3 Businesses & The Road to $1M in Personal Income

[SPM_ENT]

Today Is my birthday and it usually forces me to reflect and look back at where I am in life. Business/entrepreneurship has been a huge constant and I wanted to keep a chronicle of my journey and Latest Business (#3) in hopes that I can help people along the way as well as be able to look back and see how far I have come. My current goal is 1m personal income annualy.

The journey really starts 9 years before this post when I opened Business #1.

Business #1:
Gross: $600k
Profit: 25%
Employees: 5
Years Owned: 6

I was 26 and had no real vision in my life other than drinking in bars and picking up women. It was a lot of fun and provided instant gratification however I wasn't building any wealth and I couldn't continue on that path forever waiting for something to magically happen in my life. I started working for a guy and bringing in business for commission. I did that for about 6 months while learning the business. Eventually, I didn't agree with his business practices and decided to open my own shop. I had 9k to my name and put 6k down on a lease. In my first month, I had to sink or swim and it forced me to do whatever it took to survive. Over the next 6 years, I built the company up to 600k in annual gross revenue at a 25% profit margin. I had 5 employees, 150 5 star reviews on Yelp (which was a good amount back then), and the company required only a few hours a day of attention.

Before I closed business #1 I had started my second business or Business #2 with a friend of mine. It was in a different industry but everything I learned from business #1 could be applied to business #2 and my new partner already had a decade of experience. Business #2 quickly grew and we did 1m in gross revenue in our first year. At this point, we were making good money and Business #2 was much more scaleable than business #1. The landlord for business #1 was forcing me out of my location and it was extremely difficult to find a new location so I decided to close /sell the assets for Business #1 and put all my focus on Business #2 and scale.

Business #2
Gross: $2m
Profit: 14%
Employees: 8
Years Owned: 4

Business #2 and my partner taught me so many hard lessons. Mainly in cash flow, trust, communication, and knowing your craft. I will try to make this as short as possible. My partner constantly wanted to take out more money than we were making. We got into debt because of cashflow and put us in a bad situation that left us waiting on a miracle. Fortunately, we ended up getting a miracle and we survived but it was too much for me to take and not repeatable. After that I found him taking money for his own projects out of our bank accounts. I bought him out of his share of the company and took on the business myself. I did that for 3 months which was the worst of my life. Our overhead was 130k a month (which was mentally crushing me) and when my partners left we had 13k in the bank. I grew the company back to 160k in the bank account but I didn't have enough industry-specific knowledge to run the company efficiently myself. I had made the most money in my life so far at the point and was completely miserable with stress and anxiety. I'm talking about rushing out of the office at 5pm holding back tears because all the pressure was so intolerable for me. After a certain point, I had enough and realized that I didn't have to do this. There was no reason other than my own mental state that was forcing me to continue. No amount of money was worth the mental pain I was in and I'd rather make 5k a month doing something I love than 30k a month hating my life. I called my old partner up and he ended up buying the company from me. An understatement when I say it was a HUGE RELIEF.

Business #3
Gross: TBA
Profit: 41%
Employees: 2
Years Owned: 1

Business #3. Another friend of mine and I started Business #3 to coexist and get referrals from Business #2. It did about 100k annually just on the referrals from Business #2. Unfortunately, we lost all the business referrals from Business #2 when I sold it. It didn't matter because I decided that I could do Business #3 completely differently. My friend/partner handles the day-to-day (which was usually my responsibility) and I was free to do sales, grow the company, and use my experience to set systems and automation in place. Enjoying my newfound freedom I started working on business #3 part-time in March of 2020. I would do the cold calls/outreach myself about 2-3 days a week. Our clients were other businesses exactly like Business #2 so I knew their pain points and what they were looking for. Everyone I reached out to really like my background and I got a few big accounts pretty quickly. In March 2020 the company was doing 7-8k a month. By August we hit 27k cash income and in Dec hit 39k. In 2020 we grew 130%. In Jan we hit $59k gross and were operating at a 41% profit. I recently hired my first part-time sales assistant. He works 2 hours a day and handles my outreach and books me meetings. He is reaching double the amount of leads I was when I started and we're getting a lot of traction. At the moment I'm going through a rebranding to really hit home with our target clients. With the new rebranding and more meetings, it's my goal to him 1m in gross revenue in 2021. This new business is extremely scalable and provides me the freedom that I desire.

I wouldn't have gotten to this place without going through the difficult last 9 years. I made huge mistakes when jumping at shiny objects and jumping into business with the wrong people doing the wrong business models. Hard lessons that I narrowly escaped. I have plenty left to learn, especially with marking and sales, email marketing etc and I know I'll make a ton more mistakes but I'm very excited for the future. All of these lessons have made it so much easier the third time around and should enable rapid growth.

Thank you to everyone for the help along the way and I'll keep updating this month or so if it's interesting for you guys to follow the growth. I'm happy to answer any questions or help anyone I can.

 

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[Tiago]

Great to see how every experience you've had builds up for the next one. Curious to see how this unfolds!

 

[Guest-5ty5s4]

This is shaping up to be a great story, just needs more details.

 

[Kid]

Is there anything else to say than "keep going" ?
Nice to hear that you are on better path. 1m personal income is good goal.

P.S Late happy b.

 

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[MJ DeMarco]

Great story, almost missed this, please don't forget to update! Congrats on early successes!

 

[SPM_ENT]

This is shaping up to be a great story, just needs more details.

Ya, I've seen some other posts recommending not to give too much away about your business models. #3 is new so I'm even more cautious. Happy to answer questions if I can to clear things up though.

Is there anything else to say than "keep going" ?
Nice to hear that you are on better path. 1m personal income is good goal.

P.S Late happy b.

Totally, one thing leads to the next and the experience is worth every unrealized penny.

Thank you!

Great story, almost missed this, please don't forget to update! Congrats on early successes!

Thank you! I'm going to try to update monthly to keep things to date and interesting.

 

[SPM_ENT]

End of Feb 2021 update:

This is a bit tricky. I was running the accounting on a cash basis but with this business model, I will switch it to accrual. I haven't done so yet.

Business #3
FEB Gross: $66,952 (Accrual) on a (Cash) basis it was actually $33,000 at 12% profit (Reasons why listed below)
Profit: 59%
Employees: 1 (down 1 from last month)

Pros:
Lots of interest and meetings coming up for new clients. My outreach assistant is killing it with our new strategy of a soft opening. Early on we were just doing a type of HEY!! USE MY SERVICES!! I quickly changed tactics after I was bombarded on LinkedIn by messages of SBA funding and other services. The messages I was receiving were such a turn-off and so archaic it's hard to describe the feeling. I was repulsed by the mix of gluttony, desperation, and just a general lack of any sort of intelligence. I'm so thankful for those annoying people for sending me those messages because I was one of them!

Things to work on:
My partner in this company has virtually zero experience in owning a business. The relationship between him and I will be my biggest hurdle of the entire thing. However, I can trust him completely to take care of the business which is something I've never had before and worth its weight in gold! It's a strange situation, he is me from 10 years ago. Asking the same questions, harboring resentment as I did (I'm guessing) about things that don't matter, worrying about not losing instead of winning. The most difficult thing for me is having the answer to the situation and not shoving it down his throat in a way that makes him feel dumb for his ideas. I've tried to include him by asking what he thought before I gave an answer but that only lead to him thinking I was testing him. Admittedly this is a "me issue" passed down from my father who made me feel less intellegent if I didn't always have the right answer or do the right thing. It's a terrible way to live and there is no room for error. There's also no room to experiment and grow and learn from mistakes. Before I get too far into my own psychological make up this quote really hit him. "I've learned there is no such thing as a business problem. There are only personal problems that effect your business" Damn that's so good!

Here's a link to the thread, it's a great read.
(NOTABLE! - Business is easy and it affects forum participation from heavy hitters. )

The actual problem was that he gave an employee under his management too much freedom to come and go as they pleased. No goals or targets were set. The employee did really well the first month. February was her second month and she barely showed up (Keep in mind this is a remote position, part-time). In Jan we received around 60k in (cash), but in Feb we brought in only 33k (cash). Hard to pay your bills when you take in less than 50% of what you bill for. I warned him about all of the things that would happen with this employee and how it would unfold and it played out just how I said it would. I believe the problem is the way I went about the problem. I had the answer but couldn't deliver it in a way in which it could be heard and understood by my partner. I also take pride when I'm right in a way that feels revengeful. All things for me to work on.

We're replacing the employee with a new person who will have guidelines and goals and accountability. I'm going to be taking lead on interviews and training the new employee while my partner watches. Hopefully, he can see what I do and try to do the same moving forward. I don't know if that will work out but we're going to find out. Gotta keep trying.

Anyway if this is more than you guys are interested in knowing or want to know different things that are going on feel free to let me know. I feel that the above quote is spot on for me so I wanted to share my personal problems I'm working on. Overall the business is doing really well and continuing to grow fast.

Currently reading: The great game of business. I hope to implement the ideas in the book to make a game for everyone to play together and win. So far it's a great read.

Other: I got a racing Sim (as a present for my birthday) and there is a reason I didn't buy it for myself. It's so much damn fun!

 

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[Johnny boy]

you can't even say what type of businesses you ran when they are closed now?

 

[Guest-5ty5s4]

you can't even say what type of businesses you ran when they are closed now?

Yeah this was the reason for my comment asking for more details. Not even an industry for the past businesses?

 

[Johnny boy]

Yeah this was the reason for my comment asking for more details. Not even an industry for the past businesses?

We're all gonna steal his business

I hate that shit. I'll tell all of you guys every single move I'm making because

1. I want to be the helpful guy that I DIDN'T have as a mentor. I had a 9-5 dad, shit teachers and a library card. I want to be the guy that outlines all of his businesses for everyone to see.
2. There's plenty to go around.
3. I'm the shit. Randy Johnson can tell you a fastball's coming and you're still going to miss. If you think telling internet strangers what business you're in is going to bankrupt you, you have NO confidence.

With that said, you have the right to privacy and it's your life, live it how you want. But what's the point of posting on here anyways then? Offer some value. We're on this site to improve our businesses and vague stories about "I made $xxx,xxx and here's what my feelings were during that time" does very little.

 

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[SPM_ENT]

We're all gonna steal his business

I hate that shit. I'll tell all of you guys every single move I'm making because

1. I want to be the helpful guy that I DIDN'T have as a mentor. I had a 9-5 dad, shit teachers and a library card. I want to be the guy that outlines all of his businesses for everyone to see.
2. There's plenty to go around.
3. I'm the shit. Randy Johnson can tell you a fastball's coming and you're still going to miss. If you think telling internet strangers what business you're in is going to bankrupt you, you have NO confidence.

With that said, you have the right to privacy and it's your life, live it how you want. But what's the point of posting on here anyways then? Offer some value. We're on this site to improve our businesses and vague stories about "I made $xxx,xxx and here's what my feelings were during that time" does very little.

I don't think I've seen a more obvious example of someone trying to tear down someone else in order to build themself up.

If I told you I opened a bakery and then sold the bakery in order to open a factory to produce flower to sell to all bakeries in the land, it wouldn't change my story. The story is one of persistence and resilience, of self-reflection and improvement, it's one that shows money doesn't bring happiness. If someone is going through a hard time and reads this maybe they'll know that I got out of a really bad situation into a perfect situation and they can too. There is light at the end of the tunnel if you look for the good in things and find new opportunies using what you have already learned. That nothing you do is a waste as long as you're learning and keep going forward. It's a universal message because business concepts aren't industry-specific. It's the reason so many business books are written that apply across the board.

I'm really tired of the "I'm the shit attitude" and it's a really annoying part of this forum. If people need to come here and spend a ton of their time to prove how "cool" they are they must not be as successful as they say.

 

[Johnny boy]

I don't think I've seen a more obvious example of someone trying to tear down someone else in order to build themself up.

If I told you I opened a bakery and then sold the bakery in order to open a factory to produce flower to sell to all bakeries in the land, it wouldn't change my story. The story is one of persistence and resilience, of self-reflection and improvement, it's one that shows money doesn't bring happiness. If someone is going through a hard time and reads this maybe they'll know that I got out of a really bad situation into a perfect situation and they can too. There is light at the end of the tunnel if you look for the good in things and find new opportunies using what you have already learned. That nothing you do is a waste as long as you're learning and keep going forward. It's a universal message because business concepts aren't industry-specific. It's the reason so many business books are written that apply across the board.

I'm really tired of the "I'm the shit attitude" and it's a really annoying part of this forum. If people need to come here and spend a ton of their time to prove how "cool" they are they must not be as successful as they say.

Emotional cliché's are nice but not much else.

People click on the post to read it because they think "3 businesses? Damn, I could learn a thing or two that will help me in a practical and useful application for my own life".

I didn't call you unsuccessful, yet you want to throw that term back at me and then say "I'm tired of the cocky attitudes on here where people are tearing others down"?

Honestly though I'm just curious, because I see a lot of people on here doing the same thing...

Why do you not mention anything about your business/industry/strategies?

I don't understand it. The only reason I can come up with is that by doing so you are afraid of a potential risk or loss or losing a competitive advantage..is that the case?

 

[SPM_ENT]

MARCH UPDATE:

Business #3 (B2B)
(Accrual Basis) March Gross: $60,880 - Down $7k from last month
Profit: 39% - Down 20%

(Cash Basis) March Gross: $60,250 - Up $27,250
Profit: 42% - Up 30%

Employees: 2 (up 1 from last month)

Pros:
One of the big meetings I had I was able to close. They are sending on average 3 new jobs a week so far. I expect them to bring in around $10k in new business a month. At the first outreach, I talked to their marketing manager online who informed me to stop by the office and meet the field manager. After meeting the field manager in person he recommended I come back to meet the office manager. Their office is located about 2hrs from where I live so I had to talk to three different people before I got to the decision-maker. I spent about 8hrs driving (between two meetings) and spent maybe a total of 10 minutes talking to them in person... totally worth it.

We hired a new accounts receivable part-time employee. Because it was part-time I thought this would be a great position for a mother. Someone who is looking to make extra money after dropping off their kids at school. Also in my experience mothers are good at being responsible and taking care of things and it shows up at work. I created a manual for her to train from and we spent time reviewing each process with her. She's been working for a few weeks now and shows up on time and is doing a great job. Our receivables have never been more steady as you can see from the Cash income above. It’s brought on more expenses but it was to be expected and having cash flow is a main priority. I found her on indeed and we use ADP for time clocks and payroll.

One of my business consultants who I speak with once a month or so recommended that I re-read the E-myth. He also said my partner should read it as well. What a great book and highly recommended for scaling a business. It reminded me of a few things that I needed and provided a solid direction for hiring new employees as we go. The main point being if you build your company like a franchise with every position having a detailed job description and training manual scaling and keeping a unified service offering will be achievable. They use Mcdonald's as an example. People don't go to McDonald's for the best hamburger, they go there because they know exactly what they are going to get, regardless of the location. My partner doesn't have much experience in owning a business and is the “technician” but having him read it brought him closer to what I’m trying to create.

Cons:
With all of the driving to meetings, I will need a new car. My car now isn't great on gas or maintenance and it doesn't look great pulling up in an all-black sports car. It's a con because it's an added cost but if I’m closing new clients it's worth it.

I’ve spent the past month with my branding guy as well as a logo designer I hired on Upwork. I’ve always wanted but could never really accomplish a complete uniform branding presentation. It's been close but the website, business cards, social media, were all slightly off. I was hoping this designer would be the one to tie it all together. His previous designs were very impressive so I chose to pay the $1,900 for him to create a new logo that represented our brand and vision. Now $1,900 may not be a lot to some people but for me, this was a drastic increase in price from the $50-$100 I had been paying on Fiverr. My branding strategist spent hours of time working and explaining our vision doing re-edits and providing more direction. In the end, the designer put less and less effort into it and I had to let him go. Now I’m back to phase one to interview and find a new designer. It is my hope that the unified brand image will create subconscious approval from our clients and justify our superior service offering and price point.

After reading the E-myth my partner realized how big of an undertaking my plan is for expansion and became quite unsure of our arrangement. Currently it's a 51-49 split, but the caveat is that he will be responsible for paying for all employees on the operations side from his partner distributions. I will be responsible for all employees on the Marketing/sales side. I wasn't a huge fan of this deal but it made it feel more “fair” to him. I also liked the idea that if I wanted to hire an employee and do less “grunt work” I can and it would only affect my pay and not my partners. Now that he realizes how many people he will need to hire and pay he doesn't seem too happy, so we will be reviewing our contract. I believe the decision will come to the company paying for employees equally and adjusting the partner distribution split and as a company would normally do.

SIDE NOTE: ALWAYS DO A CONTRACT FOR ANY NEW BUSINESS PARTNERSHIP. It's an agreement for disagreements that can be referenced. I learned this the hard way two times before this. Now that we have this agreement it's very easy to be in my position because he is the one wanting to change it after we agreed. It's on him at this point.

Anyway, that's most of it. In response to “Johnny boy” laughing at someone to try and be cool is never cool. Having said that I do realize that what Johnny was saying does have some truth to it about providing more information and context about the industry. At this point, the idea for the company and its position is very new in my industry and until the company is secure and established in its position I won't be comfortable releasing too much information about it. I understand that makes this thread less useful but it is my hope that in the future I will be able to explain it all to make everything make sense.

Thanks for everyone's support! Back to work for me but if anyone finds any of this helpful and wants me to elaborate more let me know and I’ll do what I can.

 

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[SPM_ENT]

APRIL UPDATE:

Business #3 (B2B)
(Accrual Basis) March Gross: $57,770 - The end of the month fell on the weekend so a few invoices weren't inputted. It should have been $63,000.
Profit: 41.48%

(Cash Basis) March Gross: $66,955 - Largest month yet
Profit: 62%

Employees: 2

Pros:
We now have 11 clients (up from 8) sending us reoccurring jobs. We got another big client which makes up for 25% of our overall income. It's a huge relief because up until now we were heavily reliant on our 1 main client bringing in 75% + of our income. The new clients have dropped our biggest client down to 38% of our income.

One of our biggest competitors got bought out and is dropping the ball. Most of their salespeople are quitting so I'm going to start our push into new territories by hiring salespeople. I have been reviewing the best way to pay them and met with an industry contact to get some more info. In the end, I figured I can pay out a 7% commission and be at the high end of the market for salespeople in my industry. Expansion here we come!

Cons:
My rebranding has taken a lot longer than expected. The first designer I hired to do our logo for $1,900 couldn't deliver on our brand's vision. We're on the higher end of pricing in the market and our branding MUST represent and justify it. I hired a second designer who did a better logo for $100. Still not correct so I'm planning to continue until it's right. I'm now moving forward with a branding expert who has over 16 years of experience in corporate settings and I'm hoping she can be the one. The total cost for logo, messaging, flyer, signatures, social media, marketing materials, web mock-up, etc will be around 5k. The artistic process is hard to predict so my fingers crossed she can do it.

 

[Real Deal Denver]

Before you knock @Johnny boy you should *invest* time to read what he has done.

I have learned volumes from his posts, even though I will never do what he does for business. He can have it all, with my blessings. However, I am fascinated by how he does things. I have been deeply involved in many businesses and I have never encountered anyone running a business as he does.

So, with that said, there's really no reason for you to continue posting business results. That's the reason behind me *not* reading fiction - I just don't care about people and events that are not real. I don't have time for it. It doesn't matter.

I have nothing against posting my business plan and the numbers that go with it. Everyone could benefit from it. I just don't have the time. I have been in a state of flux for several years, and am growing by leaps and bounds. Why is that? It's because I have great people that I work with - and I do a lot of studying - and I apply what I learn. I could do what I do that most people in my line of work do - and I'd get exactly the results they get, which are pretty piss poor, actually.

So I apply other methods, and my results are vastly different. For the better by miles. As much as I'd like to say I do all of that through my own skill and talents - the truth is that I learn it from many sources. Being here is a gold mine of a resource that has paid off in more ways than I can count.

Why am I typing all of this? For one - to let you know you don't have the franchise on success. For two, what you offer in knowledge and advice is - what... little more than bragging rights. And the big one - putting down someone that I admire that has, and does, offer excellent insight and is one of my few role models.

Now you know. Now have at it if you want to flame me too - I thrive on it.

 

[SPM_ENT]

I don't claim to have "the franchise on success" and don't view myself as successful but thank you for the compliment. If you don’t like the thread it's very simple to not view it. In my experience, the crazy/most upset customers provided me invaluable lessons so now I see any criticism as a way to improve so I’ll try to add some more value where I can with my posts. For me, it's always about constantly improving vs my previous self. I also choose not to waste my time getting into bated online agreements. What I do choose to focus on is my business, and speaking of that...

MAY UPDATE

(Accrual Basis) May Gross: $82,889. - Our largest month ever to date.
Profit: 38.12%

(Cash Basis) May Gross: $65,094
Profit: 19.85%

Employees 2

The large month was mainly from 2 existing accounts growing and almost doubling their amount of jobs. I wish I could say it was something I did but one of the clients said his normal provider dropped off and he caught his office manager using someone new. He told me they would now be using my company because he likes using people he knows. What a huge opportunity I could have missed. It really puts an exclamation point on hiring salespeople to maintain the accounts and visit monthly or bi-monthly to make sure they see our faces and we maximize our current accounts.

Phone system: I switched from using google voice to Ring Central in preparation for bringing on new sales reps. I really like google voice but the forwarding systems are limited and with Ring Central is should be easier to keep track of my reps.

For a CRM I’m using Job Nimbus. I like its ability to set automation and it does a pretty good job of keeping everything organized using the board's function so that our scheduling stays on track. I would like more support from them so that I can make sure I’m optimally using the system especially with my sales reps coming on that I need to be able to track their outreach vs calls etc. I may have to move into SalesForce. If anyone has experience with it I’d love to know how it’s worked for you.

Something new that I started with this company is keeping track of and displaying stats for each employee's performance each month. I got most of the idea from “The Great Game of Business” book. The idea is to show everyone everything so that they can see how they directly impact the company. For my AR it has become a game to see how fast they can bring in each invoice. We have dropped steadily each month by a 3-day average. We’re now collecting our invoices in under 30 days which is huge for cash flow.

Accounting/cash flow philosophy: The system I use that works extremely well for me is the “Profit first method.” Basically, you set % for operating expenses, marketing, profit, partner distributions, etc and when the money comes in it gets divided accordingly. I’m happy to say that as of May we are officially current on all of our bills and have a surplus in the operating expense account. It was a slow build to get to this point but pretty exciting. We were also able to obtain this because of our AR performance.

I’m still working on the rebranding of the company. It's a slow artistic process but I’m confident that taking our time to get it right will pay off in the long run.

Most importantly I need to get salespeople going in order to scale. The applicants I have received on my indeed job post haven't been great and there have only been a few but still, I'm procrastinating.

Back to work for me, hope everyone has a productive month!

 

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[SPM_ENT]

JUNE UPDATE

(Accrual Basis) May Gross: $73,460
Profit: 29.02%

(Cash Basis) June Gross: $58,510
Profit: 24.46

Employees 3

Not too much to report last month. Growth has slowed. My outreach guy has got about 20 potential clients who have agreed to work with us but have not actually sent us any jobs. I believe it's because he is only doing sales by phone. Office visits maybe what we're missing to lock them in.

*Anyone with a similar type of experience have any advice on how to get clients over the hurdle?

I have not been able to hire a new salesperson. Applicants are slim to none. My main candidate has tons of experience over decades but that makes me wonder why he doesn't currently have a job. He also has claimed to own a few different businesses over the years. In our interviews, he's mentioned things like people thought he was going to steal their company and then made a joke about it later on. I'm not worried about him stealing the company but that's a weird thing to be sensitive about and then make a joke. I guess we'll see what happens as I'm leaning towards moving forward with him. I'm considering making the initial salary higher for the first 3 months to avoid the fear of survial while a new sales person is building relationships.

The focus over the next few months will be to complete our branding and continue to look for salespeople to grow the company.

Outside of the business, I'm still searching for my second investment property. My 1st purchase has already tripled my down payment in equity while being rented out. Glad to have my money actually working for me instead of sitting in a checking account for comfort.

 

[Balkins]

JUNE UPDATE

(Accrual Basis) May Gross: $73,460
Profit: 29.02%

(Cash Basis) June Gross: $58,510
Profit: 24.46

Employees 3

Not too much to report last month. Growth has slowed. My outreach guy has got about 20 potential clients who have agreed to work with us but have not actually sent us any jobs. I believe it's because he is only doing sales by phone. Office visits maybe what we're missing to lock them in.

*Anyone with a similar type of experience have any advice on how to get clients over the hurdle?

I have not been able to hire a new salesperson. Applicants are slim to none. My main candidate has tons of experience over decades but that makes me wonder why he doesn't currently have a job. He also has claimed to own a few different businesses over the years. In our interviews, he's mentioned things like people thought he was going to steal their company and then made a joke about it later on. I'm not worried about him stealing the company but that's a weird thing to be sensitive about and then make a joke. I guess we'll see what happens as I'm leaning towards moving forward with him. I'm considering making the initial salary higher for the first 3 months to avoid the fear of survial while a new sales person is building relationships.

The focus over the next few months will be to complete our branding and continue to look for salespeople to grow the company.

Outside of the business, I'm still searching for my second investment property. My 1st purchase has already tripled my down payment in equity while being rented out. Glad to have my money actually working for me instead of sitting in a checking account for comfort.

One reason your sales Candidate is not working is...he has money and is weighing opportunities.

AS a sales guy myself, i've learned not to jump on the First offer. ALSO, interviewing is a 2 way process. The company interviews me, but i also 'interview them'....

Why would i want to work with a Start-up company?
-its risky
-tends to have little to no benefits
-Not much to bragg about on my resume (unless i get a piece of the action).
-Politics of small business
-Tends to be less opportunity in Small biz

No offense, but 'why would a Top tier Sales guy want to work for you?' (other than $). Sales ppl first and foremost are motivated by $, next is working for the best company in that field.

 

[SPM_ENT]

One reason your sales Candidate is not working is...he has money and is weighing opportunities.

AS a sales guy myself, i've learned not to jump on the First offer. ALSO, interviewing is a 2 way process. The company interviews me, but i also 'interview them'....

Why would i want to work with a Start-up company?
-its risky
-tends to have little to no benefits
-Not much to bragg about on my resume (unless i get a piece of the action).
-Politics of small business
-Tends to be less opportunity in Small biz

No offense, but 'why would a Top tier Sales guy want to work for you?' (other than $). Sales ppl first and foremost are motivated by $, next is working for the best company in that field.

I believe you are correct that he has some money. I've interviewed him in what appeared to be his home which looked nice in the background.

It makes sense it's a two-way process but he definitely seems very eager to start with us. The current applicant has never worked in our industry and has only worked in one other industry his entire career in which he stopped being a salesman in 2008 when everything crashed and became a truck driver for the next 12 years. Recently he tried to start a business that failed and now he is applying to new positions.

No offense taken, your concerns are legitimate. We are a new company not many people have heard of yet, because of this and the reasons you listed I have priced our commission to earn 20-30% more than the rest of our competition.

My requirements are slim, I'm really looking for someone who eager to learn and motivated to make it work and make money. I can train that person how to sell. It might take some time but like you said it's going to be difficult to find a top-tier sales guy in the beginning.

 

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[inabox1]

One reason your sales Candidate is not working is...he has money and is weighing opportunities.

AS a sales guy myself, i've learned not to jump on the First offer. ALSO, interviewing is a 2 way process. The company interviews me, but i also 'interview them'....

Why would i want to work with a Start-up company?
-its risky
-tends to have little to no benefits
-Not much to bragg about on my resume (unless i get a piece of the action).
-Politics of small business
-Tends to be less opportunity in Small biz

No offense, but 'why would a Top tier Sales guy want to work for you?' (other than $). Sales ppl first and foremost are motivated by $, next is working for the best company in that field.

With that in mind, a higher initial salary (/commission?) for the first 3-6 months of employment doesn't seem like a bad solution to counter those cons?

Taking a guess here, but chances are the position is work from home - I feel like a lot of potential employees would be convinced just on that feature of the job alone.

Feel free to correct me, though

 

[SPM_ENT]

About time I updated this, things got a bit busy so I'll try to do a quick recap. First I think the title is incorrect and my goal is no longer 1m of personal revenue a month, at least it's not my main goal. I want to live a life I can be happy and not be a slave to my business but enjoy the journey. Money is great but I don't want to be unhappy and rich. I want to be rich because I'm happy and enjoy what I'm doing. I'm trying to incorporate that into my company so everyone can enjoy working there and have things to celebrate.

Most notable things that happened in the last 6 months:

New sales guy: I eventually hired a San Diego territory sales rep. He's young and hungry and has a lot of good ideas. He originally wanted to own his own business but it didn't work out for him. It seems like he recognizes the opportunity in our young and growing company and wants to make an impact, which is really great. I'm really happy I waited to find the right guy. I found out after I hired him that he has the same exact birthday as me just 10 years apart. I don't usually read into that but we share a lot of the same mannerisms and he's able to recreate the way I was talking to potential clients and get new business so it may be something I'll have to keep in mind. We trained for 2 weeks straight using Brainscape which is a flashcard program software with grading so I could see how he was progressing. We started with basic industry knowledge, then taught him about our company and how it was created, then moved on to technical knowledge and lastly sales and FAQ. I was really happy with how quickly he grasped everything and how the training program went. I'd recommend the Brainscape app and plan to use it in the future for training. So far he's helped bring in about 13k a month. At 7% commission, he's not meeting his draw yet but when he lands a big client it should help him jump up a bit.

Once this sales guy is making enough to cover his draw I will move on to train the next sales rep in the next territory. From there it's rinse and repeat until we cover the state then expand across the US.

Branding: Our branding and image are completed. I hired a part-time assistant to do social media and keep up with uniforms/business cards/stickers/etc. I usually run a new marketing idea by my copywriter/branding expert (who is freelance $80/hr), he creates the copy and an idea of visuals, from there the graphic designer (also freelance $150/hr) puts it together. It's working great so far and it's nice to have people who do good work available but not on my overhead.

*I put the hourly in case anyone wanted a reference for how much someone would pay these people.

GGOB: Not sure if I mention this before and I'm not feeling motivated to read through my past posts so my apologies if I mention this again. I'm currently reading The Great Game of Business, its a book about open-book management. Showing everyone who works in the company all the numbers (P&L and balance sheet.) The idea is to show them how they impact the company in order to get them more motivated to help make it better for the company and for themselves. Until last week my AR girl was just collecting endlessly without a goal or reason. After reading some of the book, I set a meeting with her and asked if she knew how much money we needed to collect each month and why. She had no idea and it wasn't until that conversation that I thought about what a terrible job that would be, collecting money from people who weren't excited to pay every day for hours with no reasoning. She told me that she was collecting so we could pay bills and she was correct but she had no idea of how much we needed to pay. To make a long story short I got her and the AP girl together and they came up with a google sheet that shows how much our bills would be for each week. It's my hope that this will provide some goals and feelings of accomplishment for my AR girl. Here's our rough draft of the sheet...




Lastly the Numbers

July: $89,352 (13.79% Profit)
Aug: $150,231 (36.26 % Profit)
Sept: $104,295 (25.15 % Profit)
Oct: $95,792 (24.47 % Profit)
Nov: 97,740 (21.01 % Profit)

This year to date we're at $909,183, which is pretty damn exciting considering how little we were bringing in at the beginning of the year. Our goal is to hit 1m by the end of the year.


Final Notes:

I post this here because it's a nice way for me to be able to look back and see that I've actually made progress. Most times I get so caught up in the future it's hard to feel good about what I have done.

I also hope to bring some value and will try to help or answer any questions if anyone has one about anything I'm doing.

If anyone has constructive criticism I'm more than open to it and would love to discuss anything in order to improve myself and my business.

Cheers

 

[MJ DeMarco]

Thank you for the updates and some of the details of your process, like who you are using for call processing (Ring Central) and other details.

It's a shame that someone who is on track to doing $1M this year with a 25% profit margin has a thread that virtually no one is interested in. I apologize for that.

Thank you for sharing brother. Many people here are proud of you. Look forward to hearing more.

 

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[Guest-5ty5s4]

I've loved following this thread. You're doing a great job. Wish we knew more details about the biz but understand that it's private.

Can't wait to see where this goes in 2022!!

 

[Silk Cuba]

Congrats! It's a good idea to post updates and occasionally look back on, to see how far you've come. We can all get lost in the moment.

What is the biggest reason your margins differ so much month to month? Is it more like a direct-cost thing or just general expenses?

 

[SPM_ENT]

Thank you for the updates and some of the details of your process, like who you are using for call processing (Ring Central) and other details.

It's a shame that someone who is on track to doing $1M this year with a 25% profit margin has a thread that virtually no one is interested in. I apologize for that.

Thank you for sharing brother. Many people here are proud of you. Look forward to hearing more.

Honestly, just you saying that means a lot to me. The road can be lonely sometimes but to have positive feedback from the person who wrote a book that helped change my thinking and lead me on a path to a better life is simply amazing. Thank you.

There are a million options on how to run a business but hopefully, someone will find the things I do helpful.

Also, I understand it's not too exciting when I don't go into details about exactly what I'm doing but this is the first time I've actually had a unique service offering so I'm protective of the idea until I get things more established.

Since you mentioned it I switched from Ring Central to Openphone. It's 10x better. Reliable, extremely easy to use, call routing, I can switch over to any of my team's phone numbers in a second to cover for them or monitor how they are doing. Also it's cheaper. I'd highly recommend OpenPhone over Ring Central.

I've loved following this thread. You're doing a great job. Wish we knew more details about the biz but understand that it's private.

Can't wait to see where this goes in 2022!!

Thanks man! Ya I know it's a bummer I don't feel more comfortable sharing, it would enhance the story. Hopefully, once things are a bit larger I can share more and more. Until then I appreciate your support and understanding.

Congrats! It's a good idea to post updates and occasionally look back on, to see how far you've come. We can all get lost in the moment.

What is the biggest reason your margins differ so much month to month? Is it more like a direct-cost thing or just general expenses?

Thank you. Good question, initially when I read it I had an assumption of what I thought the answer was. I was managing my averages over each quarter so I wasn't too worried about 1 month compared to the next. Looking back I don't think that is correct either. I should know the answer and not assume though. Currently, I'm working on reading GGOB and improving setting budgets and goals. It would be very helpful to know things like if we save 2% in "this area" that's 20k in additional income for me and for my employee's bonuses. Little things like that matter. I'm going to spend some more time looking into this and I'll share what I find so thanks again for the question.

I am curious to see if my assumptions will be correct though. Here's what I think at the moment and we'll see if I was close or not when I look it over with my bookkeeper this week.

I believe the swing in profit percentages comes from... the fact that our invoicing towards the end of the month doesn't match up with our vendor bills. As in we get a vendor bill on the 30th but we won't invoice the job until the 1st of the month. Additionally a few of the months I was working heavy on the branding with a consultant and also a designer which cost 5-10k for them and then some additional $ for uniforms and new marketing materials. If I'm doing 100k a month each 1k is 1% so those could account for big swings.

 

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[BD64]

Woah I haven't seen this thred before now. Bookmarked & will dive in when I get a few minutes!

@SPM_ENT Nice work, keep crushing & thanks for posting

 

[Silk Cuba]

Thank you. Good question, initially when I read it I had an assumption of what I thought the answer was. I was managing my averages over each quarter so I wasn't too worried about 1 month compared to the next. Looking back I don't think that is correct either. I should know the answer and not assume though. Currently, I'm working on reading GGOB and improving setting budgets and goals. It would be very helpful to know things like if we save 2% in "this area" that's 20k in additional income for me and for my employee's bonuses. Little things like that matter. I'm going to spend some more time looking into this and I'll share what I find so thanks again for the question.

I am curious to see if my assumptions will be correct though. Here's what I think at the moment and we'll see if I was close or not when I look it over with my bookkeeper this week.

I believe the swing in profit percentages comes from... the fact that our invoicing towards the end of the month doesn't match up with our vendor bills. As in we get a vendor bill on the 30th but we won't invoice the job until the 1st of the month. Additionally a few of the months I was working heavy on the branding with a consultant and also a designer which cost 5-10k for them and then some additional $ for uniforms and new marketing materials. If I'm doing 100k a month each 1k is 1% so those could account for big swings.

Since you mentioned the GGOB book, it made me order it. Maybe it'll be useful to me aswell.

I think business in its early stages always have varying profit margins. Mine was the same. In the early days, some months I used to spend $25k+ and others maybe $4-5k. The net margins would differ quite a bit.

What's still a question to me in general, even for my business, is how are expenses actually counted when bought to be used in the future? I.e. I spend $10k on packaging materials in January, yet the materials are to be used throughout the year. I still would count it as an expense for January but its definitely something I need to learn more about since it doesn't seem very clear to me.

 

[SPM_ENT]

Thought I'd give an update on how 2021 turned out and what I'm working on now.

We pulled it off and had our second largest month ever and brought in over $126k to push us past our goal of 1m.

2021 Accrual Income: $1,023,728. If I take out all the "expenses" my partner and I have the company pay for and remove our "reasonable wages" we actually profited 29.28%

Sales & Marketing:

Originally our LA sales rep was part-time as he had a normal full-time job with benefits. He would do mostly social media outreach for a few hours a day. I had offered him a full-time position but he was hesitant to move away from his current job that was more secure. It was understandable and I was still training my SD guy so I wasn't in a rush at this point even though I wanted him full time. A few key points...
First, I started dividing up territories and showing it to both reps using google maps (I bought a list from Fiverr of all of our target clients and then imported it into a Google Map). I think the visual was very productive because my LA rep saw that my San Diego rep was spreading to more and more territory.
Second, In addition, our LA rep started to get traction with a few clients and was getting repeat business and more confidence that he could make more money with our company.
Third, I started having my QBO send out automatic reports every Monday showcasing the current amount billed by each salesman.
I believe all three of those things compelled my LA rep to quit his normal 9-5 job and take a risk on himself. He asked me if he could come on full time starting in Jan and we were happy to have him do so.

Here's a picture of the report that goes out on Monday. It's a good amount of competition and makes things interesting for them...


I've also included my marketing assistant in this auto report and I'm working out a plan to make her pay based on a small % of all income so she is incentivized to help support more business.

Great Game of Business:
As I've mentioned, I'm working on implementing an open book company where the employees can see their impact on the company and benefit (in the form of bonuses) from helping the company be more profitable. I've spent a lot of time working on figuring out how to do this. So far this is what I have worked out...

I know that we need to have three goals.

1st goal: Income: 2.3m (As projected by our sales guys. If people pick their own targets they are more likely to hit them)
2nd goal: Profitability % (TBD)
3rd goal: Quick Ratio = (The amount of cash on hand vs liabilities) (TBD)

Income is pretty self-explanatory.

For our profitability goal, I've been reviewing all line items from our P&L and making them very clear and easy for everyone to understand. From there I'm dividing them up into three different divisions, Accounting/Admin, Operations, Marketing & Sales. Each division will get an automatic report every Monday (Like I do for the sales guys) and be responsible for maintaining or improving our spending & percentage as compared to the income. If their department can improve our line items percentages that will increase our bottom line profit. Once I set the profit percentage goal, anything above it will be a sliding scale in terms of bonuses. Obviously, not all of the additional profit will go to bonuses but I'd like to be able to give people a chance to earn at least 10% of their annual income in a bonus. We'll have to wait to see how it actually turns out.

Quick Ratio as I understand it, or as it works for us, is our cash on hand vs our liabilities. Right now we're at about .70. If we stopped collecting right now we'd be able to pay about 70% of bills. That's not going to happen as we have a good amount of jobs billed and not collected yet but it gives us a more accurate representation of how secure our company is. This is important for employees because it 1st means job security and second a chance for bonuses. If we don't have money in the accounts we can't pay bonuses and risk not being able to pay regular wages.

Both goals have to be met at some capacity for employees to earn their bonuses. The bonuses will be paid out quarterly but on a sliding scale, as in Q1 is worth 10% of the annual bonus, Q2 20%, and so on.

That's what I have figured out so far as it's a work in progress. I'll update when I can about how it's going.


On a more personal update: I'm in contract with my second rental property in Tennessee. The market there did really well for my first rental property last year. I was so misguided for flipping cars when I should have been buying property. My money is making money hand over fist. A few of my friends have expressed extreme interest in investing with me so I'm considering putting a group together to continue to buy more and more. It's an idea that would need some looking into but I'm not planning on putting too much thought into it at the moment. My business is my primary focus.

I'm working on the company about 3 days a week with occasional meetings on other days. I try to work on my classic car build for another 2-3 days out of the week and 1 day to relax with no agenda. In my position now where my partner runs the daily operations I find that thinking and planning is where my value really comes from. Even when I'm working on my car it's almost like meditation to clear my mind and provide mental space to come up with more improvements for the company. I used to think I needed to work 24/7 but I've been able to accomplish more by living my life this way.

Hope everyone had a good end to 2021 and best wishes for 2022!

 

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[Guest-5ty5s4]

Thought I'd give an update on how 2021 turned out and what I'm working on now.

We pulled it off and had our second largest month ever and brought in over $126k to push us past our goal of 1m.

2021 Accrual Income: $1,023,728. If I take out all the "expenses" my partner and I pay ourselves for through the company and remove our "reasonable wages" we actually profited 29.28%

Sales & Marketing:

Originally our LA sales rep was part-time as he had a normal full-time job with benefits. He would do mostly social media outreach for a few hours a day. I had offered him a full-time position but he was hesitant to move away from his current job that was more secure. It was understandable and I was still training my SD guy so I wasn't in a rush at this point even though I wanted him full time. A few key points...
First, I started dividing up territories and showing it to both reps using google maps (I bought a list from Fiverr of all of our target clients and then imported it into a Google Map). I think the visual was very productive because my LA rep saw that my San Diego rep was spreading to more and more territory.
Second, In addition, our LA rep started to get traction with a few clients and was getting repeat business and more confidence that he could make more money with our company.
Third, I started having my QBO send out automatic reports every Monday showcasing the current amount billed by each salesman.
I believe all three of those things compelled my LA rep to quit his normal 9-5 job and take a risk on himself. He asked me if he could come on full time starting in Jan and we were happy to have him do so.

Here's a picture of the report that goes out on Monday. It's a good amount of competition and makes things interesting for them...

View attachment 41679
I've also included my marketing assistant in this auto report and I'm working out a plan to make her plan based on a small % of all income so she is incentivized to help support more business.

Great Game of Business:
As I've mentioned, I'm working on implementing an open book company where the employees can see their impact on the company and benefit (in the form of bonuses) from helping the company be more profitable. I've spent a lot of time working on figuring out how to do this. So far this is what I have worked out...

I know that we need to have three goals.

1st goal: Income: 2.3m (As projected by our sales guys. If people pick their own targets they are more likely to hit them)
2nd goal: Profitability % (TBD)
3rd goal: Quick Ratio = (The amount of cash on hand vs liabilities) (TBD)

Income is pretty self-explanatory.

For our profitability goal, I've been reviewing all line items from our P&L and making them very clear and easy for everyone to understand. From there I'm dividing them up into three different divisions, Accounting/Admin, Operations, Marketing & Sales. Each division will get an automatic report every Monday (Like I do for the sales guys) and be responsible for maintaining or improving our spending & percentage as compared to the income. If their department can improve our line items percentages that will increase our bottom line profit. Once I set the profit percentage goal, anything above it will be a sliding scale in terms of bonuses. Obviously, not all of the additional profit will go to bonuses but I'd like to be able to give people a chance to earn at least 10% of their annual income in a bonus. We'll have to wait to see how it actually turns out.

Quick Ratio as I understand it, or as it works for us, is our cash on hand vs our liabilities. Right now we're at about .70. If we stopped collecting right now we'd be able to pay about 70% of bills. That's not going to happen as we have a good amount of jobs billed and not collected yet but it gives us a more accurate representation of how secure our company is. This is important for employees because it 1st means job security and second a chance for bonuses. If we don't have money in the accounts we can't pay bonuses and risk not being able to pay regular wages.

Both goals have to be met at some capacity for employees to earn their bonuses. The bonuses will be paid out quarterly but on a sliding scale, as in Q1 is worth 10% of the annual bonus, Q2 20%, and so on.

That's what I have figured out so far as it's a work in progress. I'll update when I can about how it's going.


On a more personal update: I'm in contract with my second rental property in Tennessee. The market there did really well for my first rental property last year. I was so misguided for flipping cars when I should have been buying property. My money is making money hand over fist. A few of my friends have expressed extreme interest in investing with me so I'm considering putting a group together to continue to buy more and more. It's an idea that would need some looking into but I'm not planning on putting too much thought into it at the moment. My business is my primary focus.

I'm working on the company about 3 days a week with occasional meetings on other days. I try to work on my classic car build for another 2-3 days out of the week and 1 day to relax with no agenda. In my position now where my partner runs the daily operations I find that thinking and planning is where my value really comes from. Even when I'm working on my car it's almost like meditation to clear my mind and provide mental space to come up with more improvements for the company. I used to think I needed to work 24/7 but I've been able to accomplish more by living my life this way.

Hope everyone had a good end to 2021 and best wishes for 2022!

Great job!!

With add backs (your salaries, expenses to yourself) I'd imagine your profit may already be close to your goal, right?

You're killing it man!

 

[SPM_ENT]

Great job!!

With add backs (your salaries, expenses to yourself) I'd imagine your profit may already be close to your goal, right?

You're killing it man!

Thank you!

Ya that's what I need to spend some more time doing. My partner and I want to pay for as many things as possible to reduce our taxes but at the same time need a baseline for the employees to shoot for. If we start to take more because we're profiting more it's not really fair for their bonuses. I think we'll need to set our goals for things we want to write off, then find the profit percentage we were able to accomplish last year minus those expenses, then use that percentage as a baseline. There shouldn't be any bonuses for achieving the status quo from last year. The goal is for the employees to be vested to help improve the company and benefit along with the company.

Orrr we can separate our expense items completely in a different chart of accounts on the P&L. However that would be hard using QBO sending the automatic reports showing the profit percentages of the company (it would include the expenses even if they are separated out).