Most Aspiring Creators and Founders Are Building the Wrong Business

Once your side hustle attaches an ROI to each hour of your time, you’ve officially recreated your own rat race.

On a monthly basis, I turn down thousands — maybe tens of thousands — of dollars for a certain type of work I simply refuse to do. It’s the same type of work countless side hustlers, aspiring entrepreneurs, and creatives are throwing themselves into, unaware of the dangerous trap ahead. If you’re an early-stage entrepreneur, creator, or full-time freelancer who’s thrown yourself all into this potentially lucrative service, this may be the wake-up call you never knew you needed.

Be careful what you charge for

When we make the decision to start a side hustle, leave a job, or attempt or invest in a new skill or hopeful business venture, we’re driven by different reasons.

• Money: Some — probably most — of us are somewhat financially motivated. We want something to pad our pockets or out-earn or replace our 9 to 5s.
• Lifestyle: Many creatives, solopreneurs, side hustlers, and freelancers are attracted to the freedom of setting our own schedule, and working when, how, and where we please. All valid pursuits.
• Passion: A lot of people aspire to turn their passion, talent, skill, interest, or hobby into a lucrative venture they actually like. In other words, they want to derive fulfillment out of their moneymaker, rather than sign up for a meaningless clock-punching gig to pay the bills.

Sometimes, however, we’re driven by something else: Desperation. I’ve been there. Years ago, working on Wall Street, I had seen a slaughtering of ambush layoffs, from a 24-year-old fired for his tone in an email to a VP shunned because his industry took a nosedive. The next day, both were out. That environment can make anyone feel less than secure, and the idea of getting the you-know-what out of there became more appealing. So, I quit.

However, quitting out of desperation can lead the recently self-employed to slip into a new dangerous addiction: Trading dollars for hours through client work, building other people’s businesses instead of their own.

A few years into my entrepreneurial journey — after a couple very expensive failures — I was approached by someone interested in retaining me for a financial project. This wasn’t just a financial project; it was a massive financial and tax-related headache — and one I never should have accepted.

Unfortunately, as a “freelancer”, entrepreneur, or self-employed person, it’s easy to feel like every client offer is a money grab we can’t afford not to take. I’m here to dispute and debunk that line of thinking altogether. In fact, I posit that prioritizing lucrative client work can be the very ceiling on your success, fulfillment, and earning potential.

Strangled by your own ROI

I’m fortunate to have built some largely automated businesses that allow me to generate an outsized return on just a few hours of time. There’s a major downside to that: Knowing just how much money my time can generate per hour attributes a specific ROI to each hour or minute I spend. Thus, that ROI automatically dictates whether a new activity is a good or bad use of my time.

Let’s say one venture I run generates $5k per hour I spend. If that’s the case, how in the world can I justify learning a new skill, taking on a new project, or allocating any considerable time to a venture that generates a lower return?

Once you adopt that ROI-imprisoned mindset, you’ve officially recreated your very own rat race — and I’ve been there myself.

This mindset creates a very black-and-white method of decision-making:

• If a client offers me more than $5k per hour for a job, I have to take it on, as this is an increase to my time-income ROI.
• If a new project of interest will generate less than $5k per hour I put in, I can’t really justify it, since it’s a comparatively irresponsible use of my time.
• If learning a new skill will cost me money and prevent me from putting time into other ROI-generating activities and projects, it’s a poor financial and time decision, and thus, I’d best pass.

Just like that, a 6- or 7-figure solopreneur income can freeze your progress, education, and happiness with an ROI-obsessed hamster wheel of its own. This is exactly how clients can impede your long-term success.

The business you want versus the one you have

Are you building your own dreams or someone else’s? That’s the question too few solopreneurs, aspiring creators, and freelancers ask themselves when they construct entire businesses around client services.

The hardest decision you’ll make as an aspiring solopreneur is whether to prioritize your long-term goals or your short-term goals. Sometimes, prioritizing the near-term income can delay, derail, or altogether impede the long-term potential.

• For example: I run largely passive businesses built off of products I created years ago. Those products took me months to create, during which time I made a big, fat zero dollars. However, they’ve paid me back exponentially with years of largely passive 6+ figure earnings.
• The alternative: Instead of making zero dollars for months building those products, I could have taken on freelance client work and potentially made thousands along the way. That said, that client work wouldn’t have gotten me any closer to creating these products, and thus, wouldn’t have set me up for an automated multiple-6-figure business.
• The dilemma: If my long-term goal was to offer my services individually, building a book of client business, testimonials, and referrals could have been the better choice. If, alternatively, my goal was to build a product, an independent project, or a passive stream of income, the client work could have been more of a drain on my time and resources than a benefit.

If you’re in love with a skill, talent, or expertise and your dream is to provide that service for individual clients, operating as a full-time freelancer may be the business of your dreams. However, if client work is simply a means to an end or financial padding on the way to the business you really want, you may need to draw the line and put the long-term cart before the short-term horse.

3 steps to free yourself up for the business you want

But, we all have to eat and pay rent, right? Right — and that’s where client work can act as the pivotal launchpad to a 6- or even 7+ figure passive income venture that enables your real dream business. Here are the three stages of client work for aspiring creators seeking to escape the dollars-for-hours trade-off:

1. DIY: If you have a marketable skill or expertise — whether it’s one you’ll use to build your lifelong passion project or simply what you amassed in your corporate desk job — there’s no shame in monetizing it. There is, however, disappointment in recreating your own rat race with a business you can’t stand that puts your clients’ dreams ahead of your own.
2. Build a team: Step two, if you want to free up time and retain your customer base, while stepping back from individual client work, is to build a team beneath you. There’s no need to turn away clients or shut down your expertise-based income stream altogether; you can simply begin to erect the barriers that provide you the time freedom you need.
3. Build passive income products: Once you’ve successfully established yourself as an authority in a field, amassed enough skills to educate or serve others, or cultivated a target audience, it’s time to detach your time from your ROI. Passive income products — from e-books to courses to resources, etc. — are the best way to engineer long-term ongoing income. However, these don’t need to be your passion project either!

At the end of the day, you have two options to choose from:

1. Build the project or business you love (now)
2. Build a business (now) that allows you to build the project or business you love (for the foreseeable future)

As someone who’s done a bit of both, I can assure you that option #2 is much easier. You don’t have to solve world hunger, win an Oscar, or become the red carpet designer to the stars first. You don’t have to go after the loftiest goal from the jump or build your claim-to-fame business today, tomorrow, or even this year. Great things can take time, and the pressure to pay your bills may not engender the creative freedom they require. Sometimes, pursuing the little wins first enables the freedom, confidence, and resources to foster the bigger ones later.