Before I dive into what you must understand to be a successful lifestyle entrepreneur, let’s review what a lifestyle entrepreneur is exactly.
Most definitions indicate that a lifestyle entrepreneur is someone who builds a business – usually through passive income – to facilitate a lifestyle of freedom.
In simpler terms, lifestyle entrepreneurs prioritize their ideal lifestyle first, profits second.
Benny the Irish Polyglot, a language-learning expert who runs the blog fluentin3months.com, is a great example of a lifestyle entrepreneur.
He makes a full-time income by blogging, writing books, and teaching English overseas so he can do what he loves: travel the world and learn new languages.
If you’re an aspiring lifestyle entrepreneur, you probably aren’t interested in running a publicly traded company.
You also probably won’t have investors.
And you probably won’t be able to afford running your business at a loss.
In fact, you’re likely just looking for a low-cost way to make some money that provides for your family and allows you to escape the corporate lifestyle.
At least, that’s what I’m after.
But if you want to be a lifestyle entrepreneur, there’s one thing you must understand in order to be successful: Revenue Generation.
Adding Value to the Top Line
Revenue generation might seem straightforward, but it’s not for most employees.
Because most employees don’t generate revenue.
An office worker might increase the bottom line by reducing costs (like a COO making business processes more efficient), or they might simply provide a valuable service like accounting, but most don’t directly generate revenue.
This doesn’t mean that non-revenue-generating employees are worthless.
On the contrary, many companies require both types of employees to survive.
But to be a lifestyle entrepreneur, YOU are the one who must generate the revenue, because your business can’t survive without cash in-flow.
The difference between a “wantrepreneur” and an entrepreneur is that the entrepreneur understands this concept and focuses his efforts on generating revenue, while the wantrepreneur never makes a sale.
Again, while this might seem stupid straight-forward, it’s actually not.
For a long time I was a wantrepreneur who didn’t understand revenue generation.
I thought I could just magically become a lifestyle entrepreneur without a concrete plan to make cash.
It’s tempting to believe this is possible when there are examples of people who seem to have stumbled upon success.
Examples include Michelle Schroeder, who started her blog Making Sense of Cents as a hobby and has rocketed to financial success, and Tim Ferriss, whose supplement business generated reliable cash flow within weeks of launch.
But the reality is that accidental success is unlikely for most of us.
That’s why Larry Kim, SEO expert and founder of WordStream, lists one of his favorite start-up memes as the one below:
What Society Values: How Non-Revenue-Generating Employees Receive More Respect
A paradox I often encounter is that many seem to have more respect for non-revenue generating positions.
I think this is because society tends to equate intelligence with earning power even though the highly intelligent don’t always add top line value (revenue).
For instance, many seem to think all software engineers are smart and that therefore, they must make the big bucks.
And of course, any given software engineer could very well be smart and well-paid.
But not all software engineers generate revenue and as such, not all software engineers make as much as revenue-generating employees or entrepreneurs with much less impressive-sounding titles.
Now consider the car salesman stereotype.
Isn’t there generally a negative connotation surrounding car salesmen?
Yet because they directly generate revenue, there’s usually no cap on how much they could make.
In fact, some car salesmen make more than software engineers.
So while society seems to value intelligence as the path to financial success, remember it’s not necessarily the smartest people that make the most money.
How do you make the most money?
Psychologist Angela Duckworth has spent decades studying successful people and has discovered that the greatest predictors of success are passion and perseverance, not IQ.
This is great news for those of us who aren’t geniuses (myself included of course) and great news because pursuing your passion can actually be the best path to monetary success!
Many people feel like they can either do what they love or make money, not both.
Kevin Kelly, the founder of Wired Magazine, dismantles this idea in his classic essay “1000 True Fans,” where he discusses how anyone can leverage the internet to make a living if he can find 1,000 “true fans” who will pay $100 a year for his work.
The scalability of the web makes 1,000 true fans a feasible goal.
Leveraging Passion and Perseverance to Generate Revenue
Why are passion and perseverance so critical for success?
Because they are what enable you to push past failure.
Any aspiring entrepreneur should expect to fail at some point in their ventures.
I have certainly experienced my fair share of of failures, big and small.
But I keep pursuing lifestyle entrepreneurship because it’s my passion!
If it weren’t, I would have given up on my ventures a long time ago.
But as one of my favorite investors and entrepreneurs Peter Thiel says, “failure is overrated.”
So instead of learning most business lessons the hard way by failing on your own, read this blog so I can show you how to avoid my mistakes and imitate my successes!
Here’s a list of best-practices I wish I had known when I began my entrepreneurial endeavors:
- Build an audience first. Don’t even think about selling anything until you have built an audience to sell to.
- Avoid investing any money in your business before building an audience. (Bonus points if you don’t spend any money until you’re making money)
- Once you have an audience, sell someone else’s product before selling your own (think affiliate products). This allows you to test how well your audience converts without investing time or money into creating your own product.
- If you’re selling a product online, price it low enough that people don’t hesitate to buy and high enough that you don’t need to sell an absurd number of units to succeed.
- An example of a product priced too high for lifestyle entrepreneurship is a car (cars are expensive so no one buys them online until they have test-driven, kicked the tires, etc.)
- An example of a product priced too low to make a material amount of money is a .99 cent Kindle e-book (you only keep $0.33 per sale). You’d have to sell 120,000 units to make $40,000 a year pre-tax.
Are there wildly successful entrepreneurs who have broken some or all of the above rules?
But following the rules above will put the odds of internet lifestyle business success in your favor.
Conclusion: Becoming a Lifestyle Entrepreneur
If you understand what it takes to be a lifestyle entrepreneur, congratulations!
You’re much further along than me at the start of my entrepreneurial career.
What do you do next?
I recommend you start a WordPress blog with Bluehost web hosting* and begin building your audience today!