The first company I started sells hard goods. Although hard goods
can be profitable, they aren't nearly as good as information products,
especially for the lifestyle designer. Information products are books,
CDs, membership websites, Ebooks, lectures on tape, etc. They don't come
with all the quality control, inventory, and cash flow issues that hard
goods can bring. In that way they are ideal for the lifestyle designer,
and although I don't yet own an information business, through my
experience talking with other lifestyle designers I've come to the
resounding conclusion (as does Tim Ferris in 2007's 4 Hour Work Week):
Information businesses are ideal for lifestyle designers.
With an information product, you can digitize your inventory so you can 'virtually' distribute all of your products. NO inventory, no distribution costs, no shipping costs, and completely location independent. Cash flow won't be an issue either-- all your production costs are 1 time costs (either your time or the cost of a team of freelancers to create the product.)
Although I managed to earn my freedom from hard goods, I wouldn't recommend it to anyone, even if they have a great idea. I would only suggest it if you have pre-existing relationships that you can leverage. If you are starting from scratch, it's better to execute on a mundane information business idea, then a great hard goods idea.
Information products can be launched fast (here we are going to go for 30 days) and can supply you with the cash flow and required patience to go after your hard good dreams.
This is all to say, the structure of your business is often more important than you product or the quality of your idea. There are a million ways to make a buck, you want to make sure the structure of your business doesn't cause a whole new set of problems for you once you start it. Whatever you do create will likely be in your life for a long time-- you are building an asset. Since I already have a few sources of passive income and companies that I spend my time on, I want to make sure this new venture not only supplies me with another source of passive cash flow, but serves my lifestyle directly. Here are the lifestyle criteria I created for this new business. I think this is an important and necessary step, even if it is your first business. I didn't do this for my first lifestyle business, instead I over focused on money. It has worked out, but with more difficulty than if I had focused on my lifestyle at the beginning.
Van's Lifestyle "Muse" Business Criteria
* Sell to customers I would want to hang out with.
* Help me to develop and further engage my passions for writing, travel, and technology.
* Contribute to my status as a thought leader in a niche I love.
* MUST BE FUN
* I must have something unique and interesting to offer the market.
* Must be completely digital inventory with low operating burden.
* 100% passive income after product launch.
DAY 1 - Brainstorm, Research, Business Plan
The unstable markets in the USA at the time of writing caused me to loose a key investor in a larger project I was working on. My schedule went from BOOKED SOLID to totally clear. Here's what I did:
* Put my apartment on the market - I don't want to bother with a sublease. During my 6 weeks of traveling recently I've learned I'm really ready for a break from city life. This weekend I'm going to move to a quiet beach town so I can focus on my web projects (I was in the city in order to meet with key people for the bigger project, which is now on hold until we sort out the investor issue.)
* Kicking around an idea with my friend and co-blogger Will, that hings on a common passion we have. The idea had been brewing for 2 weeks, but we hadn't started on it until today.
* 2 relatively clear schedules (we are still both busy, but who isn't) and 1 good idea-- we immediately spend 5 hours brainstorming a business plan.
* Develop business plan (final version is 3 paragraphs), discrete product description, and a company name. First paragraph: WHO ARE WE. I wrote this in a tag cloud format. The who we are section makes some bold and polarizing claims about the persona of our product and our company. The goal here is hubris. You want to pick fights with your competitor and set your signs high. Second: PRODUCTS. The "products" paragraph is for additional products we can create one we get to the stage of scaling the business. The first 30 days will be spent developing the product and infrastructure. Third: COMPANY STRUCTURE. This paragraph describes who is involved, and how we are going to deliver, market, and distribute the product. This is all very simple. I've worked in some BIG companies, and I think, like a lot of others, that traditional business plans are junk.
It is popular, and I think extremely helpful, to test niche's before you go after them. This can be done in a variety of ways. Before I launched my first business, I literally put up a website with a picture from my competators website and described it differently.This is a big time ethical slip. I know. After a week on the web, people started buying my fake product. It was expensive enough that I new it was a go, so me and my partner put all our energy behind it (at the time we were also testing other niches with less ethically challenged approaches).
Why aren't we going to test this niche?
1. We have enough passive cash flow to support our lifestyles as they are. We are making this product because we love the idea. So, if you are just starting out you want to optimize your time and spend your time creating for the most profitable niche. This, for us, is really a "love niche" so the lifestyle potential trumps any uncertainty about the profitability.
2. Google Keyword Tool Research is compelling. There are a lot of online marketers who are ninjas with the Google keyword tool, and I don't spend a whole lot of time crunching #'s. I think it's just my personality. I do however take a look at things like keyword volume (total # of searches for a key term, now Google lists the #'s) and advertising competition for those keyterms.
3. Killer combination - It just so happens that the key terms we are going after have huge search volume and not a lot of advertiser competition.
Combine this with our passion for the subject, and we decided we'd rather spend our time developing the product then testing niche's or product ideas. It's a little bit of a risk, but we are willing to dive in head first. The key thing is that we are confident in the structure. In my view, that's more important than being confident in it's success. The reason: there is a good chance you are gonna make it and be successful. You are smart, hardworking, and and your friends love you. You don't want to deliver yourself a pain in the ass.
FINALLY, A GOAL
Based on some keyword research and some booze fueled planning, we believe we can launch an EBOOK product in 30 days, and within 6 months achieve 4,000 to 6,000 dollars a month in sales. At that time we can use the cash flow we've created from the product to scale the company into other areas mentioned in the PRODUCTS part of our business plan. Doable? Yeah. We'll keep you updated.
I won't reveal the product or niche now, but I promise you this: It isn't how to make money online or how to become a lifestyle designer.
Information businesses are ideal for lifestyle designers.
With an information product, you can digitize your inventory so you can 'virtually' distribute all of your products. NO inventory, no distribution costs, no shipping costs, and completely location independent. Cash flow won't be an issue either-- all your production costs are 1 time costs (either your time or the cost of a team of freelancers to create the product.)
Although I managed to earn my freedom from hard goods, I wouldn't recommend it to anyone, even if they have a great idea. I would only suggest it if you have pre-existing relationships that you can leverage. If you are starting from scratch, it's better to execute on a mundane information business idea, then a great hard goods idea.
Information products can be launched fast (here we are going to go for 30 days) and can supply you with the cash flow and required patience to go after your hard good dreams.
This is all to say, the structure of your business is often more important than you product or the quality of your idea. There are a million ways to make a buck, you want to make sure the structure of your business doesn't cause a whole new set of problems for you once you start it. Whatever you do create will likely be in your life for a long time-- you are building an asset. Since I already have a few sources of passive income and companies that I spend my time on, I want to make sure this new venture not only supplies me with another source of passive cash flow, but serves my lifestyle directly. Here are the lifestyle criteria I created for this new business. I think this is an important and necessary step, even if it is your first business. I didn't do this for my first lifestyle business, instead I over focused on money. It has worked out, but with more difficulty than if I had focused on my lifestyle at the beginning.
Van's Lifestyle "Muse" Business Criteria
* Sell to customers I would want to hang out with.
* Help me to develop and further engage my passions for writing, travel, and technology.
* Contribute to my status as a thought leader in a niche I love.
* MUST BE FUN
* I must have something unique and interesting to offer the market.
* Must be completely digital inventory with low operating burden.
* 100% passive income after product launch.
DAY 1 - Brainstorm, Research, Business Plan
The unstable markets in the USA at the time of writing caused me to loose a key investor in a larger project I was working on. My schedule went from BOOKED SOLID to totally clear. Here's what I did:
* Put my apartment on the market - I don't want to bother with a sublease. During my 6 weeks of traveling recently I've learned I'm really ready for a break from city life. This weekend I'm going to move to a quiet beach town so I can focus on my web projects (I was in the city in order to meet with key people for the bigger project, which is now on hold until we sort out the investor issue.)
* Kicking around an idea with my friend and co-blogger Will, that hings on a common passion we have. The idea had been brewing for 2 weeks, but we hadn't started on it until today.
* 2 relatively clear schedules (we are still both busy, but who isn't) and 1 good idea-- we immediately spend 5 hours brainstorming a business plan.
* Develop business plan (final version is 3 paragraphs), discrete product description, and a company name. First paragraph: WHO ARE WE. I wrote this in a tag cloud format. The who we are section makes some bold and polarizing claims about the persona of our product and our company. The goal here is hubris. You want to pick fights with your competitor and set your signs high. Second: PRODUCTS. The "products" paragraph is for additional products we can create one we get to the stage of scaling the business. The first 30 days will be spent developing the product and infrastructure. Third: COMPANY STRUCTURE. This paragraph describes who is involved, and how we are going to deliver, market, and distribute the product. This is all very simple. I've worked in some BIG companies, and I think, like a lot of others, that traditional business plans are junk.
It is popular, and I think extremely helpful, to test niche's before you go after them. This can be done in a variety of ways. Before I launched my first business, I literally put up a website with a picture from my competators website and described it differently.This is a big time ethical slip. I know. After a week on the web, people started buying my fake product. It was expensive enough that I new it was a go, so me and my partner put all our energy behind it (at the time we were also testing other niches with less ethically challenged approaches).
Why aren't we going to test this niche?
1. We have enough passive cash flow to support our lifestyles as they are. We are making this product because we love the idea. So, if you are just starting out you want to optimize your time and spend your time creating for the most profitable niche. This, for us, is really a "love niche" so the lifestyle potential trumps any uncertainty about the profitability.
2. Google Keyword Tool Research is compelling. There are a lot of online marketers who are ninjas with the Google keyword tool, and I don't spend a whole lot of time crunching #'s. I think it's just my personality. I do however take a look at things like keyword volume (total # of searches for a key term, now Google lists the #'s) and advertising competition for those keyterms.
3. Killer combination - It just so happens that the key terms we are going after have huge search volume and not a lot of advertiser competition.
Combine this with our passion for the subject, and we decided we'd rather spend our time developing the product then testing niche's or product ideas. It's a little bit of a risk, but we are willing to dive in head first. The key thing is that we are confident in the structure. In my view, that's more important than being confident in it's success. The reason: there is a good chance you are gonna make it and be successful. You are smart, hardworking, and and your friends love you. You don't want to deliver yourself a pain in the ass.
FINALLY, A GOAL
Based on some keyword research and some booze fueled planning, we believe we can launch an EBOOK product in 30 days, and within 6 months achieve 4,000 to 6,000 dollars a month in sales. At that time we can use the cash flow we've created from the product to scale the company into other areas mentioned in the PRODUCTS part of our business plan. Doable? Yeah. We'll keep you updated.
I won't reveal the product or niche now, but I promise you this: It isn't how to make money online or how to become a lifestyle designer.
