A lifestyle business is normally set by the founder to support a preferred lifestyle. In the past, life style business owners were seen as people who were not capable of making any type of serious income. However, this impression is changing as serious players like Pat Flynn and John Lee Dumas who net over $50,000 per month.Take a look at these sites that sold for over $10millions
- Ugo.com – $100 million
- Consumersearch – $33 million
- TechCrunch – $30 million
- Weblogs.com – $25million
- Bankaholic.com – $15 million
How does one become truly financially independent with their lifestyle business?
A person becomes independent in their lifestyle business by building assets.
Your main goal as a business is to build assets and then revenue from the assets (rather than building revenue directly). If you have just a product or service you will eventually hit the maturity and decline phase. However, when a business builds assets and then creates system around the asset to generate revenue, the business is sure to become a source of FINANCIAL FREEDOM. If you want to build a lifestyle business that endures, you need to understand systems and how to make the numbers work in your favor.
Consulting/ Freelancing
In the freelancing model, the business owner derives revenue directly from the customer as shown in the diagram below:
The problem with this model is revenue are not preserved in assets.
Business Assets in the Lifestyle Business:
Assets could be tangible or intangible. The biggest assets for the lifestyle entrepreneur is an intangible asset called the customer list.
Churning Assets into Revenue
You need 3 systems in place to “successfully” turn your asset into revenue (monetize your asset):
- Operations: this system lays the groundwork needed to monetize the traffic. The preferred systems for online businesses are automated
- Marketing: A system of communicating how you meet your customers’ needs
- Finance: A system of collecting and accounting for money collected from your customer.
This article is part 1 in the building financial freedom from your lifestyle business series