Follow your passion in business, but if your passion doesn’t work as a profitable business, that passion, that dream, will soon turn into a nightmare.
This isn’t the first time we’ve talked about following your passion; we even gave 5 tips for turning your passion into a business. But… what about profitability? What lies hidden behind those stories of people who leave six-figure salaries to chase their dreams and end up happy?
In her book How to Be a Financial Grownup, Bobbi Rebell tells the story of a man who was passionate about fishing:
“Since sixth grade I had planned to start my own business making custom fishing lures. This was before Amazon, eBay or any online sales platform existed. I researched all the costs for my little company, the cost of the classified ads where I would have to advertise to sell, and the investment in advertising.
In the end, I realised that the start-up costs and the number of lures I would have to sell to recoup my investment were too high. Instead, I became a football referee to make money.”
Clearly, promoting and selling a product for fishing enthusiasts today requires far less investment, and you can reach a much wider audience in less time. Of course, your competition has it just as easy. It might not be a profitable business today either, unless it were a complementary product alongside many other products from our company.
The lesson this businessman leaves us is that the most incredible companies are usually started by entrepreneurs who relentlessly pursue their passion, but for passion to work you need an ambitious business plan, one that sometimes tells you to set that passion aside.
When we looked at what the perfect business for us might be, we gave a few simple guidelines:
- Do what you love.
- Be good at what you do.
- People need it.
- You get paid for it.
Unfortunately, the market won’t always pay you for what you consider your passion, your skill or your hobby. It simply might not be the career, job or business that helps you meet your goals, because if you start a company and don’t achieve financial success (or financial stability), you simply have a very expensive hobby.
I once gave this example: if your passion is fashion, being a successful designer is not the same as owning Inditex or working as a sales assistant at Zara.
Being a sales assistant at Zara is easier than being Amancio Ortega and building the Inditex group, but Amancio Ortega has more financial freedom than the sales assistant. I’m sure that in his early days Amancio Ortega’s passion was fashion and design, but it’s been a long time since he devoted himself to his passion; he devotes himself to business.
The myth
Many people feel inspired by those stories in which a Wall Street millionaire gives up his huge salary at an investment bank to pursue his passion and bake cakes at home, or tend his own organic vegetable patch in his garden (a 10,000-square-metre garden, by the way).
The message is clear. You don’t need that much money, or a life full of stress. You’re happier doing what you love. Yeah, right. That person may have spent 10 or 20 years in a stressful, crappy Wall Street job paying a mere 3 million a year. A crappy job, maybe, but a lucrative one. And probably, for that person, finance was once their passion, which is why they ended up on Wall Street.
The point is that this person is going to plant tomatoes and vegetables in the garden, or start a small craft brewery or a home-baked cake business, because they built a financial cushion in that stressful, lucrative job.
That person has the resources, the education, the understanding of the business world, and even the contacts in case they need financing.
Business lesson: sometimes you have to put up with a crappy but lucrative job so you can afford the price of devoting yourself to your passion.
Still, if this person leaves that job to improve their quality of life and avoid stress, the truth is that the moment they start their little cake business, they will most likely have stepped right back into a seven-days-a-week job.
In the end, that small business, that passion, won’t be any less stressful, and it certainly won’t be profitable for a while either.
So where is the key?
Finally, and this is a personal opinion, I think that when we talk about passion, we need to simplify the message. The real question is whether your passion is business or not. Whether your passion is fashion, building houses or baking cakes at home, the moment you consider turning that passion into a business, you’ll go through the same paperwork and face the same problems as everyone else.
Starting a business means that at first you’ll be doing anything except your passion (admin, paperwork, payroll and so on), and if, with a bit of luck, your company is very successful, your passion will become managing your company’s success and growing the business, not personally baking the cakes.
Ultimately, if your passion isn’t profitable, it automatically becomes a hobby you’ll have to pursue outside working hours. If, on the other hand, your passion does turn out to be profitable, it won’t be long before you’re doing other things that have nothing to do with it. If your passion is business, however, whether you sell houses, cars or socks, you’ll enjoy doing business.
See also: How to make a million a year in business, according to people who have done it
Featured image: Carol M. Highsmith, Public domain, via Wikimedia Commons.
