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I’ve noticed a slightly odd trend in the world of location independent and digital nomad businesses - it’s a reluctance or inability to discuss the business end of things.
By that I mean that, when asked, some digital nomads seem unable or unwilling to clearly articulate what their business actually does or is. They say they run one whilst traveling the world - but if they struggle to say what it is they actually do to earn their income, is it really a business or are they just kidding themselves?
The reason I’ve been pondering this question so much is that I’m deeply immersed in finishing off the location independent business course - due to launch next week (yes, I know it’s a bit last minute but I’m one of those people who works better under pressure!!).
I’ve been thinking about the definition of a business - and how that relates to the many online ventures that we digital nomads are involved in. Unsurprisingly, many of these ventures are web-based or website-based (there is a difference) and one of the conclusions I’ve come to is this…
Your venture (whether online or offline) is not a business if it doesn’t have the following properties:
- Commercial intent (i.e. the intent to receive monetary reward in exchange for the provision of a service/product)
- One or more clearly defined revenue streams
- A short, medium and long term strategic plan that is aimed at achieving an ultimate objective (usually focused around providing some sort of product/service to a set of customers)
If your project doesn’t have the above, then is it a business? Or is it a hobby? I think this is worth thinking about especially for bloggers - or more specifically those bloggers who are aiming to generate an income from their site.
There is a big difference between earning a bit of revenue from advertising, sponsorship & affiliate schemes on your site and running a blog-based business. Anyone can do the former, not everyone can do the latter.
The learning curve I’ve been on since focusing on turning the location independent blog into an actual business has been steep - and I’m still on it.
I’m learning that there’s a huge difference between running a blog as a hobby and running it as a business and it’s this distinction that I think many people still confuse - especially digital nomads and anyone who starts up a site hoping it’s going to be the business and revenue generator that will see them gallivanting around the world.
It won’t unless you run it like a real business.
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Comments
03.02.09
Excellent points! I come across many like this, and I was victim of it myself for awhile. Consistently, I have found that A) Many have trouble having the confidence to take what they love to do and charging people for it; and B) people have trouble finding a niche that they can bank on, so they try out like 10 things at once instead of focusing on one or two.
03.02.09
I like the direction your thinking is going...
I would take your definition of a business a step further and add this point:
- You have a process/ product/ model in place which leverages your time.
I think (and many might disagree) that unless the business is able to generate revenue, not directly related to the number of hours you work, it is not really a business, but rather a freelance situation. Therefore if you charge by the hour and don't have others working for you who you make a profit on, you are really just selling your time, much as an employee does, except that you have some more freedom.
In any business, its important to build beyond yourself and build it in such a way that it can generate income beyond the time the owner works in it.
03.02.09
Quote from a senior engineering director at McDonnell Douglas, upon seeing a number of engineers and technicians who had previously left and were now returning to compete for their old positions:
"If you're not making money with your business, all you've got is an expensive hobby."
03.02.09
That's because they're the engineers of the digital world! Look into any large organisation and there will always be tension between the 'tecky' engineering guys and the 'business' guys. One has the creativity and technical skills and the other has the commercial acumen. You don't normally see both those things in the same person.
03.02.09
Nevertheless, the saying still holds true. The purpose of a business is to MAKE MONEY by providing a service or manufacturing a product.
If you don't make money, you really don't have a business.
03.02.09
Brandan - Good point, it also goes hand-in-hand with having a clearly defined exit strategy from your business, to ensure you don't become the business.
Heledd - I think I might be one of those rare beasts who is both creative, techy AND has business acumen :)
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