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I'm planning to post here regularly, and rather than introducing my business every time I post a question, I'll chronicle it here and point to this thread.
So here's the summary of where we are today:
Back in 2013-2015, after having worked with B2B sales and marketing and built a small sales team and inbound sales channel for my last employer, I decided that it's time to start my own business.
At first, I thought that I could do it while having a dayjob supporting me. I quickly realized this is unrealistic - building a new product requires full-time, or at least freedom to decide when to work and when to build.
I became a consultant, which meant I at least achieved one milestone: Controlling when to spend my time on "earning" vs. "building". It also exposed me to business opportunities.
And then, I found the opportunity to build my own business, when I discovered a software that allowed me the opportunity to resell it with great margins, in the CRM and Marketing industry, and this became the middle ground that would allow me to launch my entrepreneurial journey.
I found a problem that I thought I could solve: Many businesses need a software like this, but the barriers of entry are too high (cost, complexity). And those who do purchase it very rarely make use of its potential.
I adopted a business model which would allow us to solve this problem: We'll deliver the software and help them implement it successfully without charging high consultancy fees. If delivered successfully, we'd get a steady steam of evergreen, passive profit from the license margins.
This business model would also mean that it would be hard for others to compete once we established our foothold.
It didn't fulfill the CENTS criteria fully, but well enough:
C: Low - I would be dependent on a single vendor since I were to be a value added reseller. On the other hand, this particular vendor's reseller model allowed me to fully set my own prices for the software, and I could ride on their brand which offered a shortcut. My plan here was to establish a foothold, then expand to incorporate more products (or build our own products) to increase Control.
E: Medium - anybody could become a reseller, but there were hurdles to actually becoming a successful one - and once you're somewhat successful, it's not easy for others to overtake your market share.
N: High - the particular problem I was going to address with the quite unique business model in this industry is real and painful. Many businesses need this kind of software, and few know how to utilize them once they get it.
T: Medium - Time-intensive initially, and dependent on human capital, but passive in the long haul once you're "finished" with an implementation and go into "maintenance" mode with each client.
S: Medium - The initial human intensive work required caps the speed of growth, but over the long haul, the passive profit generated from "old" clients can finance additional growth.
Overall, this was the best I could find at the time, and I decided that to jump into the pool and see what happens.
7 years later - here I am!
The business today generates roughly $500K/yr in revenue, of which roughly $300K/yr is gross profit margin. 12 employees. And have reached somewhat of a plateu in our growth and been at standstill for a year roughly (largely imo due to Covid, which scared away a lot of potential buyers in general in the market - I felt a great "reluctance" and our lead flow drastically reduced with no real change made on our side that would have caused it).
I'm still the sole salesperson. But we have built a delivery team that can deliver with good results without needing me, except for our largest and most demanding projects.
The main current bottleneck as I see it today is that the work required is both human intensive and requires experienced humans to execute. So the 2022 goal is to "productize" the business.
To that end, the next goal I'm working on right now is to "productize" the business: Any delivery we do will no longer be custom-tailored for each client, but be pre-defined in a "package" first, with step by step instructions on both what the client will get and how we will deliver it. Then we'll deliver it according to this process.
We'll put all of these packages on a portal called our "Solutions Portal", and list them publicly. This will serve both as inspiration to our clients, and to prospects, and allow us to streamline the delivery and make us less dependent on humans and more standardized.
And my belief is that rather than lower the quality of delivery, it will increase it: Instead of being dependent on individuals to deliver excellently, which happens only if the best people happen to be the ones delivering exactly the type of thing they're good at for a particular client, anybody will be able to deliver anything to every client by going through the solutions listings, and requesting specialized resources responsible for delivering those packages.
See some of my struggles convincing my team of the value of these changes (which I believe I've finally overcome now thanks largely to many of the comments and suggestions in the comments you made) here: Getting employees to follow my vision.
After successfully productizing the business and standardizing how we deliver, I believe I'll be able to scale the business by hiring salespeople that can take a more proactive stance towards selling.
I'm looking forward to your comments and will continue to chronicle the most important developments as we make progress and face new hurdles to overcome!
So here's the summary of where we are today:
Back in 2013-2015, after having worked with B2B sales and marketing and built a small sales team and inbound sales channel for my last employer, I decided that it's time to start my own business.
At first, I thought that I could do it while having a dayjob supporting me. I quickly realized this is unrealistic - building a new product requires full-time, or at least freedom to decide when to work and when to build.
I became a consultant, which meant I at least achieved one milestone: Controlling when to spend my time on "earning" vs. "building". It also exposed me to business opportunities.
And then, I found the opportunity to build my own business, when I discovered a software that allowed me the opportunity to resell it with great margins, in the CRM and Marketing industry, and this became the middle ground that would allow me to launch my entrepreneurial journey.
I found a problem that I thought I could solve: Many businesses need a software like this, but the barriers of entry are too high (cost, complexity). And those who do purchase it very rarely make use of its potential.
I adopted a business model which would allow us to solve this problem: We'll deliver the software and help them implement it successfully without charging high consultancy fees. If delivered successfully, we'd get a steady steam of evergreen, passive profit from the license margins.
This business model would also mean that it would be hard for others to compete once we established our foothold.
It didn't fulfill the CENTS criteria fully, but well enough:
C: Low - I would be dependent on a single vendor since I were to be a value added reseller. On the other hand, this particular vendor's reseller model allowed me to fully set my own prices for the software, and I could ride on their brand which offered a shortcut. My plan here was to establish a foothold, then expand to incorporate more products (or build our own products) to increase Control.
E: Medium - anybody could become a reseller, but there were hurdles to actually becoming a successful one - and once you're somewhat successful, it's not easy for others to overtake your market share.
N: High - the particular problem I was going to address with the quite unique business model in this industry is real and painful. Many businesses need this kind of software, and few know how to utilize them once they get it.
T: Medium - Time-intensive initially, and dependent on human capital, but passive in the long haul once you're "finished" with an implementation and go into "maintenance" mode with each client.
S: Medium - The initial human intensive work required caps the speed of growth, but over the long haul, the passive profit generated from "old" clients can finance additional growth.
Overall, this was the best I could find at the time, and I decided that to jump into the pool and see what happens.
7 years later - here I am!
The business today generates roughly $500K/yr in revenue, of which roughly $300K/yr is gross profit margin. 12 employees. And have reached somewhat of a plateu in our growth and been at standstill for a year roughly (largely imo due to Covid, which scared away a lot of potential buyers in general in the market - I felt a great "reluctance" and our lead flow drastically reduced with no real change made on our side that would have caused it).
I'm still the sole salesperson. But we have built a delivery team that can deliver with good results without needing me, except for our largest and most demanding projects.
The main current bottleneck as I see it today is that the work required is both human intensive and requires experienced humans to execute. So the 2022 goal is to "productize" the business.
To that end, the next goal I'm working on right now is to "productize" the business: Any delivery we do will no longer be custom-tailored for each client, but be pre-defined in a "package" first, with step by step instructions on both what the client will get and how we will deliver it. Then we'll deliver it according to this process.
We'll put all of these packages on a portal called our "Solutions Portal", and list them publicly. This will serve both as inspiration to our clients, and to prospects, and allow us to streamline the delivery and make us less dependent on humans and more standardized.
And my belief is that rather than lower the quality of delivery, it will increase it: Instead of being dependent on individuals to deliver excellently, which happens only if the best people happen to be the ones delivering exactly the type of thing they're good at for a particular client, anybody will be able to deliver anything to every client by going through the solutions listings, and requesting specialized resources responsible for delivering those packages.
See some of my struggles convincing my team of the value of these changes (which I believe I've finally overcome now thanks largely to many of the comments and suggestions in the comments you made) here: Getting employees to follow my vision.
After successfully productizing the business and standardizing how we deliver, I believe I'll be able to scale the business by hiring salespeople that can take a more proactive stance towards selling.
I'm looking forward to your comments and will continue to chronicle the most important developments as we make progress and face new hurdles to overcome!
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