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

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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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Johnny boy

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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 :rofl:

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

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We're all gonna steal his business :rofl:

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.
 

SPM_ENT

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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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SPM_ENT

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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...

1638421656217.png


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

I followed the science; all I found was money.
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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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SPM_ENT

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Ended Q3 Strong.

July: $157,510
Aug: $233,897
Sept: $247,339 (Largest Month To Date)

YTD: $1,450,070

On track to hit the 2022 $2,000,000 goal if not more.

Employees: 8

Updates:

I've implemented the GGOB bonus structure to incentivize the employees and show that we all win together. The more we profit the larger the employee's bonus will be. When I originally set it up our main goal was Cash Collected and profit percentage. I thought it was pretty clever in the way I laid it out but I was very wrong. Absolutely no one in the company understood it so it was back to the drawing board for me. In my experience, people understand numbers rather than percentages so I've changed the company's goal to a profit Number. For example: in Oct we want to hit $49,000 in profit. We'll have to wait and see if I get more blank stares in our monthly team meeting to know if the new idea will work. Overall though I love the idea of open book management and it keeps everyone accountable for their own department. In my past businesses, I've kept the numbers real close to the vest but this way is a big weight off my shoulders. It also makes it extremely easy to see where we need to improve and also to celebrate where we are doing well.

As I said I haven't gotten full buy-in from the employees but I know I'm on the right track. It's just a matter of improving the structure to make it easier to understand until I get everyone onboard.

Sales:

My longest-standing sales guy is finally breaking through and landed some medium size clients which lead to a big month. He's starting to come up with creative solutions for potential clients and it seems he could be very close to doubling his sales by the end of the year. We're b2b so the relationships do take time and sometimes it's just being there long enough for the competition to mess up.

My newest sales guy had some personal issues so due to the fires. He still hit his sales goal but it's mostly from legacy clients we've had and I will need him to bring in new clients moving towards the end of the year.

Expansion:

I'm having my marketing assistant start to do outreach in a new territory. We filmed two intro videos explaining our services and asking potential clients to take a minute to consult with us. It's more about asking for advice and not a sales pitch. My assistant is female so we're split-testing the videos to see which video gets a better response. The overall goal is to really get our online outreach/marketing locked in before we get the Application in place and scale nationwide. Also if we can expand into a new territory before even hiring a boots-on-the-ground sales rep, when they do come on they should be able to hit the ground running.

SAAS: I've identified and plan to hire a part-time CTO to manage the buildout of our own proprietary APP and CRM. Once it is built we should be able to scale nationwide at a pace that far exceeds what we're doing now.

It's taken me about 10 years of learning, and a lot of action faking but I'm finally starting to feel like I have a real FASTLANE business.

Updated my office a bit and hung some portraits for when I'm looking for inspiration. #vibing

unnamed.jpg

Best of luck to everyone in Q4.
 

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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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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.
 
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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.
 

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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.
 

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2022 Q2 Update:

April: $184,000
May: $120,000
June: $168,905

Total Q2: $474,147

Up $100k from Q1, which is good but I'll need to bring in 1,140,000 over the next two quarters to hit 2m. Possible but I will need to bring on another salesperson. I plan to hire that salesperson to start Q4. Until I bring them on I'm going to do outreach myself to start to develop the new area. After that, 2023's plan is in place and the goal is set at 5m.

Upgrades:

Added another employee for scheduling and most importantly hired the part-time COO to help/train my partner with operations. He's going to make sure we have the right people in the right places then move towards improving the process and creating a road map for who we need to hire and when as we scale in revenue.

On the mental side, this quarter was a bit overwhelming based on solving issues on the operations side which took a ton of my time in addition to interviewing and hiring the COO. On top of analysis, 1.5hrs in the gym/day, building my classic car, learning guitar, friends/family, and planning a wedding in Oct in Mexico, it's a lot for me. I tend to not take enough personal time when things like this happen which leads to burnout. Hard to do everything I want to do and I'm considering that I need to say "no" to some of the things I'm doing. When all that happens doubt creeps in and it becomes more and more about the numbers that I'm not bringing in and less about the enjoyment of what I'm building. I took a day to be by myself to watch the F1 race, have some coffee, and relax. Not "having" to do anything led me to get everything done in a few hours that I haven't had time to do in a month. I'm starting to get back on track now and hopefully have solved operational issues so that I can focus on scaling from now on while continuing to give myself enough time to do nothing to recharge. Anyway, hope that's helpful for someone else who might be going through the same thing.

Best to everyone in Q3!
 

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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.
 

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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?
 

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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...

1642531704911.png
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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SPM_ENT

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Quick update:

I spoke with one of my regular consultants about the sales territories and my next steps but once I talked it out with him we determined that I need to first, focus on hiring another AR person to help with cash flow. Our quick ratio dropped to about .30 last month, which isn't great but once I find someone that should take care of itself in about 30-60 days. The cash flow isn't too big of an issue as my partner and I have cash easily accessible to cover bills if necessary. Also when I set up the bank accounts I made sure to get plenty of credit on cards and a business line of credit so we'll be able to weather the storm.

Sales Update:
After watching some videos on youtube from Alex Hormozi (I've seen his name pop up in a few other threads lately) I decided to start reviewing my sales guy's phone calls (It's easy for them to record using Openphone). IT WAS SHOCKING how bad they were. I trained them for 2 weeks when they were hired reviewing and role-playing and thought they had things on lock. Well, months later it's quite clear that they don't #chringe. I can't believe we've had as much success as we've had with calls like that. It was a bit of a letdown when I was feeling pretty proud of what our company was representing. Anyway, we're now going to review them once a week like pro sports teams do when reviewing film. I also plan on making some calls myself and record them so they can see I how I would do it and also see that I make mistakes as well. Hopefully, this will get them to loosen up.

Vendors:
I should have done this from the beginning but I complied all of my vendor's pricing and put it on a spreadsheet to compare X vendor to Y and found that certain vendors were much more profitable for different jobs. It's embarrassing to say but I found at least 14% more profit by switching to a certain vendor for our most popular service. Now in some cases, we get what we pay for and the most expensive vendor is the most reliable but I plan on sitting down with them, to be honest, and see if they can help us at all with the pricing. I also plan on sitting down with the cheaper vendor to see if they can improve their service to be what we want in trade for using them more often.

Marketing:
After reading some of @IceCreamKid 's old threads about marketing, I'm rethinking our current messaging. Those threads are so $$ and I'm super thankful to have found them.
 

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July was a bit slower we hit $154k in sales. Last year Aug was our biggest month so we'll see if history repeats this year.

I've been thinking that our business is too old school and I can't scale as fast as I'd like because it's such a relationship sale to get started. That's why I need the in-person salespeople. Currently, It's not something I can advertise for using ads and email but if I had an actual product that would help the clients and it integrated with our service that would be the ticket. The problem is there is so much data that we need to collect for each new job. This adds work for our clients as well as our team inputting the new jobs. My first idea had our clients inputting the data instead of just screenshotting the info for their orders like they do now, which is way more work for them and just wouldn't be adopted. I want our service to be 1 - 3 clicks to submit an order, it needs to be that simple like with Amazon or Uber. So that lead me to an integrated app for our clients. Basically, all of our clients need to get Work Authorizations from their customers to move forward with their services and these Authorizations have all the information we need. If I can develop an app like adobe sign or DocuSign and then add integration to our CRM it could automatically input data into our system and make the new job orders 1-3 additional clicks for our clients to submit.

I have no idea how to make this app but hopefully, someone has some info on where I can look? Maybe even white label something and hire someone who can add the features/integrations I need. Any help is appreciated!


Also, I got a personal office that I'm pretty excited about. I was working at home and getting distracted too often. It's only been a few days but I have a lot more focus now.

unnamed.jpg
 
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MJ DeMarco

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

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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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Guest-5ty5s4

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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!!
 

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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?
 
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We took 100k each and left 100k in the business. Leaving money in the business to make it grow faster is a function of the goals of the company, which is up to me at this point. You're thinking makes sense when related to the title of this thread but my position has changed since last year. Also, it depends on what you do with it and additionally how much time I have to implement it. The only investments we will be making will be to hire new sales and then the additional staff it will take to support them. Hiring a new salesperson costs about 5k/month and it takes anywhere from 1- 3 months to figure out if they are going to make it or not. If not, we start the process all over again and hire someone new. There is only 1 of me to train the new salespeople at this point and it takes two weeks at a time to get them up to speed. So even if I used all 100k we kept in the business I wouldn't be able to hire (more, I wouldn't want to) hire 6 new sales guys and train them simultaneously. Growing too fast can also cause a ton of issues so I'm okay with the pace we are growing. I'll be happy with a 150% increase for this year following 400% (or so) from last year while working around 20hrs a week. Mainly, I enjoy how my life is set up now and if I'm always working what's the point of having the money anyway, my real goal is freedom and I have that most days.

The plan as of now is to create the budgets for next year and then scale. I'm still determining how long it should take for a salesman to bring in 1m and then how much support operationally does that require. I know my AR collects at a rate of $1,300/hr so if we need to collect 150k in a month I will need 115hrs worked for the AR department. I'm also still working out other positions in the company as it grows so lots of planning still taking place before I step on the gas more aggressively.

I don't mind my ideas being challenged so tell me, what would you do differently?
This makes perfect sense. Thanks for not taking it harshly. I wasn't clear on the numbers - I thought you each paid yourselves 150k and left nothing in the biz.

Since I don't know what y'all do, it's hard to say what I would do. But having money in your business bank account is important for safety and for growth. I would invest in equipment, marketing, or training like you mentioned. Or just build the balance - you never know what new opportunities may come up for the business. And there are plenty of businesses with lots of cash just sitting, ready to deploy - it's a "call option on opportunity," as Munger puts it.

Either way you are killing it man and I hope I didn't make it sound like anything else :)
 

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This makes perfect sense. Thanks for not taking it harshly. I wasn't clear on the numbers - I thought you each paid yourselves 150k and left nothing in the biz.

Since I don't know what y'all do, it's hard to say what I would do. But having money in your business bank account is important for safety and for growth. I would invest in equipment, marketing, or training like you mentioned. Or just build the balance - you never know what new opportunities may come up for the business. And there are plenty of businesses with lots of cash just sitting, ready to deploy - it's a "call option on opportunity," as Munger puts it.

Either way you are killing it man and I hope I didn't make it sound like anything else :)
Oh ya not at all, I know text can come off a million different ways so no worries, I appreciate your questions to make things more clear on here.

I agree not knowing what we do doesn't provide much of a picture, I can say that we are a service-based b2b company. I know shat's still vague and I'm a bit frustrated that I don't feel comfortable sharing more. One day I will.

Safety and growth are both very important. The "Quick Ratio" is going to be one of our company-wide goals next year. The more money we can hold the more every employee's job is secure and additionally, the more we can invest in growth. I will probably only get the employees to care about growth once I offer non-voting stock but I'm still doing my own research on how to do that.

Right on man thanks!
 

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April 2022 Update...

I've reached a point where I believe my time is best spent growing the company and training/helping salespeople and getting away from the administration side of things. Such as payroll, accounting review, and all the other little tiny projects that get in my way of bringing in more rev. My partner has been taking care of the operations, mainly working on scheduling all the jobs but moving forward we're going to hire a coordinator full-time on a salary of about 52k + bonus a year. It is my hope that this will clear him up to work at a higher level in the business and to take more of the extra things off my plate.

Cash flow has much improved with the addition of another AR girl. The amount collected per hour worked has gone down but the total amount collected per month is way up. On average it was $1,200/hr worked but now with the additional employee, it has dropped to $700/hr. I'm having the AR department meet to see what they can do to become more efficient and/or what they can do to bring the average back up. We have about 70k in our OPEX account after bills are paid. <--- Amazing and thanks to the Profit 1st model. Our goal is about 300k in the account to have around 4 months of an expenses cushion.

Sales:
My SD guy is leaving next month and I'm still looking for the right person to take his place. LA guy is going strong. I've been watching a lot of Alex Hermozi's youtube videos and find them extremely helpful. It's mostly what I already know but he has a way of making it very clear and providing the correct reminders I need. For my sales guys, I always knew I needed them to "help" the customer but couldn't quite put it into words and hold them accountable. I made some changes from the reports my sales guys work off of and made it more of a priority for them to find out if the target they are calling would actually benefit from our services. The red columns are now my sales guys' first objective to find out when first reaching out to a potential client. I have noticed that in our sales meetings when we review calls my guys have made, at times they just rush to tell the client about us. Instead, I want them to focus on learning more about the client asking questions being curious about them, and most importantly making it fun. There's nothing worse than an annoying sales call. It's my hope that having the most important items right in front of their face will force them to be more focused on the potential client rather than spouting out what they need to say.

1649094061190.png

Sales YTD:

Jan: $135,379 (20% Profit)
Feb: $115,87 (25% Profit)
March: $132,375 (28% Profit) <--- Negotiated with vendors for better pricing playing one off the other. However, the vendor that brought better pricing didn't bring the best service so we're going to do a blend of vendors to accomplish slightly more profit. Being too greedy will cause issues for our service.

It was nice to be able to go back and see that last year's sales also dipped in Feb. Although last year it was only a 3% dip it was still helpful to review and not be too concerned.

Marketing
Lastly, I'm still working with the marketing department to deliver a more clear message of what the clients get when they use our services. Like I mentioned above from the ice cream kid, about the dollar shave club. "For $1 a month, we send high-quality razors to your door"

Overall mostly positives, losing my SD guy was a kick in the nuts because I invested so much time in training him and wanted to expand to SF. Now I need to retrain SD before I can expand elsewhere. Its probably best that I make sure I spend enough time with each sales guy to make sure they are making enough money to keep them happy and motivated otherwise I will have to deal with more turnover.

Best wishes to everyone in Q2!
 

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Just wanted to say man, your story's inspiring. I'm 25 years old and to see you started getting the ball rolling at 26 makes me feel like I'm not too late. Keep at it!
 
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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.

So, here's the problem. I *really* like your story and laying everything out. Well done. I even believe you.

However, without any context of the industry, service, product, R&D - anything, it's impossible to really follow what you're doing. The numbers are MEANINGLESS without having benchmarks to put them against. Maybe you're the world's best blue jean manufacturer, maybe you're the world's worst violin maker. There's absolutely no way of telling from your story.

Without that, you might as well leave out every number since it would be easier to read and a lot faster to type.
 

Tiago

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

Kid

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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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Balkins

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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.
 

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