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Zen and the Art of Lifestyle Entreprenuerism. Why Do We Work?. To put food on our table To be part of a team, social reasons Recognition To achieve excellence in a particular domain. Self actualization To make a difference. Who is an LE.
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Why Do We Work? • To put food on our table • To be part of a team, social reasons • Recognition • To achieve excellence in a particular domain. Self actualization • To make a difference
Who is an LE • Those who start an enterprise to achieve a certain lifestyle. To them money is important, but not the only thing worth working for. They aspire to maximize quality of their lives, given their passions. They aim for a well-considered life.
Original Definition • The term lifestyle entrepreneur was coined in 1987 by William Wetzel, at the University of New Hampshire. Mr. Wetzel used it to describe ventures unlikely to generate economic returns robust enough to interest outside investors. In financial jargon, there's no upside potential for creating wealth," • "Lifestyle ventures are usually ventures that are run by people who like being their own bosses" . "But they're in it for the income as well. Indeed, lifestyle entrepreneurs offer a different...view of success than those who are mainly after wealth accumulation
Why be an LE • To achieve personal non monetary goals. • To make substantially more money than full time employees. • Long term job security. • Leverage time.
Types of LE • Time minimalists: Spend the least amount of time doing work. • Nomadic entrepreneurs: Location agnostic. Freedom to work anywhere • Doing it for love: Converting a hobby into enterprise
LE Personality Traits • Same as those of any other entrepreneur • Possessing drive • Ability to take risks and handle unstructured life style • Maintain balance in life • Domain savvy ( preferably a couple) • Work on fast clock • Health conscious
Are you Ready? • If you are over 35, you could be ready • Able to deal with unstructured work regimen. • Able to work out of different places • Able to Work effectively at home • Able to take risks. • Comfortable with marketing yourself
Check List • Am I a leader? Am I self-confident? • Am I organized? Am I a self-starter? • Do I have lots of energy? • Do I have a safety net? Can I afford to take this risk? • Am I in good health? • Do I mind doing administrative tasks by myself at first, like answering the phone and managing the books? • Do I have marketable skills and experience? • Will my family support my decision? • Do I have the interpersonal skills to make sales, manage clients, and negotiate with stakeholders? • Do I have a decent credit rating?
Small & Micro Business • Micro business: Annual revenues under $1 million • 15 % of the US economy • Small Business: < $4M in revenue and less than 25 employees • Generating half the non-farm output of the U.S. economy, and employing about half of all Americans not working for government, while adding 60 to 80 percent of net new (nongovernmental) jobs annually; • Comprising 97 percent of exporters and producing 29 percent of all export value—key points when we consider that exports have accounted for about 25 percent of U.S. economic growth over the past decade and support an estimated 12 million jobs; • Winning nearly 24 percent of all government contracts; ranging from ship construction to printing brochures.
Small Business Startups There are more than 25 million small businesses in the U.S. More than 98% have annual sales of less than $1 million. They tend to be owner-managed and entrepreneurial, and provide 80% of the jobs in the U.S. Each Year, Over 1 Million Businesses Started 40% fail within a year 80% fail within 5 years • 90 percent out of roughly 20 million American small business owners appear to be motivated by lifestyle more than money
Consulting from Client’s Perspective • Time to market pressure • Lack of in house expertise • Short term need • Higher level expertise • Access to consultant’s network • Cross Pollination • Un biased assessment
Manager’s Motivations • Less risky • Less money • Quicker to hire • Easier to let go • Ability to get higher experienced person • Lower severance and replacement costs
Turnover Cost • The costs incurred for exit interviews • Administrative functions related to termination • Separation/severance pay • Any increase in unemployment compensation. • Attracting applicants • Entrance interviews • Testing • Travel/moving expenses • Pre employment administrative expenses • Medical exams • Acquisition and dissemination of information. • Training Costs
Enablers • Connectivity: Broadband, wifi, twitter • Shared Applications: skype,google docs • Payment Automation: PayPal • Access to Intellectual Property: Open Software, University and FFRL Labs • Pool of Specialists • Marketing Tools: Web site, social sites,LI
Consultant Motivations • More money • Select Interesting work • Availability of more time to do other things • Variety of work environments • Geo agnostic and global work
My Reasons • Spend time with family • Finance kid’s education • Work hands-on on projects of my interest • Work at a time and place of my choosing • Play golf during week days • Travel for prolonged periods • Long term job security • Stay technically sharp
My Concerns • Lack of Security • Unable to work on Interesting Projects • Inability to maintain domain edge • Lack of recognition
Security • In Massachusetts, employer rule comes first and all employees are at-will. Which means the company can fire you at any time, for any reason, or for no reason. • Only slightly less secure in the early years. More secure in the later years than full time job.
Interesting Work • Ability to work on different aspects of a variety of projects, product and technology development. • Interesting work follows talent in the long term.
Inability to maintain domain edge • Malcolm Gladwell’s “Outliers” talks about longevity has a much powerful effect than intellect for amazingly successful people.10000 hour rule • Longevity has quality of its own. As you get more experienced in the domains of your excellence, that attracts more follow up projects.
Lack of Recognition • Recognition appears in different ways. • Non Organizational Recognition • Client’s customer recognition • Trade Platform recognition
Top Level Nuts & Bolts • Select the right structure • Clear Plan for next three years • Build the core team • Figure marketing and sales strategy • Develop pricing guidelines • Financing • Work Environment • Define Balance
Business Plan • What are the primary goals. Monetary and non monetary? • Who are the potential clients/customers? • What is your product or service? • What is your marketing strategy? • What is your pricing strategy?
Team • Accountant • Lawyer • Banker • Agents • Associates • Web Master • Insurance Agent
Marketing • Networking • Web Site • Paper & Publications • Target Resumes for each domain
Geo Agnostic View • Think Globally • Web Site and collateral material should reflect it. • Aggressively cross link with related web sites.
Accountant • Find an accountant with good relationship with a business oriented bank and is ideally also a lawyer. • Get the largest possible business line of credit.
Tax Benefits • You can deduct business oriented expenses • For an S Corp you can pay yourself a reasonable salary. You can borrow from an S Corp • IRS allows distribution to owner
Pricing • Develop Chutzpah to ask for what you deserve • Fixed Cost vs. T&M ( hybrid) • Retainer • Many factors go into pricing • Duration of work • Flexibility of work • Location of work • Nature of work
Handling Middlemen • Middle men perform a useful function • Try to avoid longer than one year commitment • It is always possible to get out of a contract if pricing is not reasonable
Contract Pitfalls • Negotiate NDA • Read non compete and IP ownership documents carefully • There is usually a lot of wiggle room • Add as much as possible in Addendum to cover your exposure
Liability Exposure • Liability Insurance Policy of $1M • Keep client appraised with progress with frequent reports and emails • Be up front about delays if any • Work on periodic deliverables
Client Interaction • Be super professional as your client is the best reference for future work • Over deliver • Make your manager succeed • Maintain distance from company politics and culture • Offer advice only when solicited
Publishing • Publish at least one article every year • Present a paper in conference • Write a blog or article on your web site periodically • Put up your work product on web for free
Leveraging Time • Give away expertise • Develop a Product • Develop and license technology • Teach a related subject
Health & Family • Avoid thinking of time as money • Your health comes first • Allocate time for family • Play sports with social dimension • Take vacations even if short ones • Use the time flexibility to your maximum advantage
Financial Security • Maintain a disability insurance • Get a line of credit on your home to even out the bumps on the road
Working out of Home • Locate your home in the middle of potential client sites • Create private space for yourself • Establish discipline within yourself and family • Monitor your time • Be super ethical in your work
Money for Nothing • Now look at them yo-yos thats the way you do it • You play the guitar on the mtv • That aint workin thats the way you do it • Money for nothin and chicks for free • Now that aint workin thats the way you do it • Lemme tell ya them guys aint dumb • Maybe get a blister on your little finger • Maybe get a blister on your thumb
Maximizing Quality of Life • The main goal is to enjoy the journey • Be charitable with all around you • Longevity has a quality of its own • Stay close to your passion • Enjoy the brief time kids are with you • Reflect and learn between projects • Believe in yourself
Questions?? • Thank You for your time and attention