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EXECUTION [Progress Thread] Million+ Revenue by 25

Discussion in 'Progress/Execution Threads' started by 458, Dec 29, 2013.

  1. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Hello everyone. I don't contribute much but I figure I would post this just as a way to keep track of my own progress and help anyone I can along the way.

    Some background information:

    Age: 24
    Male
    College graduate
    Active entrepreneur since age 18

    Intro

    This first thing I will say is that I am in no way any type of expert in any particular field and regard myself as pretty average but with a strong work ethic. I do not believe I am better than anyone else or that what I have accomplished makes me special. If you want to do this, its pretty easy... All you have to do is actually apply yourself and not listen to people that want you to fail.

    Before I get to the details of the partnership I am forming, it is best if you understand how I got here. I basically started a business about 3 years ago in an industry related to my college degree(I can hear the yelling and screaming already). I rented an office, started making money, and basically learned the business while going to school. Fast forward to now and what has happened is what you can never expect but will inevitable occur if you stick it out and work your ass off. Keep in mind that I am only a 24 year old kid.

    So what exactly has happened? Well.. i have been approached through networking in my industry by experts that are much more experienced and have the capital to push me where I want to go. We are actively forming a venture which I will talk about in a second. Here is a bit of information about their backgrounds:

    Partner #1
    30+ years of experience in the industry

    Partner #2
    5 years of experience in the industry
    Current business doing 5 million in revenue(Same industry as our venture)
    Current business grew 1000% this year alone, growth begins to slow around 15 million assuming no new services are added

    The Venture

    Basically partner #2 sees Partner #1 and I as competition and we have all agreed to partner up on a venture that will benefit us all in the same industry. Here are the terms(not in writing as of yet):

    - I will take majority of the shares since I will be doing the majority of the work.
    - Partner #2 business will loan our new venture 25-50K to begin operations.
    - Partner #2 will be active for first year and then scale back after everything is established.

    These terms are not in stone but they have been informally agreed upon. I cannot tell you anything more than this. I also cannot tell you the industry I am in, sorry. We expect to generate 1-2 million in revenue the first year assuming we are able to find and hire talented individuals in a timely fashion.

    Thoughts

    Do not think for one single second that this was an accident, I actively sought out this industry for over a year. This niche was only visible as a gold mine until I was so well researched that I could see what everyone else was missing. At this point in time, most of that larger firms have existed(due to reasons other than not being able to generate a profit) while demand has continued to rise. An opportunity like this is only capitalized on if you are able to pick your industry and niche wisely.

    Sure, you can make money selling fruit on the side of the road but so can any idiot.. If you want to make your life easier, spend the majority of your time researching your niche upfront and the rest will be much easier.

    Most people want to just jump in because they have no patience, this is a huge mistake. You want to be both aggressive and passive, you must be still and once you have found what you are looking for, be prepared to pull the trigger.

    I could write 200x more; but I will stop here and let you ask questions.

    Thanks

    Edit: Would also like to thank JackEdwards & zen******* for always helping when I had a question or two.
     
    Last edited: Dec 29, 2013
  2. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Will continue to update as things progress. Move in day should be in the next few months, worst case scenario sometime in mid 2014. Will give information on dealing with attorneys, renting office space, negotiating terms and other little details as they come along between now and then.

    Thanks
     
  3. Daniel A
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    Daniel A DIESEL Read Millionaire Fastlane Speedway Pass

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    If you don't mind me asking about this, what did you major in while you were in college? I'm 20 y/o and have a good discount on tuition so I have decided I am going to finish school alongside learning on my own/starting a business.

    Plus can you give me some tips that you use(d) for finding a profitable niche? I am on 'the search' right now. Thank you!
     
  4. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    I majored in accounting; but you don't have to honestly.. Anything in STEM will be worth your time. The world is much more interconnected than you think and nothing learned is ever wasted. As Charlie Munger would say, once you have learned a lot about a lot you have the ability to turn chaos into simplified formulas for success. The ability to quickly distill vasts amounts of information into concrete action is one of the highest powers you can achieve. There's a difference between schooling and learning, don't worry about the major, just worry about learning as much as you can and then applying what you have learned in other abstract and unconventional ways. Go to school; but go and read books about everything and anything. Never stop learning.

    In terms of the search, I would say that the starting point is to narrow yourself down to scalable business models and then spend time researching them for months concurrently. My personal method was to concentrate on industries where I could sell something over the phone, have everyone under one roof, and be able to charge a premium for the product/service I was providing. You may find an industry where you have #1 and #2 but if you can't charge a premium then your profit margin is not going to make it worth the effort. You also have to be prepared to do things that other are just not willing to do.. If the start-up is easy, there is probably little to no margin left.

    Hope this helps, if you have more questions, just let me know.
     
  5. Daniel A
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    Something in STEM is what I'll go for no doubt. I was looking at the classes offered and the professors and I actually had an interest in so many of them. Sociology and psychology classes is what I wanted to take for now but they were all full. A lot of people are going to college haha.

    Are there any specific books on that topic that you would recommend? I will be getting the 4 Hour Chef because it is about accelerated and efficient learning I heard. Also systems...I hear that A LOT but I don't really know much about creating systems. Aw man...I've been keeping to my 2h22m22s (broken into daytime and nighttime) of daily reading of books everyday so far. If I do that for all of 2014 (except on Sundays or Saturdays) I'll know much more than I do now, I'm obsessed with information. I need more action though. I'll be an INSIDER very soon too so I hope to find what I need there.

    If you noticed I took a while to reply. I was thinking about what you said. If I have any more questions I'll ask, no doubt, but I want to really grasp what you said haha...thank you! :tiphat:
     
  6. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    This is a good place to start:

    http://www.solvemygirlproblems.com/2011/11/books-to-read/
     
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  7. Daniel A
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    Daniel A DIESEL Read Millionaire Fastlane Speedway Pass

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    solvemygirlproblems.com haha...that's another topic of interst, but not for this forum. This is the only forum I'm an active member of though :D

    Thank you for the link. AoM is a blog I read once in a while...that is a long list but I've got time to read :bookworm:
     
  8. pro
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    $25-50k isn't a lot.
    Why do you need these partners?
     
  9. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    25-50k isn't a lot if your starting an airline sure.. It is all relative. In all honesty, we could start the business with 3k and it would still work because we have the experience and a finely tune system in place to make it happen. If you were to try, you would have to make 1,000 mistakes before you learned the ropes.

    I don't need anyone; but in terms of speed and ease, they will be worth it. Not to mention this deal will lead to 10 more deals between us of even greater size and potential.
     
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  10. InLikeFlint
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    Make sure you hammer out the legal documents that include equity and the loan before you get too deep into this. The last thing you want is to be screwed over by sharing information to Partner 1 and 2 just to have them turn around and use it and leave you with nothing.

    In the original thread you mentioned that Partner 1 has 30+ years of experience but didn't say anything about his current earnings, or even what he will be offering to the partnership. Could you shed some light on this?

    Take this anyway you'd like, but if Partner 2 is making 5 million in revenue right now, why would he give up 25-50k to you in order to start a business that is on target to only make 1-2 million in revenue in the first year? Will he be keeping his current revenue stream and have it bolstered by what he makes with you?

    Keep your eyes open for anything that doesn't seem right. Maybe it's because the industry is unknown, but it seems a bit odd that individuals with that much experience (And one set to make 15M in revenue) would want to partner with you, given the presumption that you have less experience and are making less than they are...
     
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  11. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    No work is going to commence prior to having an attorney draft all the legal agreements. We are still negotiating terms and what not. In terms of partner #1, he brings to the table the ability to add products/services that we would not be able to other wise due to the complex nature of the industry. You need to have extensive experience to be able to dumb the process down for a sales person to sell it. I understand that is vague but he has actually been my partner for over a year and we have made money together already.

    Your main confusion comes from explaining where I fit into this whole thing. Well.. that is a good point and I did not explain it earlier in detail. Basically, I am 24 years old with a good amount of experience. I can run circles around someone that is 57 and someone who is 40. I fit into this partnership because I will be doing the majority of the heavy lifting after year 1. Partner #1 is going contribute 30 hours per week from day one and Partner #2 will contribute 40-60 hours the first year and then 5-10 thereafter. Partner #2 will not be giving up his current income stream for this.

    Keep the questions coming, I will answer them. Thanks
     
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  12. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Terms have all pretty much been accepted among all three of us, going to send them to the attorneys this week for draft. I will try and post a copy of the legal jargon when I get it back just for fun.

    More soon.
     
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  13. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Been a while since I updated this so I thought it would be good to give some progress information..

    First draft with attorney went well and it went back for a few revisions. We are currently looking for office space to get going. The plan is to find a small space where we can put three sales people and concentrate on selling for the first few months of operation. All the back end work will be handled by partners #3's already established office. Back end work will be paid for out of the sale at a rate of 30% per deal.

    We also made a few changes to the original agreement involving the equity. We have worked a deal where their will only be two equity partners and the third partner will receive separate compensation outside of a share of the company. We felt this was best because having too many equity partners can cause problems when their are conflicts of interest.

    One negative to this deal that is surfacing is the economy is actually starting to take off and that is bad for business. It is a weird feeling when you want the economy to do well and not well at the same time.

    More soon.
     
  14. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Just a small update for now. One partner dropped out so we started up much quicker and things have been going smoothly. We have a small sales team we put together which is still a work in progress in terms of using the script and closing deals but it is still very early.

    I also connected with one of the larger guys in the industry as he has recently gone into retirement and hired him as a consultant on a as needed basis.

    More soon.
     
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  15. ebms
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    ebms New Contributor

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    Which partner dropped out of your business and what route did you take to hire sales people?
     
  16. leveragehacker
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    leveragehacker Contributor Read Millionaire Fastlane Speedway Pass

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    Interesting thread, thanks for sharing. I'm also looking at starting a call centre and hiring salespeople once I've validated and smoothed out more of my business model.

    Are you cold-calling your leads? If so do you have any advice around putting together the script that you use?

    I'm also a big fan of Charlie Munger ;) currently halfway through Poor Charlie's Almanack - amazing book.
     
  17. davedev
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    davedev Silver Contributor Read Millionaire Fastlane Speedway Pass

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    Ha! I just started that book yesterday. Awesome man.
     
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  18. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Partner #1 has dropped out. He had the most experience but the deal was just not suited to him. He was an older gentlemen and it was not the best fit for him at this point in his life. You can take any route you want to hire salespeople, it is usually luck finding good ones. We usually use craigslist to find them but it takes time and you have to know how to spot the bad from the good which is a learned skill. Generally you should be more concerned with managing them than finding them. Managing sales people can be difficult to say the least, they are usually not the smartest bunch and come with large egos.

    Two concrete tips I will give you though, the first is you can never lower a sales persons salary/commission so be careful when you first hire them. The only option to lower their salary/commission is to fire them. The second is assuming your selling services, never have your workers and sales people in the same office space. Either have them in different suites or on different floors. It is just a bad idea to have them mingle with each other. If its not one thing, it will be another in terms of social interactions with each other. The less each group knows about the other, the better.

    Let me know if you have any other questions.
     
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  19. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Yes we are cold calling leads. Scripts are a work in progress until you have tested it extensively and then you can lock it in. Think of script building like building an adwords campaign. You need to test, test, and then more testing. A good place to start would be Straight Line Persuasion by Jordan Belfort.
     
  20. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    It is a very good book. One tip though when you read it, buy a notebook and write down what you believe to be useful. The book is overflowing with ideas from a huge amount of places and a huge amount of people, you simply will not be able to remember it all.
     
  21. leveragehacker
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    I imagined Jordan Belfort's info course would be shitty to be honest - considering his unethical nature. But I found a torrent so I'll give it a go.
     
  22. Michael W.
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    Michael W. Bronze Contributor Read Millionaire Fastlane

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    Like money, persuasion is a tool, can be used for good or bad, your character will determine this. His course is off the charts excellent.
     
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  23. leveragehacker
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    I shall definitely utilize it then.

    Also - @458 - you're up and running now yeah with your call centre? This thread is titled a million in rev by 25, how are you going with that goal? Considering you had less than a year to hit it that requires at least $4000 rev per day (weekdays).

    If I can get my system right I figured to turnover 1 million net profit in a year I'd need 14 sales staff making 5 sales each per day.
     
  24. 458
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    458 Gold Contributor Read Millionaire Fastlane Speedway Pass

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    It is too hard to tell right now since we just started but I am not really concerned with that honestly. I am more concerned with hitting one million and staying profitable. It is relatively easy to make a million in sales without turning a profit, the tricky part is growing quickly and remaining profitable. Our average revenue per sale is $2,500 so getting $4,000 in one day is not that hard with a few good sales people.

    In regard to your system, how many dials is that? You need to figure out your conversion rate for dials made. Dials are the only thing you control and you can make a lot more with a dialer which will improve your deals per day per sales person. Also, 1 million in net profit is a loft goal if your starting from zero, I would make my goal something like "I will prove the idea is scalable by making x number of dials per day". After you have proof that your idea works then you can adjust the goal upward.
     
  25. vinylawesome
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    Oh... the irony...... ;)
     
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