How to create a self-sustaining on-line business
Jun 08, 2009 22 Comments Have you ever dreamed about owning a business that continues to bring in a steady stream of income each month, regardless of how much you work? Are you tired of having to depend upon your employer for your livelihood? Do you fear being laid off from your job because the company you work for is downsizing? Maybe you’ve taken a pay cut or two in the recent economic crisis, and wonder how you can continue to make ends meet.
There are many reasons people dream of owning their own business, from having more free time to pursue their dreams, to having money for the things they want. And I will tell you that these are both real and possible rewards, if you do it right. But we also hear stories of those who try to start their own business, and fail, ending up in debt and worse off than when they started. Or those who build businesses and are so busy taking care of customers and administrating the business that they are more trapped by it than if they worked for an employer. No wonder so many people who think of owning a business are intimidated by the idea, and don’t even try. I want to help dispel some of these fears and give some practical guides for getting started.
I certainly don’t claim to know all the answers here. Over the past several decades, there have been countless books written on the subject of business building by people who have much more experience than I do. My experience may not be as well researched, or as broad, so I’m not going to try and offer a comprehensive guide. But in the past few years, I have built a business that now fully supports my family and takes me less than 5 hours per week to maintain (see my About page for more info). Therefore, I do feel like what little I have learned in this process is worth sharing.
Of course, there’s no way I can share everything you need to know about business building in a single blog post, even if I did know it. So I’ll be writing these tips out over a series of blog posts, each focusing on a certain principle. I also want to clarify that the type of business I know how to start and run effectively is “subscription based web applications for niche markets”, or software that runs on the Internet, and that people pay monthly to use, that targets a specific group of people. I also have experience creating a small (by choice) but successful freelance web development firm. While the principles I’m going to share may also work for an on-line shopping cart, an affiliate or information product business, or even a brick & mortar store, the practical tips I’m going to share will be most applicable to those interested in starting a web application business, or service businesses.
Why am I sharing this information… and for free?
I’m sure there are lots of marketing gurus out there who would scoff at me for sharing this information for free. They would probably encourage me to create an elaborate video training program and charge hundreds or thousands of dollars for it, or at least write an e-book I could sell for $97 or something. So why don’t I do this? There are a few reasons:
- I’ve never told anyone this information before, and I’ve never tested it outside of my own experience. So while I know it works for me, and am confident I could create another successful business using the same principles, I can’t really guarantee that it will work for you, since I’m not you. There’s a lot more that goes into creating a successful business than tips and tricks, and I’ll try to go into this. But this is my first attempt at helping people in this area. Maybe once I’ve had more experiences helping others through this process, I might create some kind of product. But who knows?
- I want to focus more on being “happy” than on being “rich”, and I believe that I will get much more satisfaction from knowing I have helped someone else become successful just because I’m a nice guy, than from trying to convince people to do what I do just so I can make money. Plus, I think it’s mostly my family and friends who are reading this blog right now, and I don’t want to charge them.
- I don’t really need the money. Okay, sure, more money is always nice. But I really am happy where I’m at financially and can provide sufficiently for my family. No, I’m not even close to being a “millionaire”, and while I may be one someday, it’s not a goal I care that much about achieving. For me, it’s not so much about the money, as it is about the lifestyle I’m living and freedom I have. I’ve already learned how to make money. For me, time and happiness are much more important – and elusive.
I’d like to post something on this subject once a week (or maybe once every couple weeks depending on how quickly I can organize my thoughts). And I’ll keep writing about it as long as I have something to share. If you have specific questions about building a business you’d like me to address, feel free to post them below and I’ll try to include my thoughts about it here or in future posts (or contact me directly if you want). If I can share something that will help someone else out, it will all be worth it to me.
Brandon Pearce
Brandon is a location independent entrepreneur, musician, worldschooling father, and the principal author of this blog. He's all about reaching his potential and enjoying life to the fullest in each moment.
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Hey, great post, really well written. You should write more about this.
I’m glad you are organizing your thoughts and experiences here. I think it is a great way to reflect on the process you’ve already been through, and to continue learning through life, wherever it takes you. :) Hopefully it will also be a good place for others to share their thoughts, and gain some helpful information as well.
Brandon,
I am trying at this goal myself. I have been my fathers caretaker since my mother passed 3 years ago and working a regular nine-to-five didn’t work. I decided to open my own video game store in sugarhouse, and while it allows me some freedom to take care of dad at the level needed, it is by far not a financial freedom. Constant stress of making ends meet for the store and every moment not taking care of dad is poured into the store…so yeah, not where I planned to be. I’ll definitely be keeping up with you!
Thank you Brandon for sharing your experiences and idea’s. You have learned at a young age what is really important in life…
I’m looking forward to future posts. (and can’t wait to see you back at Tai Chi!)
Awesome Brandon. Glad you’re taking this step.
I am looking forward to your next post!
Well, I’ve learned one thing from you, sometimes it is better to put all your eggs in one basket. While I’m jumping from project to project you’ve stuck with MTH and now it’s paying big dividends. Maybe that’s a topic you can cover.
@Patrick Murphy – Thanks for sharing. If you haven’t read the E-Myth by Michael Gerber, you might want to take a look since it aims to solve the exact problem you describe – being overrun by your business. It helped me a lot!
@Dustin – It’s true. Persistence does pay. I’ll definitely be covering this. Thanks Dustin.
What I need is for you to infuse me with your confidence, motivation and enthusiasm. :) Once I’ve got that, I can proceed to the successful online business thing.
Great job, by the way.
Very good advice Brandon. I admire your ability to focus and prioritize. Your gift for conveying information will be beneficial to so many, I am looking forward to reading more from you. Wonderful news about Japan, pity the family can’t accompany you. Have a super time hon!
-B
Nice article, I am looking forward to reading more…
Keep it coming.
-Tyson
Ashlee and I really want to work from home. We are so sick of working in an office and not being able to be home with our kids. The only problem is that we are not smart/motivated enough to do anything about it. lol… If only we had your brains, we could do it.
Love you bro.
LOL- I just realized that my last post may be read by some people that Ashlee and I are… well.. partners. That’s funny. Although it would be awesome to have her as a roomate. He he.
[…] tasks I feel most pressed to accomplish. Lately, I’ve been balancing mostly been writing my book about how to create an on-line business, and composing hymn arrangements for […]
Thank you for taking this step to help people .
Brandon, you are wonderful. I’ve always known that, but you are doing so much good for so many people. I was impressed when I first met you a few years ago, but you continually impress and astound me – not only by what you are doing and accomplishing with your life – but because of your example and what you believe in and do. Keep up the great work. I love following your blog. I wish all the best for you and your family.
Jerald
[…] compared to what they expect the author to do. So I will probably be self-publishing my book on how to create a self-sustaining on-line business, once I finish it. Maybe I’ll do something similar to what Leo Babauta did on his awesome new […]
Hi Brandon,
Although I am not your kith or kin, I have stumbled upon your blog and am reading it with enthusiasm. Three weeks ago I moved from Kelowna, BC Canada and ended up about 2 miles outside of San Pedro de Poas. I am loving it here. Clean air, sweet water and lots of sunshine, fruits and vegetables and good friends. What more does a body need?
I left my business as a stockbroker in August of 2008 (no, I did not cause the Crash) for early retirement and now find that I need more to occupy my time. I will be starting an online service business within the next month or so, so I am interested in any tips and advise you can provide through your own experience.
All the best to you and your family,
Melaney Phillips
Hi Brandon,
I discovered your blog recently after reading about your business on Tim Ferriss’ blog and have loved reading about your progress from start-up to being fully location independent. My husband and I are in the beginning phases of launching our own online business with the intention of being location independent within 2 years. We are planning to outsource some of the work to freelancers on oDesk.com, but I’m wondering what your thoughts are about accounting and bookkeeping. How do you manage your accounting? Other business owners have suggested that we hire someone to do it for us, since it’s not worth the headache should you get audited. But is this something that is really feasible through an online contractor? Thanks in advance!
Dona
Congratulations on taking the steps to get your business going (and on your new baby!).
As for bookkeeping, it depends on how complicated your business finances are. I just use mint.com. It’s automatic, fast, free, and has all I need. Just takes me a few minutes per month to review/adjust, and an hour or two at the end of the year to prepare things for taxes.
I tried hiring a bookkeeper at one point (who insisted on using Quickbooks), but ended up spending more time telling them how to categorize transactions than I did having mint do it automatically. So I dropped them.
However, I DO pay an accountant to do my taxes. That saves me a lot of time, and gives a certain degree of audit protection in itself. The first business accounting rule I learned is to keep my business and personal finances completely separate. Makes things much easier later on.
Good luck!
Brandon
Brandon,
I am grateful to have found your case study on Tim Ferriss’s website. I, as the previous poster Dustin referenced, have bounced from idea to idea, online product to online product, becoming convinced each one was not the right choice when it didn’t materialize into good cash flow within a month or two. It was all about me and all about making money. It’s time to focus.
You have built a terrific product that adds huge value to your customers’ businesses. That’s the message I have taken from your experience…how can I provide more value to more people? It’s what I lost sight of and where I am refocusing my energy in my business. Thanks!
Tracy