Have you ever wanted to start a business but didn’t know where or how to start?
Would you like to have a business that allows you to be successfully unemployed and never work for someone again?
Today I am excited to have a friend of mine, Tom Sylvester, on the show. He has been an owner of many successful businesses, and he is an ordinary person, just like us.
Tom Sylvester, how are you successfully unemployed?
Tom has three different businesses that he owns:
- Real estate investing: Started 12 or 13 years ago. It is set up with a team in place, so it doesn’t take much time.
- Wine and liquor store: Started about 7 or 8 years ago. It is set up also with a team in place, so it doesn’t take much time.
- Lifestyle Builders: Helping entrepreneurs build businesses very intentionally to support their ideal lifestyles.
Tom started all of these businesses with his wife, and they just released a book a month ago that builds that out as well.
He spends a lot of time with entrepreneurs helping them start and scale their businesses.
Tom and his wife found that once you are successfully unemployed, the world opens up for you and there are almost too many opportunities. They need to be picky about what they choose to work on.
Before this, weren’t you and your wife in the corporate world? Tell us a little bit about that.
Tom’s wife, Ariana, went to school for zoology, but she bounced around as a receptionist. She couldn’t find a job, but she had a lot of student loan debt to pay.
Tom met his wife the first day of college. She was the first women he met.
Tom went to school for computer science and he and his wife were on the traditional path of going to college and taking on student loan debt, with the hope of finding jobs to pay them off.
How to Quit Your Job with Passive Income
Get the Best Selling Book FREE!
As they went through college, Tom looked ahead and saw that they had about $80,000 in student loans and they had credit card debt. Neither of them had jobs coming out of school.
Tom didn’t like the math and the fact that they would need to work for the next 45 years, so he set a goal to retire by age 35.
When Tom set the goal, Ariana was not on board, because she wanted a traditional path of buying a house and having kids. They did a lot of that, but Tom had the itch and didn’t want to settle.
Tell us about Lifestyle Builders and how we can build our lives.
It doesn’t matter what you call it, everybody is seeking financial freedom. It is less about the money and more about having options and doing what you want, when you want, with whoever you want.
The biggest thing Tom saw was being clear on what that lifestyle looked like. Being a software engineer, he decided to work backwards to figure out how to engineer that.
Rather than being on that traditional path where you are always reacting and never doing what you want, instead say:
What do I want my life to look like in the future?
What can I immediately start doing that lets me live some of that life now while still being able to build more income and pay down debt to move toward that lifestyle.
Look at the end goal of where you want to be.
Give me a couple of questions that I need to think through so I can live the lifestyle I want. What is the first question everybody should start with?
Tom: Put yourself into the future. Five years from now you are sitting down. Look around and describe what you want your life to look like.
Dustin (pre-investing): Retired or successfully unemployed. Be financially independent. Own my house or have money coming in to pay the mortgage. I want my wife to know that I provide for the family, that I am successful in being a husband and provider, and that my kids look up to me and I don’t have to worry about somebody taking away my paycheck or job.
Tom: How much money do you need to be making, apart from your job, in order to allow you to have that.
Dustin: All expenses, plus travel, would be about $4,500 a month.
Tom: By answering that question, we know where you are now, where you want to be in the future, and we have some numbers around that. Most people don’t clarify their goals and they end up making a bunch of decisions.
They don’t go back and determine if those decisions are moving them closer to that goal.
Now we can work backwards and figure out how to make that $4,500. Do you want to invest in real estate? Do you want to start a business? There are so many opportunities.
How do we think we are going to generate that income? What is ultimately going to be something we can do and have an interest in while also figuring out how that is going to work for us?
From there, would you give me options? What would you suggest for somebody like me? How would you point me in the direction of finding the right path?
Tom would start with a brainstorming activity and would go through first looking at you. What are your skill sets, your passion, etc. For a lot of people, this is based off of your career, what you went to school for, or what you are doing today. You likely have skills that can be applied in a different way.
You will also want to look at what model is going to work for you. Do you have money now that you can invest that will help you get money back? Or, are you in a place where you don’t have a lot of extra money, but you have time available.
We are going to brainstorm where you are today and what resources you have available, and then match that up with a business.
In some cases, you shouldn’t start a retail store, because that requires a lot of cash up front. If you have more time available, you may have different options where you can invest in real estate and partner with someone to borrow the money.
It comes down to figuring out which way you want to do it and matching that up with the resources that are available to you.
Let’s say I am not very analytical and I am okay sacrificing and saving money, what route should I go? I can work hard, save money, and use that money to make money. What would you suggest?
Look for a problem that exists in the market that isn’t being solved. That could mean starting a business to solve that problem or it could even come back to real estate.
For example, if the problem you see is run-down properties in your town, you could turn around and turn revenue that way.
What a lot of people do wrong is they think too much of the idea. Oftentimes, people will start a business and spend too much time and money investing in that idea, before they know if it is going to make any money back.
Test and prove that you can make money, whichever way you want to go, and once you confirm that, ask: “What does it have to look like to generate $4,500 a month?”.
If the answer is real estate, and you do the expenses and it spits out $300 a door, you can then divide that by $4,500 and know how many investments you need to have.
If it is a business and you know you can sell a service for x dollars, take your expenses out and you make x dollars, now you can divide it out.
Just like you reverse engineered the vision and the goals, do the same thing with the money. It makes it more concrete and we can take action on it.
Tom Builds Systems Into His Businesses to Make The Run On Their Own
What would have to be true for this business to bring me this amount of money without me having to be there everyday?
This question came out of necessity, because Tom was working a job while trying to open a wine and liquor store, and he couldn’t physically be there to run it.
By figuring out what tasks needed to be done everyday, Tom asked what he could eliminate and just got rid of it, and he figured out what could be automated and put systems in place. Whatever was left over, he delegated.
Figure out what roles need to be filled and find the systems and people.
When they opened the liquor store, Tom and his wife were there 80 hours a week. They started taking one thing off their plate at a time and six months or a year later, they got to the point where they didn’t need to physically be there anymore.
Tom works with business owners all the time who think nobody can do what they do better than them. There are others who can do it better than you. The reason some business owners think they can do it best is they don’t understand the process. Everything is a process. Once you realize this and you write the steps down or record yourself doing it, someone else can take that and turn it into a process for you.
How to give away responsibility even if you are a control freak
Tom has everybody do a time audit. For one week, track what you do every half hour. At the end of the week, group the activities and figure out if those activities are things you enjoy doing or hate doing.
Is it something that makes you money or doesn’t make you money? Is it something that takes up your time? As you go through it, you will find there are a lot of things that don’t make you a lot of money that you can hire out for relatively cheap, that you likely hate doing.
How to Quit Your Job with Passive Income
Get the Best Selling Book FREE!
For most people, when something gets done that they don’t like doing, they want to do more of that.
Tom was painting million dollar houses in college. One of the guys he was painting with said the homeowner was lazy, because he had someone cut his lawn, clean his house, and drop his kids off. Tom thought the guy was smart, because he was a doctor and made a lot of money every hour and he was paying people to take care of all the stuff he didn’t want to do so he could maximize the time he was working. The time he wasn’t working, he was living life.
How do we maximize the time we are making money so we can maximize the time we are not, so we can live our lives.
Tell us more about removing yourself from some tasks, so you can make more in other ways.
Most of us tend to be frugal and when we are good at something and we can do it, it is the last thing we want to give up.
Dustin hires out the writing of his show notes, because he doesn’t want to write them himself. He paid about $1,000 last year to have them all written, but now they are generating more income on the back end, because more people are finding his website through search engine traffic. This will pay back over and over again. He makes so much more money when he is coaching people and doing other things, as opposed to minor things.
When we walk through it and the opportunity cost is $985, because we want to do something ourself and we think we are saving $15, now it isn’t about being frugal, it is about making more money.
Sometimes we need to double check what we are doing and sometimes it is good to have someone from the outside to check that for us.
If someone wanted to work with you and get started from the beginning, where should they get started? What is your number one tip to get started?
When Tom and his wife wrote their book, he gave it to somebody to read before it came out. The person told Tom that people were not going to read the book, because he doesn’t talk about building a business until the third section, and that is what people want.
Most businesses fail, because we don’t figure out what we want our life to look like, we don’t get our time and all of that in order before we start the business, and then all of the bad habits we have in life we apply to the business.
The most important thing before you think about what business you want to start is to go back and ask “What am I ultimately trying to achieve?”. Pick what business or investment opportunity is most likely to get you there.
Talk to me about multiple streams of income and how important that is.
Multiple streams of income are great when you build them the right way.
Tom hears struggling business owners and investors say all the time that the average millionaire has seven streams of income, so they need seven streams of income. However, these business owners and investors try to create seven at once.
They end up splitting their money, their focus, and their attention and they have a bunch of trickling streams rather than flowing rivers.
Let’s get a river going, and then siphon off a little of that river to make another river.
The first stream of income for most people is their job. First maximize that and build up your skills.
When Tom started his job out of college, he was making $40,000 a year. Over a few raises and investing in himself, he was able to get it up to $80,000 a year. That is your first source of income. He was able to have his employer pay for grad school.
After you maximize your first stream of income, work on the second. Make it effective before you make it efficient. Make sure it is something you can build into a large stream of income and then start removing yourself and get other people and systems to do the work.
Most times, you can continue building it up really well. You will get to a point where so much of your income is coming from that stream and then you can say “let’s diversify”.
Tom bought real estate when the market was down, in 2007 and 2008. Several years in, he realized the market could cycle again and he wanted to diversify his risk, which is why they opened the wine and liquor store.
When you set these businesses up and then get them off your plate, you have your time, money, and focus back and you can create the next one.
Make sure you have the first one running well, before you start the second one.
It is so easy to find many different things to do, but find one thing and replicate it. Successful people simplify it down. They find what works and they do more of what works. Stay focused on the thing that works and keep doing it.
How are you using your time and the things that you have to benefit the entire world or the people around you?
Tom has two core focuses and the first one is family. When they plan out their week, they block out time. In the summer, they do Friday family field trips, daddy/daughter dates, daddy/son dates. They put all of their family stuff first, so they are building memories.
The second focus is their business. Tom and his wife are creating an impact through their book, podcast, and businesses. They have been successful and they spend a good portion of their week helping other entrepreneurs, other business owners, that want to achieve financial freedom.
If you could go back, what advice would you give to yourself, prior to college?
Tom wouldn’t change anything, because everything he went through got him to where he is now.
If he were to say something, he would say to be intentional with decisions. When making a decision, think of the end result you want to achieve, what are the different paths, and which path is most likely to get you there.
What tools are you using to make either your business or your life better?
Google Suite is huge. Tom also uses Slack to communicate with all teammates. It avoids email and social media and the distractions that come with them.
Tom also uses Asana for managing projects.
What non-fiction book do you recommend to everyone?
How can listeners find you?
- Go to TomandAriana.com for more information and to find links to the podcast and their new book
- Social Media: @tomandariana