Solopreneurs Doing $1M or More...

[MJ DeMarco]

Nice article on Forbes where an entrepreneur plugged The Millionaire Fastlane and profiled a couple million dollar revenue guys working solo. In @Vigilante 's thread "Changing in Latitudes" we discussed how sweet it is to work alone without the headache and hassles of employees.

How Bold Entrepreneurs Are Breaking $1 Million In One-Person Businesses

http://www.forbes.com/sites/elainep...-breaking-1-million-in-one-person-businesses/

Nice start to my weekend.

“It’s a lifestyle,” he says. “We don’t want to work 14 hours a day to make $1 million a year. I like to go running during the middle of the day. I like to be able to have a life and not be chained to my desk 12 hours a day.”

Some of these million-dollar businesses are inspired by writers such as outsourcing guru Tim Ferriss, author of The 4-Hour Workweek, and MJ DeMarco, author of The Millionaire Fastlane —whose book on entrepreneurship Walton says changed his life. “It trains you to shift the way your brain thinks from a consumer mindset—“I’m going to spend all this money I don’t have” — to a producer mindset, where you provide value to other people and in return become valuable,” he says.

 

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[MJ DeMarco]

Got another mention, this one in Business INSIDERS...

http://www.businessinsider.com/money-lessons-for-college-graduates-2015-6

Was checking the article out to see if it was Slowlane drivel and instead was shocked to see my book mentioned. Sounds like my message is really starting to get out there.

 

[MJ DeMarco]

As for me, a relatively introverted guy who equates managing employees with running an adult daycare center, I'll take the latter.

I'm the same way. I'd much rather be a lone-wolf and dabbling in 6 and 7 figure businesses than some INC Magazine cover guru managing a $1B dollar company worshiped by Silicon Valley.

There is no right answer of course, it all depends on the individual and what they want from life.

 

[JasonR]

@JasonR, any idea how to do these two things at once? I'm often tempted to face a bigger challenge (do something on a larger scale like, say, Richard Branson), and then I remember I'm happy because my business can be managed by only me and I don't have to deal with all that crap related to bigger ventures that need people, an office, etc.

I have two ideas for you.

First - it sounds like you don't have a clear goal set for yourself. You probably go back and forth between building a huge business and being a "solopreneur." And that's ok, I did that too. It wasn't until I started traveling, and I realized the beauty, first hand, of having a business that's 80% outsourced, that I knew which decision was right for me.

Second, you may not realize that sometimes you don't need an office and the "crap" associated with larger start ups to make a high income. Only you know what's true for your business (ex. can you grow it without hiring, etc? I don't know - I don't know your business). You very well might be able to scale and grow while keeping your actual operation small by leveraging contractors and outsourcers.

For me, personally, my goal is to keep the "solopreneur" thing going and focus on building a multi-million dollar business through the internet, outside contractors, and automation.

That doesn't mean I won't work my a$$ off when need be. But my end goal is not only be financially free, but also to free up as much time as possible to do the things I want to do.

Some people want to work their asses off for 40-50 years building a 8 or 9 figure business. That's not me. And that's ok, what's right for me may not be right for you. But for me, you can't replace the sort of life I'm enjoying right now (I'm sure @Vigilante and @GlobalWealth can agree).

 

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[Veloce Grey]

I'm wondering how many business people actually realise the Forbes "contributor" (blogger) network is full of writers looking for another story to put up, another business or book to profile. It's in your interest to make their job easier.

So many people starting out seem to target the biggest name influencers with desperate, spammy begging for attention on Twitter or Facebook when right there they have a far easier path to getting their product/name/company mentioned on a site that will generate free publicity and instantly add to credibility if somebody Googles them.

It doesn't take much effort to send an email or tweet through and if you're actually offering them something that helps make work easier you'll usually get a positive response.

Just looking through the author's recent twitter interactions as an example-


Elaine Pofeldt@ElainePofeldt
Surprise, Surprise: Uber-Economy Entrepreneurs Pay Massive Taxes onforb.es/1EGcpys via @Forbes @zen99 @Intuit

Tommy Nicholas
@tommyrva
@ElainePofeldt check out the way @Painless1099 solves this problem 100%
12:50pm · 6 May 2015·Twitter for iPhone

Reply to @tommyrva @ElainePofeldt @Painless1099
24d

Elaine Pofeldt@ElainePofeldt
@tommyrva @Painless1099 I will. I'm interested!

 

[jazb]

Hats off to it. Raising large amounts of money, having employees/partners and making 7 figures is one thing...

but to do it by yourself with nothing more than a laptop and an internet connection is another. awesome.

 

[JasonR]

Related to the topic: The only thing better than having no boss

@Vigilante, you'll enjoy this.

Loved the article - it couldn't be truer for me.

A friend of mine owned a business doing 7 figures per month. From his kitchen counter.

So he opened an office, to grow bigger.

Why?

He didn't need the money. He could have retired, and he is my age.

He wanted a bigger challenge.

He hated it.

He grew the business. But he hated dealing with people.

So he closed the office and went back to doing what he was good at.

From his kitchen counter.

And he's much happier.

 

[MJ DeMarco]

Another cool mention, stumbled on the article to see some recommended books and found my own.

50 Global Entrepreneurs Recommend 50 Books That Forever Impacted Their Lives
http://www.entrepreneur.com/article/247511

 

[MTF]

This thread deserves a bump, plus I wanted to share with you some other great articles by the same journalist:

This Versatile Entrepreneur Went From Blocking IEDs To Running A Million-Dollar, One-Man Consultancy

Some interesting quotes:

To extend his capabilities beyond what one person can do, Smith has relied on contractors such as a virtual assistant, a fractional controller who handles his finances, and a collaborator for his recent book Optimize for Growth. “The challenge is to scale myself,” he says.

But if he had bailed, he would not be in the vanguard of solo entrepreneurs breaking $1 million in revenue—or leading the lifestyle he wants. “My preference is to have a solopreneur practice,” he says. “It’s a great life. It’s very simple.”

This Entrepreneur Built A Million-Dollar Business On Small Investments In Local Real Estate

Some interesting quotes:

Working as a financial advisor in San Francisco after college, Cory Binsfield had an epiphany on the Golden Gate Bridge: “It was the middle of the afternoon,” he says. “Traffic was so backed up I could barely move. I said, `What am I doing here? It’s beautiful but I’m tied up in traffic.’”

Although Binsfield invests in local properties, his business is almost location independent. Having taken his office paperless several years ago, keeps his records about his properties in the cloud, so he can access them from anywhere by phone or iPad. He realized just how smoothly the system worked when he was in Mexico and he got a text message saying the garage at one of his properties was burning. “I knew the exact garage and sent a Google GOOGL +1.04% voice messag handyman,” he recalls. “A half hour later, it’s taken care of.”

How Facebook Helped A Solo Entrepreneur Create Two Million-Dollar, One-Person Businesses

Some interesting quotes:

“Once you learn Facebook ads, it’s a great skill to have,” says Goff. “You can scale really quickly, which is great for the one-person business. It gives you a lot of leverage, where you don’t need more employees. I went from making $100 day on Facebook to $2,000 a day. It was no more work for me and 20 times the revenue.”

Here’s where we get to the messy part of solo entrepreneurship. One reason Goff sold that business was he learned something many people do when scaling up: It’s hard to keep up with customer service when you run a tiny business.

“I realized there’s a limit to what you can do with the one person company. You really can only get to about $3 million or so in revenue before you have to bring on employees. If I wanted to build this into hugely successful supplement company, I needed infrastructure and people to help me do it.”

These Millennial Brothers Turned A Passion For Bold Socks Into A Million-Dollar, Two-Man Business

An interesting quote:

Meanwhile, the business, which has relied on outsourcing and contract help to expand, gives them the freedom to live a very mobile existence. “For us it’s all about building a business which provided us the opportunity to travel, explore and live remotely,” says Boris.

He Left His Project Management Career To Start A Seven-Figure, One-Person Business

Some interesting quotes:

“If you can outsource your supply chain, you have almost unlimited scaling available,” says Nadler.

“The challenge with books for starting your own business is some mislead you,” says Nadler. “They want you to start online arbitrage—buying low and selling high—or underselling your competition. I know some people are very successful, but it’s extremely time consuming. The currency is really lifestyle. It’s not how much you make per month or year. It’s really about your return on time invested and being able to take a month off if you want to.”

He Left His Corporate Career And Launched A $2.5M, One-Person Business

Some interesting quotes:

Instead of keeping a giant warehouse full, he relies mostly on a drop shipper to process orders. “My business is probably 90% drop shipped,” says Johnson. That means if he gets a purchase order for 500 widgets from a government agency, he submits the order to a manufacturer who will send the goods straight to the client. He’ll then pay the manufacturer and collect the money owed by the government.

Johnson has faced a challenge common to businesses seeing fast growth: the temptation to work constantly. For a while, he found himself logging time at his desk through the weekends, which put a strain on his family and put him at risk of burnout. Now he’s slowed down, takes weekends off—except for doing some planning for the week ahead on Sundays—and works out with a personal trainer four days a week. He has found it hasn’t hurt his business. “No one says if you didn’t get back to me within 24 hours I’ll never talk to you again,” says Johnson. “People understand.” He hires contractors to help with his bookkeeping and website.

Love And Honey: How A Young Couple Created A $1 Million-Plus Artisanal Food Business

Some interesting quotes:

So how has the two-person company been able to grow to more than $1 million in revenue? In a word, outsourcing. Instead of running their own packing facility, the couple hires a company known as a co-packer to pack the honey in compliance with rigorous food certification standards. Krones, who has worked closely with an advisor from her local Small Business Development Center to grow the business, says using the co-packer represents a “very substantial” part of the total cost of goods, but it’s worth it.

“If you bring on employees and have your own facility, there is enormous overhead involved in that,” says Krones. “We looked for a way to launch the product that would maximize the ability to scale it without any of the risk.”

Teaming up with the co-packer has also allowed the couple to meet another goal: Enjoying time with their growing family. Krones has two sons—one of whom was born in July. “Our goal is to be able to spend as much time with our kids as we can,” says Krones, who spoke with me while 40 weeks pregnant. “Being able to outsource allows me to work from home and spend more time with them,” she says.

 

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[MTF]

View: https://www.youtube.com/watch?v=Fm1FnY0HHvA

 

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[MTF]

You mentioned "you latest business failure" and I read the blog post, but it didn't mention what elements were in that 1% that made you quit. Because employees were needed? What factors made you say, "f* this?"

There were a few reasons, including a financial one, but if I were to pinpoint just one that was most influential, it was that I felt chained to it. It just didn't work for my personality and financial success probably wouldn't change anything.

I remember you posting something similar, about not wanting to build another business hiring employees because it was just too much of a headache and too much drama. At one point, you understand that even, say, high six figures in additional income, are not worth losing what you have (freedom).

I was like this guy @JasonR described in this thread earlier:

Loved the article - it couldn't be truer for me.

A friend of mine owned a business doing 7 figures per month. From his kitchen counter.

So he opened an office, to grow bigger.

Why?

He didn't need the money. He could have retired, and he is my age.

He wanted a bigger challenge.

He hated it.

He grew the business. But he hated dealing with people.

So he closed the office and went back to doing what he was good at.

From his kitchen counter.

And he's much happier.

I also wanted the challenge. I could have retired, but I wanted more money. None of these motivators were as strong as the fact that even in the beginning stages, before the business started growing, I had been already "grieving" my previous lifestyle. I remember telling my girlfriend a few weeks after I launched the business that I already missed the freedom of solopreneurship.

I should have listened to my gut then. But I thought that I had to "grow" as an entrepreneur and the only logical step forward was hiring employees and becoming a "leader."

But it wasn't true, at least in my case. I resented having to check the business email a few times a day. I didn't like telling people what to do. I didn't like solving their problems as soon as possible because otherwise they had nothing to do (while I still had to pay them). I didn't like how expensive it was to have employees (the salaries, even the base ones, quickly add up and make the process of building a business extremely stressful because each month you're deeper and deeper in the hole).

I didn't like that if I had any new ideas, I had to explain them to the employees as if I were a kid explaining to my parents why I wanted a particular gift. I know that it sounds weird but I just don't like to operate in my life, business or private, in a way that forces me to interact with people so much and rationalize my decisions.

In my self-publishing business, I deal only with contractors. I sent them a specific job for a fixed fee and then it's done. I don't have to come up with new tasks for them. I don't have to keep paying them money even though I don't need them just because I feel guilty to fire them (happened to me with that failed business). I don't even need to hire them again if I find a better contractor. I don't carry any long-term responsibilities.

It's all flexible.

And that's what I love so much about solopreneurship. I'm not a stable person, in both the good (spontanenous) and the bad (prone to emotional roller coasters) sense of this word. I change stuff a lot. I like coming up with new ideas and testing them myself. I don't want to spend time telling others how to turn them into reality. I don't want to invest my energy into learning how to lead, knowing that I've been an outsider all my life and I can at most, on a good day, lead a dog on a leash lol.

I sometimes want to take a few days off and not do anything. I "retired" two weeks ago and I'm free not to do anything. Only a solopreneurial business allows that, unless you're an owner of a huge company with a proven CEO etc. which is extremely rare.

Also, this is pertinent to this topic (Derek Sivers from an interview with Tim Ferriss):

As for affecting my life, I found that when I stopped going against my introvert nature and instead just decided to shape my life around it, it made me very happy, because, before that, I used to do a lot of really extroverted things, thinking that I had to. Now I work alone instead of around others. I say no to almost all big group things, and instead spend really good one-on-one time with other people, and I’m happier than ever. I really think it’s one of the best changes I ever made in my life.

This is my theme for the new stage in my life. Shaping my life around who I am, rather than what others tell me I should be. I guess I needed that failure to finally realize this important truth.

 

[JasonR]

Is your goal gross-related only?

I mean, revenue doesn't equal profit and often more revenue actually reduces profit. A lean operation at $2.5M gross may actually generate more profit for the owner than a bigger operation at $10M gross. This is why I'm partial to lean, solopreneurial ventures. More return for less work.

Obviously in no way criticizing or questioning your choices, just curious how you view it and how the numbers work here (not asking for any specifics, just whether increasing the costs and revenue so much doesn't cut a lot into profit).

Bio pretty much hit the nail in the head.

That being said, my goal is definitely not gross related only. I think e-com guys talk gross most of the time (other than it sounds larger than net) is that it's pretty difficult to calculate our actual net until the end of the year. You usually have a pretty good idea, but it's not simple. We do run at healthy margins, and like Bio said, expect them to go up with economies of scale.

As your gross goes up, everything just becomes so much cheaper. For example, I need to buy a forklift. It's going to cost $8k to $12k. That forklift will do the same job whether I'm doing $500k a year or $5M a year. At $5M year, that cost of the forklift shrinks significantly. Same goes with employees, warehouse space, etc.

There are other things I didn't think about before I got my own warehouse. I expected my costs to be more expensive than a 3PL, but I think I was wrong. We just cut our shipping cost in half with negotiated rates (better than we got at the 3PL). I'm no longer paying a pick and pack fee. I'm a lot less worried about the time it takes to de-van a container. I think I'll actually come out slightly ahead, but with more control of our operation.

As far running a lean operation, I had to make a choice. Do I want a lifestyle business (which is fine in it's own right), or do I want a RFB (real F*cking business). I had a lifestyle business, and while it did well, I capped out at about $300k/ish a year net and I got bored. I decided I wanted to go all in and build a RFB - the payout will be worth it in the long term, and it's a new challenge for me. There are other reasons, of course, the money is definitely nice and I enjoy making more profit - it is something that matters to me.

We also donate to industry related charities and rescues. The larger I get, the more I can donate. I think it'd be much cooler to give a talk one day and talk about how we were able to donate $1M+ through the business we created, than it would to say I sold my company for $10M.

Went kind of on a tangent there!

 

[JasonR]

Loved the article - it couldn't be truer for me.

A friend of mine owned a business doing 7 figures per month. From his kitchen counter.

So he opened an office, to grow bigger.

Why?

He didn't need the money. He could have retired, and he is my age.

He wanted a bigger challenge.

He hated it.

He grew the business. But he hated dealing with people.

So he closed the office and went back to doing what he was good at.

From his kitchen counter.

And he's much happier.

Oh man it's so interesting looking back at my quotes.

While this is still true, you have to remember very business is different and unique.

We've surpassed $3M this year, and shooting to double next year. After going through two 3PL nightmares, I just got my own warehouse. We've got a small team now, and am hiring a local employee to manage the warehouse.

Why?

We can't get to where we want to go without the warehouse or more staff. My goal is to grow this thing to $10M gross and beyond.

If i wanted to stay small, and under $2.5M/year, I probably wouldn't need to do all this.

Pretty interesting looking back years later!

By the way, having a warehouse, physical location, and employees doesn't mean a loss of freedom

 

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[MTF]

http://www.forbes.com/sites/elainep...king-his-diet-sparks-a-seven-figure-business/

Another article by the same journalist about another solopreneur making 7 figures a year.

LOVE IT:

“To me, traveling is much more important than making a lot of money,” Orwell said when we spoke recently. “I make a decent amount. I can go for an hour-long walk and not worry I have to get back and make money. Next week, I’m going away for four days to a music festival. The next week, I’ll be away for four days for a bachelor party. The next two weeks I’ll be in Sweden. That would not be possible if I brought in VCs. I don’t feel I need a $5 million house, fancy cars, or fancy watches. I don’t begrudge anyone who wants that lifestyle. Traveling is the main thing I focus on.”

 

[MTF]

Great answer @JasonR, thank you!

Today I went on a day trip and despite not working at all I still made more than I spent. I think I know the right answer about my goal. It's the same as yours. Can't beat the freedom to take a day off whenever you want and still get paid while you enjoy yourself and don't think about the business at all.

I think that as long as you don't start actually using your freedom as a solopreneur, you'll be more likely to believe you have to start a huge business with employees, a physical office, etc. because you'll feel bored and not really fulfilled. Working on your personal life can eliminate the need to treat business as the only solution to "I'm not fulfilled/challenged" problems.

 

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[ClaytonAlbright]

Great read. I found it insightful how the personal trainer biz. was about to throw in the towel. Instead he simply changed the model of how he gets paid but still offers the same product then it started working much better for everyone.

Just goes to show its not always just what you sell, but how you get paid from it.

Just like when MJ went to the leads model instead.

 

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[theag]

I know Andrew. but I would never consider him an expert or credible source on any topic. that's about all I will say on this topic.

Good to hear you confirm this. I came across him from time to time but always had the impression that he's just a typical internet info marketer who's topic happens to be offshore stuff instead of the usual crap.

Also, I would never trust a 20-something with a baby face with taking my business offshore. I'd want some older, maybe a bit rugged and with a few scars from battles with various tax authorities. Like a white-collar barbarian.

 

[biophase]

@JasonR,

I mean, revenue doesn't equal profit and often more revenue actually reduces profit. A lean operation at $2.5M gross may actually generate more profit for the owner than a bigger operation at $10M gross. This is why I'm partial to lean, solopreneurial ventures. More return for less work.

I don’t think it’s possible that this would be true for any e-commerce business. That’s just too big of a gap.

At 2.5m at 20% margin you would make $500k. At 10m at 5% margin you would make $500k. basically what you are saying is that the added $7.5m in revenue is all breakeven.

I can tell you that running efficiently you can grow without increasing costs. I can use the same staff to run 2.5 vs 5. At 10 maybe I will need 2 more people and maybe 50% more warehouse space. I’m doing about $5m now. If I got to $10m I’d expect my margin to increase drastically because a huge cost for me is warehouse rent and that won’t double as sales double.

 

[Andy Black]

Likewise. Financial independence and the freedom to work how I want to work.

I also have zero interest in taking on employees. Maybe it will happen one day, but it's certainly not a goal.
I left working for big corporates for a reason... to get away from the annual appraisals, office politics, and mindless meetings.
I currently work in a small team of 3 freelancers (myself included). Being freelancers we've all got similar mindsets - which is so refreshing.

 

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[Vigilante]

Excellent article and congrats on the ongoing positive publicity. Reposted to http://www.facebook.com/mybusinesslive

 

[Vigilante]

The guy who shouted out MJ's book in the article is doing an impromtu AMA on reddit:

https://www.reddit.com/r/Entreprene...bold_entrepreneurs_are_breaking_1_million_in/

For ease of reading, here are just his posts:

https://www.reddit.com/user/allenthird

Every time I visit Reddit (like I just did) all of the armchair detectives bug the shit out of me.

 

[theag]

http://www.forbes.com/sites/elainep...king-his-diet-sparks-a-seven-figure-business/

Another article by the same journalist about another solopreneur making 7 figures a year.

LOVE IT:

His seven-figure business allows him to enjoy something that’s more valuable than money: The time and financial freedom to do what he loves–exactly when he chooses.

Could be a quote right out of TMF

 

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[Andy Black]

I’m the same @MTF @eliquid

I could scale by hiring Google Ads freelancers or employees (or whitelabel an agency). I tried it for about two weeks and hated it. My super power is being able to do the work better than the people I hire.

My other super power is how I interact with people in forums, Facebook groups, live workshops, Zoom calls, etc. I tried multiple times to delegate/outsource sales and they failed miserably. Again, they can’t do it as well as me.

So what am I to do if I want to scale while leveraging my superpowers?

Find a business model that fits the life I want to lead, the work I like to do, and the way I like to do it.

There’s so many ways of doing business nowadays that it’s just a case of figuring out where you want to go and how you want to get there.

It also takes courage (or bloody mindedness) to ignore the pressure to do XYZ or ABC lest you’re not a “proper” business owner.

I feel there’s a script amongst business owners too, but being unscripted means doing it your own way. Honest to goodness, I’ve lost count of how many people tell me what I should do, need to do, must do, etc.

Tagging @Lex DeVille and @Fox as I think this convo is right up their street too.

 

[MTF]

I've been thinking recently about this again after an unsuccessful attempt to build a non-solopreneur business despite being a lone wolf by nature.

My conclusion is that some people really should listen to themselves. There's nothing wrong with keeping your business small. And no, you don't have "limiting beliefs" if you refuse to have employees and if you don't feel comfortable becoming a "leader" and a real "CEO."

I wrote some thoughts on my blog about it. Here's the article pasted here:

The most unenjoyable periods in my business life come from the projects that involved hiring employees.

I love entrepreneurship because it allows me to work when I want, on what I want, without ever reporting to anyone else. Having employees has always felt to me like prison, as having a job and a boss, rather than the flexibility and freedom.

Perhaps I was doing the whole “leadership” thing wrong. But it doesn’t change the fact that I’m a lone wolf by nature.

I don’t like to collaborate. I want to own the creative process.

I don’t want to lead. I prefer to be away from both the leaders and the followers.

Business gurus would tell me that I have “limiting” beliefs.

But after my most recent business failure, I’m now sure that for a person like me, solopreneurship is the only smart 80/20 choice.

My calendar is empty. I don’t have to explain my decisions to anyone. I can take time off when I want. I‘m not responsible for anyone’s financial security.

For many business models, hiring isn’t the best or the only growth strategy. We can use smarter leverage: content, code, contractors, and creativity.

Before you hire anyone, ask yourself if you can use any of the above. And if you can’t, don’t assume you have to hire someone now. You may grow your business through subtraction, too.

If you don’t see another way out than to hire someone, ask yourself if the price of growth is worth the trouble.

There’s no shame in being a company of one. For a lone wolf, nothing is more rewarding than doing your own thing on your own terms.

 

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[Andy Black]

I agree with @eliquid. I’ve a lifestyle business even though I’ve no interest in travelling.

As a family man I’m repelled by marketing that pushes the “digital nomad” business where we supposedly work on a beach with a laptop. I’d prefer to work in the evening and be on the beach with my family during the day. But then I don’t like beaches anyway, ha. I just want to spend more time with my family.

That’s what a lifestyle business means to me - the business fits round (and enables) the lifestyle I choose, not the other way round.

 

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[Trivium iz rC]

Great story about don't hire until you need to. I feel too many people hire too early and end up shooting themselves in the foot. I feel like this model will become a lot more popular as more and more millennials get into business.

People are finally starting to see that bringing on employee's & government regulation into your business isn't worth the headache. It stinks if your an employee but hey those are the cards you choose.

It's going to be interesting to see that once the next recession happens and jobs collapse again how will the government respond to regulations with hiring employee's and stimulating small business for economic growth.

 

[vinylawesome]

Great article, it's cool to see the impact the book has made. Congrats!

"He decided to start over, but this time using a franchise model. Starting June 1, 2012, in what might be considered the rebirth of his business, he began licensing the right to use the company’s brand name to individual trainers. “A lot of personal trainers would love to be entrepreneurs,” he says. The trainers pay $400 a month. He, in turn, provides support with aspects of the business such as management, educational assistance and back-end infrastructure. The business has 10 franchise partners in territories with a population of 500,000 or more, who recruit and manage trainers in their area. About 40 of the trainers are managed by headquarters, rather than by the franchisees."


"So far, his model has been working. The business has grown to the point that it has 126 personal trainers in Canada and is on track to break $4 million in system-wide revenues this year. At his corporate headquarters, where he is still the only worker, he projects $1.2 million, with about a quarter of that in profit. His secret to growing the business without formal employees is a customized software to automate may functions, in which he has invested more than $250,000 over time. For instance, the software enables clients to log into the company’s computer system and see the homework their trainers have assigned."

"In retrospect, Mezheritsky realizes that under the traditional model of hiring employees, turning a profit meant creating a “negative lifestyle” for employees. He couldn’t pay them a salary that would really motivate them or get them invested in the company’s success. “Maybe the top trainer was making $35,000 a year,” he says. As a result, employees were driven to show up mainly to collect a paycheck."

In his new model, his interests and those of his trainers are aligned. Because he makes money from the recurring fees the trainers pay him, he’s highly incentivized to help them succeed and keep them part of his brand. And they are extremely motivated to grow their businesses, because they are the ones who make more money when they do.

“Not only are we attracting people I could never have attracted as an employee, but they’re paying us $400 a month to provide those services for them,” he says. “They are making about $60,000—a very good living.” And the overall vibe of the business is better. “Everyone is here because they want to be,” he says.



The reorganization of labor is a smart way to scale a business quickly. Less burden on the company owner but a system that creates a win win for the labor provider and business owner/franchisor.

I've seen similar types of labor models in utilizing franchisees as labor providers in:

• The cleaning industry; CleanNet, Jani-King, Coverall, etc.

• Promotional products; Proforma.

• Office Supplies; OfficeZilla
• Healthcare: BrightStar, Right at Home, etc.

It's doubtful the above mentioned companies would have scaled as quickly or have the profit margins that they do by utilizing a "traditional employee/employer" model.


Source: Forbes Article

 

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[Toushi]

Was checking the article out to see if it was Slowlane drivel and instead was shocked to see my book mentioned. Sounds like my message is really starting to get out there.

Randomly stumbled upon it too... That's how you do SEO people. No need to spam websites, buy links, setup fake blog networks- just the value of a good product sending powerful link juice your way as appreciation from the world for your contribution.

Congrats

 

[RazorCut]

I found it insightful how the personal trainer biz. was about to throw in the towel. Instead he simply changed the model of how he gets paid but still offers the same product then it started working much better for everyone.

I was talking only yesterday to a close friend at his wedding about personal trainers and he told me one of the trainers local to him bought a 7.5 tonne lorry, kitted it out into a mobile gym and drives to his clients wherever they may be (home/work). You can't miss it as a lorry provides loads of advertising real-estate and probably creates quite an impression.

 

[Ubermensch]

Seven-figure and 8-figure rainmakers have been using specific strategies to hit high annual numbers for a long time.

Million-dollar a year salespeople, I think, are going to be the new breed to take full advantage of the global marketplace.

If you can make a million a year, and all you need is a cell phone and a laptop to speak with vendors and clients, that's a skill worth its weight in gold.

I think this type of person is behind the online marketers, because they make a large amount of money on a small number of clients - not a small amount of money for a large amount of clients.

Once the off-line rainmakers start thinking like the online rainmakers, they'll catch up, and their hustles will drastically improve.