Yesterday, while I was driving, I went on a rant about passive income and what it is REALLY like to start a business.
The rant started because I was watching a show with my wife the other night and there was a man in the show who had a desk job at a home building company who made the comment “I think I am going to go out on my own, start my own business so I can have more free time and spend more time with my family“. My wife looked at me, chuckled, and said “Only someone with an office job that does not own a business thinks that if they start a business they will have more free time or more time with their family“. And she is right. Here is the truth about starting a business…
Let’s Start With Passive Income
I hate to break it to you but there is no such thing as passive income. No matter what area of income we are talking about, it requires any combination of the following: hustle, hard work, research, maintenance, time and money. None of those sound passive to me…
I understand that there are some markets with “seemingly” passive income like home renting, stock investing, multilevel marketing companies etc. But even those markets require lots of hard work to be successful. Sure you can buy some stocks and never look at them again, and if you are lucky you might even make a few dollars. But to truly be successful in the stock market, you have to do many days of research, constant monitoring, and making lots of moves. Not very passive
If you are renting out homes as “passive income” you will learn quickly how non-passive that really is. You have to deal with the tenant, you must repair the home and appliances when something is not working properly, you have to make sure the house is not being destroyed, new paint, carpet… Sure, you can hire someone to manage the property/rental and hire contractors but even then, you are managing those people so they can properly manage your assets.
Multilevel marketing companies are famous for preaching “financial freedom and passive income”. However, the very core of those companies are to build a team and manage them to success. That does not sound passive at all. Being a successful leader in multilevel marketing requires tremendous leadership and motivation skills to keep your team going. Not necessarily because they are bad at staying motivated, but because they signed up for the promise of passive income and are just now realizing that they have to WORK for that income.
NOW, I am not saying that investing in stocks is a bad thing or that renting your home is a bad thing or that you should not work with a multilevel marketing company. My point here is that there is no such thing as making money without working for it, short of winning the lottery. If you are planning on starting a business or embarking on the journey of being an entrepreneur so that you can have passive income, you are in for a big surprise and will likely fail.
What It Is REALLY Like Starting a Business
When I started my first business, it was not because I had some great idea and was ready to generate financial freedom, it was because I lost my job as an executive for a New York fence manufacturer and had to do something to put food on the table for my family. Having a background in the fence construction market, I decided that we would move back home to Detroit, Michigan and I would start Paramount Fence, a fence installation company.
I have always been an entrepreneur. I remember stealing candy, pens, and pencils from the local drug store every morning on my way to grade school and then selling the stuff out of my backpack to classmates. Not the most honest living, but hey, lets keep the focus on the hustle here. In all honesty, since starting Paramount Fence, I have spent less time with my family than before. Sure we are able to take vacations more often and I most certainly get a healthy dose of family time because it is a priority of mine. But the point here is that starting this business did not grant me more free time. It actually took up all of my free time.
If your goal is to start a successful business, build an empire, or create a machine (company) that will eventually continue in business after you retire or move on to other ventures, then it will require a very strong hustle muscle, massive action, lots of hard work, late nights, early morning, money, determination, good priorities, and an ability to lead. Without these things, or if you are getting into business because you think it is the ‘easy way out’, you are most certainly going to get beat up in the market and eventually fail.
It is not all glitz and glamour…
From the outside, being the business owner seems great, it seems like the easy life, lots of free time, and easy money. Just kick your feet up, point, and everybody will do what you say. The truth is, We spend our days putting out fires, dealing with problems, managing employees, lawsuits, innovating, dealing with disgruntle clients, putting out fires, dealing with problems, PUTTING OUT FIRES AND DEALING WITH PROBLEMS. Sure, there are highlights and perks of being the boss of a successful company and I would not change the course of my career for anything, I love it. But, it is far from constant glitz and glamour and requires you to have a very strong mental game and thick skin. Pro Tip: This junk ain’t for everyone…
Focus on the Macro. Not the Micro
If you want to be successful in business, expand your earning ability, and be a successful entrepreneur, you must be able to stay focused on the Macro and not lose sight when the Micro sucks… The “Macro” is your big picture. It is the end goal. It is where you see the company and/or yourself in the next 30-50 years. The “Micro” is the day-to-day crap that you have to deal with in order to make that happen.
How to stay focused on the Macro
To stay focused on the Macro, you need to know what your Macro is. You need to know what your biggest goals are and where you want to go in life and in business. Knowing these things will allow you to set the proper goals and create the road-map to your success. Once you have this road-map and goals created, you will know that your actions line up with reaching those goals which will help you to endure through the rough days when you are getting beat up in the market, getting discouraged, and/or start second guessing your efforts…
Need help to find out what your Macro is? Hit me up on Twitter or Instagram @johnrburke2 and lets figure it out.