This Is My Exact Business Model (You Should Steal It)
This is how I created my wealth and my passive income
Last week, someone reached out to me on LinkedIn and said he didn’t quite understand my business model.
This surprised me. I always thought I explained it well, especially since my goal in writing this newsletter and for the academy is to teach you this exact blueprint so you can replicate it and build your own enterprise.
In today’s article, I will give you a step by step breakdown of how to set up your business and monetization method.
This is how I did it. It worked for me, and it will work for you.
LFG. 🔥
Step 1: Start A Boring, Cash Flow Positive Business
People know me as “the boring business” guy.
Let’s make something clear. I have no problem with high tech startups or complex business models. I’ve invested in a few tech companies and have even cofounded a couple myself.
The reason why boring businesses are so great is because they generate immediate revenue. In this model, cash flow is king. Without it, you have no options.
For example, if you build a home cleaning business, you pull a profit from every single job you complete. It is not a highly scalable tech play, but it puts cash in your pocket right away. Let’s imagine that in time, you build 4 full time teams and you’re generating $15,000 a month in profit. This is a reasonable outcome.
This is real money hitting your bank account every single month.
Now imagine you start an AI tech company that writes LinkedIn cold outreach instead. You invest $60,000 to build the software. Between development costs and monthly overhead, it takes 4 years before you even break even. You’re goal is to sell it for $2,000,000 in 3 years.
Even though the potential upside for the tech company is higher down the road, it produces zero short term cash flow.
Both business models have pros and cons. However, for the business model I’ve developed and executed on, the cash flow is the most important aspect. You need cash. Cash is the lifeblood and the oxygen of your enterprise. Without it, the whole thing collapses.
This is why I love boring businesses. Because they generate cash which gives you options.
Step 2: Work On The Business, Not In The Business
Boring service businesses are elite for generating cash, but they are terrible for organic scale. To reach a point where your company generates real wealth, you MUST operationalize it so it can run without you.
15 years ago, I read a book called The E-Myth Revisited. It is one of the most popular business books of all time, and it completely flipped my perspective on entrepreneurship.
I grew up a blue collar kid, so my worldview was that you had to trade hours for dollars. If you wanted to make more money, you simply had to work more hours.
The E-Myth taught me the critical difference between baking pies and owning a bakery. That is the famous example in the book, and I highly recommend you read it.
For this article, just understand that a boring service business will only unlock massive profits if it is locked in tight with systems, processes, SOPs, and workflows.
“The process is the profits.”
Getting your business to run on autopilot takes relentless execution. You will need to master a mountain of operational skills. For example, you must learn how to:
Hire and retain the right people
Build a predictable sales system
Market online to consistently get leads
Run profitable paid ads
Handle payroll and legal compliance
Manage equipment and inventory
You must handle every backend detail required to run an enterprise, which is always more work than people think. But after a few years of dedicated, hard work and commitment to the end goal, the business will run itself. That is when you step back from daily operations and focus entirely on growth.
Step 3: Buy Assets And Build Your Personal Holdings Company
Once your business is operationalized, your next move is to deploy that cash into assets. But what actually qualifies as an asset?
When I was 17, I read Rich Dad Poor Dad. Out of all the business books I’ve ever read, this one created the biggest shift in my thinking.
In the book, the author argues that the rich buy assets while the poor buy liabilities.
He defines these terms differently than a traditional accountant or lawyer would.
To put it simply, an asset is anything that puts money into your bank account. A liability is anything that takes money out of it. (Literally burn this idea into your brain and never forget it.)
By that definition, your personal house is actually a liability. So is your car. These are not true investments because they drain your cash.
A house becomes an asset only if it actively generates revenue, like a rental property or an Airbnb.
That is it.
Rich people buy things that produce money. Middle class people buy debt and liabilities, meaning that even though they have a high income, they are actually broke. Poor people only generate income through a recurring paycheck.
Below is a visualization of how cash flow moves through these three different lifestyles.
After reading that book, I knew that if I was going to break the financial cycle my family was stuck in, I needed a simple two step strategy:
Make money through services
Immediately buy cash producing assets
It has been a 20 year journey, and it certainly did not happen overnight. But building that portfolio is all I have focused on.
Today, I have built an entire portfolio that I call my personal holdings company.
I don’t rely on bankers, I don’t have any investors, and I use my own cash flow to acquire assets. I only invest in things that pay me back.
I have no partners and I carry no debt. My personal holdings company is mine alone. I structured all my businesses as separate entities, and my holdings company owns the equity in those entities.
I still work every day on Stodzy Internet Marketing because my agency is the engine that generates my raw cash, but my actual wealth and passive income are generated purely through my asset portfolio.
That is the entire model.
In Conclusion
The beautiful thing about this business model is its simplicity. My entire enterprise rests on three repeatable steps:
Build a service based, cash flow positive business
Operationalize the business so you can work on it, not in it
Use the profits to buy assets
The entire point of this model is to set yourself up so that your authority, your team, and your capital do all the heavy lifting for you.
When people ask how I manage so many moving parts, my first thought is always that it is actually not as complicated as it looks. The system does the hard work.
This is why I am in great shape, why I still train Muay Thai every week, and why I take my kids to the playground every single day. It is why I my wife and I can fly to Europe or Asia, or head back home to Philly to see my parents, or go camping with the family whenever I want.
This is why I have money automatically depositing into my bank account every month without me even looking at it.
I’m not a business guru or some kind of entrepreneurial genius. I’m a simple guy who developed a simple process and stuck with it.
It worked for me, it will work for you.
Love you guys. Talk to you next week.
Tim
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