'Earning passive income is the worst motivation for starting a business'

Madeline Pendleton is a 35-year-old business owner who has been nicknamed "GenZ's aunt". She is the CEO of LA-based fashion shop, Tunnel Vision, and went viral for revealing that she pays her workers and herself the same salary. According to Pendleton, each worker takes home Shs271 million annually (Shs18.2 million per month). This is a far cry from what CEOs make or do because, in 2021, the average CEO made 254 times as much money as the average worker.

The fashion influencer says she is a socialist which influences the way she operates her business. This has caught many people's attention and attracted questions about how to start a business with a small amount of money.

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According to Pendleton, getting funding for a business in the beginning stages taught her the value of putting in the effort.

"Lots of people who start businesses nowadays do it because they want to be fabulously wealthy. They want passive income, right? They want to be the next Jeff Bezos. And what that means is they try to start these companies with a lot of money upfront so they can avoid doing any of the hard work themselves," she says in a recent reply to the question of humble beginnings.

"For example, if you want to own a restaurant, you're going to take out a bunch of money in loans, maybe in your personal name, maybe put a second mortgage on your house so that you can rent a spot, open a restaurant, hire a chef, hire everybody to do all the work for you. And then you just kind of oversee everything, right? That would be how we think of these rich dudes starting a business because they're trying to make money off of it. They don't actually have the passion to do the work."

She says that having less money is a blessing in disguise which drives you to rely on your innate and accessible resource. She adds that this should not be seen as a life sentence since later on the business becomes less reliant on you to stay afloat.

"And this is the thing I think about all the time. So many people want to be something, but they don't want to do the thing. Like for me, I'm an apparel designer, so many people want to be a fashion designer, but very few people want to make patterns and make clothing.

Which now I'm at a stage 15 years later where I don't have to do that anymore, right. But when I started out, I definitely was making my own patterns and making everything myself.

So one of the benefits, I think with being the type of person who's going to start a business without a major investment just with you, with the change you have in your pocket, and with the things you can do with your hands and brain is that you are going to be risking a lot less."

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"You don't have to be a major investor in your own business. I started my business with $200. Mostly it was to file the paperwork with the government and get my website up and going. And also you are going to grow at a natural scale that makes the most sense for you.

You are going to make mistakes when you start a business, everybody will, and you are going to make them when the stakes are a lot lower. I made so many mistakes when I was starting my business and those mistakes would have been catastrophic if I had to support an entire staff.

At the time, I was going through my own learning pains, right, trying to figure out how to do this."

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"Now, my general business tips are this the most important thing is consistency. I always say it's better to be consistent than cute. Once a month, whatever you're doing in the world, do it consistently.

Even if you are not proud of the output necessarily, even if you don't think it's your best work, it's never going to be your best work, it's never going to live up to your own expectations, but you just got to keep on trucking. That's how you get better."

"Number two, learn how to get good at social media marketing. Unfortunately, now we're at this point in weird late capitalism where it doesn't matter how good you are at anything, it matters how good you are at talking about the thing. Really, really frustrating. Being my least favourite part of my job, I just want to design my clothes and go, but no, now you got to talk about it all on social media all the time.

And for that, what you're going to want to do for your social media marketing is really lean into the things that are working, which sounds like common sense, but for a lot of people, it's not. Test a lot of things when you're starting out.

And if you're like, hey, weird, that video got a lot of traction, or that Instagram post got a lot of likes, just do a bunch more of that, all right? It's all algorithm based and the more people favour something, the more heightened it's going to be on the algorithm, the more traction you're going to get. It's not going to be creatively, fulfilling, but guess what? Marketing seldom is, all right? And it's marketing."

"The third thing I recommend is keeping things small, keeping things what you can manage. Start where you are, use what you have. Don't feel pressured to take out small business loans, don't feel pressured to grow the company.

And growing the business for the sake of growing the business doesn't really help you much. Now don't get me wrong, I am happy the business is the size it is now because people I care about can also have good jobs. It's a good job, but it's a lot more stressful and it's harder. So don't glorify growth."

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"And the last thing I can recommend is if the business fails, don't stress on it too much. A business failure wasn't the end of the world. A current business I run might fail. Businesses tend to do that. It's been around eleven years, so, so far we're beating the odds. But you know what I mean.

Don't get personally attached to the business. Otherwise, if your business starts to tumble, your mental health will tumble as well. Just remember that failure is a thing that could happen and you got to just feel okay about that."