Lifestyle businesses require a great deal of thought. This is because they have to be designed to bypass many of the issues most businesses face.
The first time I started to think seriously about a lifestyle business was when I read an older book titled, “The Incredible Secret Money Machine” by Don Lancaster. I bought this book used through Amazon many years ago and have read it several times. The book outlines a lifestyle business designed to be a “secret” money machine.
From this book, I outlined how I wanted my lifestyle business to operate. Here’s what I built into my business:
1. I must have 100% control. The business shouldn’t have any partners and have a minimum of outside influences. There should be no reporting to others, no competing with others, and little time hassling others.
2. The business should have multiple income streams. The best lifestyle businesses have hundreds of smaller sources of income so that they don’t become dependent upon one or two large sources of income.
3. The business should be engineered for present and future banking. My mentor, Dan Kennedy, taught the importance of future banking and I wanted this built into my business. Present banking means you get paid now. Future banking means you get paid in the future. I wanted my business to provide income today and tomorrow. Our present effort must provide several future pay days.
4. Put nothing between me and my customers. This means no sales people and no customer service.
5. The business should not require a retail location or an office. This means no fixed overhead. No product inventory. No expensive fixtures. No copy machines. All the money typical businesses invest into these items should stay in the business’s bank account.
6. The business should have .25 employees. This employee is .25% of me. I only want to work a few hours a day at most. Most businesses require .97% of the owner. Employees are a waste of time, money and mental energy. Employees also add the hassle of paperwork, tax and other regulations.
7. The business shouldn’t require a great deal of upfront money to get started. “Money machines expand fastest and best when they bootstrap and pyramid their own output on their own terms. They key is to to keep a sense of scale and start out as simply and cheaply as possible.”
8. Cashflow is EVERYTHING. “For a viable money machine, you should accept no less than a 200-percent annual return on cashflow. For instance, in a given year, if you have a total of three thousand dollars in expenses, it should be offset by at least nine thousand dollars worth of income. This leaves you with two nickels generated for every old nickel put up. Now, a 200-percent annual return on investment seems an impossible dream to traditional financial people. But we aren’t talking about anything traditional or big business. We’re talking about your secret money machine.”
9. Use the “Black Widow Effect” to build the business. “A black widow spider usually spins a web and waits for the next meal to drop by. Now way does she go out and try to sell her next meal into coming over for canasta. The same basic idea is a good tactic for your money machine. Whenever and wherever possible, let people come to you and seek you out, rather than vice versa.”
10. Keep a low profile – “secret” money machine. In building my first two large businesses, I flew way above the radar. I turned myself into a “mini” celebrity in order to generate leads for the business. You may be reading this article because of my previous “mini” celebrity marketing. Flying above the radar opens the doors for numerous problems. These problems include people stealing your intellectual property, competitors saying nasty things about you, possible legal challenges, and more.
11. No expensive or complex marketing. Any business requiring expensive marketing isn’t the ideal lifestyle business. Complex marketing funnels require a great deal of time and money. These should be avoided completely. (Yes, I know… I spent 15 plus years creating these expensive marketing funnels. I know first hand how much time and money is required. This is why I wanted to avoid them in my ideal lifestyle business.)
How does your current business rank on these rules?
If you’re breaking any of these rules, is there a way for your to redesign your business into a lifestyle business? What can you do differently to make your life easier?
NOTE: The text in italics are direct quotes from Don Lancaster’s book.