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.
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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.
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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