, it’s built on working full time all the time, again, it’s going to be really hard to say goodbye to that money and to take a step back. So, really setting up your business model from the start, to work for your financial goals, yes, but also your way of life goals. If that makes sense.
So number one, of course, and I won’t stay here for too long, but I do want to mention of course, that you need to define success.
So what do you want your business and life to look like? Assuming everything works out exactly as you plan, what’s the vision? What are you looking to achieve with the business? Are you looking to, and I’m drawing things out of thin air, live by the sea, writing books, earning some passive income, while you go with your partner paddleboarding the river and cycling the world, or just lying in your hammock, if that’s what you prefer.
And are you hoping to build a big team where you’re really just managing that team? And you’re focusing on people management as really the CEO, the boss, while they’re all delivering the work. Maybe you have a team of associates or people who are going to be coaches under you. I’ve seen coaches do that. For example, they train up coaches who then deliver the work, and they can take a step back. Or do you love your work and do you want to continue being the key person who delivers the work? But perhaps you want people to take some of the other burden off you. So of course, accounting and admin, but also maybe I’d love to have a videographer, marketing team who, I can just show up, speak, and then they package that up and create beautiful content, podcast, episodes, audiograms, videos, pictures, and all these things, right?
So what kind of business are you looking for? Say financials, of course. Are you looking just for a lifestyle business, in the sense that it gives you enough to live your life and it works around your priorities or you’re really looking to have huge financial success and go big. Are you looking for an investor, maybe? Are you really looking to sell your business in the future? Do you just, and I keep saying just, but every goal is valid. Are you looking to develop a boutique kind of business or agency rather than a massive corporation?
I think a lot of us, and certainly those of you listening to me, are rather looking for the lifestyle business. A smaller boutique kind of service, not looking to scale into a massive corporation at least. But it’s really important that you’re clear on this and make sure that from the start, you’re laying foundations and you’re really planning for the long run.
Planning to build your brand in the long term, that’s always important. Planning to move in the direction of where you want to go, so you don’t end up going off-piste and creating something that, yes is successful, but doesn’t bring you what you want. So first define and design success.
Now, second is the crux of the matter, which is choosing the right business model.
And I had an episode on business models a couple of months ago, so do check that out. But in a nutshell, it’s really just a plan for how you run your business. In fact, if you Google the definition, it’s the plan for the successful operation of your business or something like that. So basically, how are you going to achieve your definition of success? That’s my definition. So that will involve who are your clients or customers? What products and services are you going to offer? How will you make money? How will you market your business? How are you going to sell your products and services? What investments do you need to make? What team or support do you need?
And these different pieces all need to build on each other in order to ultimately deliver your version of success. And again, that includes financial targets, but it also includes the logistics of when and where you will work and any other aspects that are important to you. So of course, this is not something you can create in a few minutes of brainstorming. So make sure you dedicate proper time to look at this. How you’re going to create multiple income streams? How you can best leverage your time? How are you going to set the right pricing and so on, in order for your business to deliver on its promise.
If this is something you haven’t done or you’d really like support with, as ever you can get in touch. If you book a call at onestepoutside.com/free consultation, then we can have a chat about where you are in the business, and how we can really make sure that you’re creating, building, involving and growing the business to deliver on your beautiful definition of success that you have.
So, just a few examples. So one of the first things that I like to start with is your clients. So, who are your clients going to be? And something, it might seem obvious, but you want to identify individuals or companies who are going to understand and support I guess, your approach potentially. Let’s say, you’re planning it around a young family or travel taking three months off a year. I keep saying the three months off, maybe it’s longer. Hopefully, you are already wanting to anyway, work with clients who share your values. Who are a bit more forward thinking. Who are in [inaudible 00:06:54] inspired, by the way you run your business, rather than the dusty old traditional corporations, that might be shocked and appalled, if they hear that you take that much time off or that you’re prioritising your children, either the office work and so on, right?
The ones who expect you to be in the office, Monday to Friday, in the client’s location, I’m at their beck and call and so on. I would argue that we don’t want to be working with those people and companies anyway, but in the context of being able to really navigate this time off and your maybe slightly unconventional at the moment, way of running your business, I would recommend that you find clients again, who share those values, who you can chat to about your amazing trips and things and they’ll be inspired. Maybe some cool young startups or individuals who share your values. In my case, I work with people who are trying to do the same things as I have done, and I’m trying to do. So people who want to manage their business around a young family or travel or whatever else in their world, right? Adventures and all sorts of things.
And so, they really respect then, if I am able to take time off to be with my daughter or my partner or to travel, then they go, “Hey, that’s exactly what I want to do. So let me, or rather, can you help me set up my business to work that way too?” So you want to have that kind of synergy. People who share your values and support your goals, rather than someone who you’re going to have to constantly have that battle with. Their schedule, their expectations, their values just don’t fit at all. So you need them to be flexible to your schedule, again, supportive of your desire to work from home, to work flexibly and willing to respect your boundaries when it comes to when and how you’ll support them.
Now, you’re going to deliver an incredible result for them, so you still need to do a good job. They need to respect and believe that, but you do that on your own terms. So it could be clients who don’t need that face to face support, they enjoy working online. They’re happy for you to work remotely, whatever that looks like. So that’s an example in terms of your clients.
Now, another core element is in terms of your products and services. So you really need to look at how you’re going to deliver them.
Perhaps virtually rather than in person. Also leveraging your time effectively, so that you’re really maximising the value you’re getting out of the time you’re putting in. So, a group programme, for example, in the case of a coach, is an opportunity to work with five, 10, 20, whatever clients and deliver them incredible value still. They get the one to one support, but they also get the group dynamic, which is actually an added benefit. And you’re putting in, let’s say an hour a week for that call or an hour a month, or every fortnight or whatever, and you’ve created, in my case, a comprehensive membership site, where they have all sorts of content they can work on in between sessions, rather than, just doing one hour with one client. So then if you want to have, let’s say 100 clients, you suddenly need 100 hours and that becomes quite a burden.
So as much as I love working individually with people, I also see great value for me and for the clients,, in having that group format. And in fact, my business incubator is a combination of the one-to-one and the group element. The business accelerator, which is the next level is focused only as it were on the group element. And again, I do one-to-one as well, but this is something you need to be considering, in terms of making sure that you’re able to have the impact you want.
Now, some people choose, coaches, some people say, hey, I just want to work with five people. Can charge each one, 100,000. Work with them at a very high, intense level, and that’s one way to do it. And others are more hands-off. Maybe you want to be a bit more passive, so you’re going to work with many more people, but in a smaller, more light touch way, I suppose.
Now, I mentioned the word passive there I think, and this idea, this Holy Grail of passive income of course is very appealing. I’m sure you will have heard of it, but the idea that you can just sit there, lie there in the hammock, by the sea, look out at the ocean and be earning money. Now, it’s a mixed one really, because it is definitely possible. It’s more possible than working in the office or having to actually be there, sitting there in a live call, in an office.
However, most things are not 100% passive.
So a couple of examples. A book requires you to write a book, to plan it, to write, to edit, get a cover design, get it published, and not to mention to market it. Now, however, once you’ve done that, that book exists. So the first book I wrote with a colleague many years ago now, I guess, around How to Succeed in Your First Job, we no longer have that business approach that we had when we had intended to launch that initially, but the book still brings in a little bit of money every month. We don’t do anything to promote it. It’s a little bit of cash. If we had done 10 books, we would have had a little bit of more cash every month.
I don’t do a massive amount of marketing, but it’s there. I always point new clients and certainly prospects to it. I give it out as a prize when I do my workshops and things. And that’s something that, yes, it took a lot of effort to create, but it’s now there. It’s a low entry point into the brand, and into the business and it’s a great resource. I hope you agree to inspire you to give you practical tips. So it could be a step into working with me in a more intensive way, or it could be enough. That’s all you need. You read the book and then yep. I’ve got what I needed and you move on.
So, book is a great example. And again, if I write three books, five books, 10 books, that’s going to be even better of course, because they then build, they synergize with each other, and I build more of an audience around that and I’ll have more targets as well.
Another so-called passive format is a DIY, self-directed course. And this is, in the theory again, completely hands off once you’ve created it. However, you probably still need to update it from time to time. There’ll need to be customer support where people have some technical issue or they do have questions. You certainly have to set clear expectations that, “Hey, you’re just downloading these PDFs and audios, and literally I’m not available.” Now, it’s an appealing model. However, both with the book and the course. Generally, those are lower ticket items in the sense that you’re not going to be able to charge a huge amount, for something that is a small book. Some people charge 20 pounds or something for a big manual, but that’s really the upper limit. Mine’s much lower, eight pounds or less.
The course as well. It might very well provide incredible value, but generally, if you don’t have a live element, if you don’t have any active support, Q and A, that kind of thing. It’s not going to be something that you can charge a lot of money for. So, you either need a lot of those products. So again, 10 books, 20 different courses, let’s say, or you need a lot of customers for them to make a lower price point financially viable for you.
Now, the next level of not passive, but at least leveraged income, comes from as I said, group programmes, masterminds.
This provides a much higher level of support, but also then comes at a higher price. So for me, I know that leaving the 9 to 5 and really working out what it is you want to do, getting that business up and running and actually making it, replace a full time income, those are things that take a lot of time and work and say for me, my business incubator, the One Step Outside the 9 to 5 Business Incubator, is a 12-month comprehensive programme. It’s a rich, heavy, I guess, membership site. A lot of content, audio, video PDFs, that I’ve developed over the years. And of course I keep up to date.
So it’s not passive in that sense for me, but certainly, thanks to having created those things, now I have all that material that is hugely valuable for people and I don’t have to keep telling people, “Hey, this is what a business plan looks like.” I just give them a video they can watch that, and then we can focus on really tailoring that to their situation and being really specific and much more productive and effective.
So there’s the membership site. You can have a group forum, a Facebook group I have for the incubator. I have a LinkedIn group for the accelerator, and I also provide WhatsApp support, for example, so that’s an interesting way of giving one to one support, without me having to be there at a specific time. So all these things are more leveraged time, working with 10 people in the programme instead of just one-to-one, but still obviously giving them incredible value and support, so they feel like they’re getting more and I can also charge more accordingly.
And speaking of pricing, of course, you need to look then at your overall income goals, and how many clients you can take on in the time you have available.
Whether you’re having young children and taking lots of holidays or taking three months or six months off in a year, you just want to work a three-day week, same thing, right?
So the usual number given for a typical 40-hour work week, I think is 2080 hours in a year. But none of us want to work 40 hours a week, 52 weeks a year. And it’s also not feasible by the way, as a business owner. Because we don’t just have our billable hours, we also have business development, marketing, accounting, admin, and so on.
And again, whether we’re a parent with a young or old family or we want to travel, or we want to just enjoy our lives, the whole point is that we’re trying to create that freedom of flexibility in our schedule. So we have to work out the pricing, so that it works for income goals and what we want our schedule to look like. So you can’t work out pricing based on working 2000 plus hours in a year, if you actually only want to work a thousand hours in a year, suddenly you have to double your pricing to make that work.
And that comes full circle back to your business model. In the sense of which clients are able and willing to pay that amount, what type of products and services you can deliver that will justify, that will provide adequate or not adequate, but incredible value, that’s going to justify that price and so on. And so that’s the business model.
And then finally just setting up to work, right? So you need to think about the tools you need to invest in. My membership sites, I have a long list of all the tools I have actually on the membership site, but in terms of what I’ve built it on, it’s on WordPress. I use WeCommerce memberships and subscriptions to manage the payment, to make certain pages private, to be able to also drip feed as it’s called content. So in theory, I could do a course where you get month one, month two, or week one, week two, and so on.
And of course there’s email marketing, there’s social media scheduling. All these things. But you need to look at the tools, the software, the systems that you need to make this more passive, more leveraged approach work. And of course, as ever, a team potentially, if it’s a freelancer to support you out, a VA or whatever that looks like.
So, I appreciate it’s a big topic and I want to draw the episode to a close. However, when it comes to choosing the right business model, obviously it’s so incredibly critical, and I’d love to support you in doing that. And so, there are more episodes I can point you to, but the best thing as ever is to get on a call, to talk through how I can really help you set up your business, whether you’re just starting out and you’re really wanting to get it right from the beginning, or you’re further along. You’re seeing lots of success but you’re not quite able to live the life you want. You can’t take those three months or six months or two days a week or whatever it is off. So do get in touch, in again, onestepoutside.com/free consultation.
So thanks so much for listening and I’ll see you back in next week. Bye for now.
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