No announcement yet.

A couple of insights I want to share with you based on my own entrepreneurial journey

  • Filter
  • Time
  • Show
Clear All
new posts

  • A couple of insights I want to share with you based on my own entrepreneurial journey

    This article is gonna be a bit of a different tone from the usual fluff you see online. Instead of talking about all of my successes, I?d like to tell you how I failed - HARD - and how I got back up after the fact. Before I get into this, there?s one thing you need to understand: Throughout my entire life, I have always been talented, I?ve rushed to learn new skills, and I?ve been very quick on the uptake. I don?t say any of this to brag, but rather to point out the fact that failure can happen to anyone - even if you?re smart, even if you work hard, you might find one day that you?re building a house of cards, and all it takes is one gust of wind to blow the whole thing down. That being said, I?ll give you the basic rundown: I started my first company when I was 19, it was a local moving company that provided moving labor services for $75 - $90 / hr to people who would rent their own trucks. We would do an average of 30 - 45 jobs per month, or about 2 - 3 per day, with an average ticket price of $300 - $500. For the first 3 months, I thought things were going so great - I was getting jobs from Uhaul (who took 15%) and Thumbtack (Which charged around $10 per lead), and all I needed to do was send out day laborers I hired from craigslist and get paid. I was able to find a few really great guys to work for me regularly, and things were pretty cushy? Until all of that came crashing down. 2 major things happened: Insight #1: You *NEED* to have a steady source of clients that YOU control The first of those was that Thumbtack more than doubled their prices, and stopped providing a guaranteed conversation with a client. This more than doubled my cost per customer, from around $50 to $150 on average. The lead quality also dropped, so the leads that DID come in were only worth around $200 - $400 on average. Which means that yes, it would actually COST me money to send workers out to a client. Insight #2: Make sure you hire great employees - and have enough work for them. The second was that since I no longer had any work for them, the great guys I?d found had decided to go get day jobs. That meant that I had to start scrambling to get new people, and a LOT of those would no-call no-show. (And then I would get a call from the client, asking me where the guys were. I don?t think I need to tell you how insanely frustrating that is.) Insight #3: Do NOT expand your business until you are COMFORTABLY maxed out with ONE fulfillment team While all of this was going down, I decided that all I needed was to expand to a different market, start buying leads in California, etc. After all, this happened around September - October 2016, and I figured (correctly) there wouldn?t be a lot of people moving in Minnesota. As it turns out, that was a HUGE mistake. Not because it didn?t work (I did end up getting a few jobs down there, including a nice $10K job in San Diego), but because I had the same issue with the workers. Knowing what I know now, I would?ve gotten my shit together first. Which leads me to? Insight #4: You AREN?T always right. In fact, you?re probably wrong. That?s okay, you don?t know what you don?t know. The BIGGEST mistake I made was assuming that I was right, and that there wasn?t a better way of doing things. In fact, I made a lot of assumptions on that first go-around. I had assumed that getting $300 - $500 moving jobs to try and ?build a reputation? was just what companies did. I had assumed that because other companies were charging the same, it meant that I was actually doing things well. I?d assumed that all I needed was a little bit of marketing, and that this expert or that service would suddenly flood me with customers. Now to be fair, these were pretty reasonable assumptions. We like to think that if something doesn?t work, big professional companies wouldn?t be doing it. But as we?ve seen time & time again, that?s not necessarily the case. ( and many, many more) Insight #5: Funny enough, most other people are wrong too. Before I was able to actually SOLVE my problems, I had to do a *lot* of thinking and a *lot* of studying. I got on the phone and I talked to a lot of businessmen. Everyone from other moving company owners to marketers, to yes, consultants. I got on forums, I read books, I looked at the advice people were giving, and I took in a LOT of information? Funny thing is, not ONE person could genuinely diagnose my problems from the ground up. The other moving company owners thought they were doing just fine (While they could barely give me 15 minutes on the phone before running to put out a fire), the marketers told me how ?amazing? their ?solution? was, and how getting on the front page of google would get me so many clients. The consultants were only even interested in bullshitting me and selling their course for $997. Any advice they could give was watered down, and usually wound up being something like ?Oh just run Facebook ads. I can teach you how to do it.? I would tell these people exactly what was going on, EXACTLY what my problems were in business. But not once did a single person take the time to truly understand my situation & give me an accurate diagnosis. Everyone wanted me to like them, and they wanted me to buy their service, but they didn?t want to sit me down and say ?Listen, you fucked up. It?s fine, it?s okay, we can get you through this, but you fucked up.? And quite frankly, I would have loved someone to tell me I could?ve been making $5,000+ per client. I would?ve jumped on board with them in a heartbeat. Insight #6: If you want to solve a problem, you need to WANT it bad enough, and you need to TAKE ACTION. After about 2 years of struggling with this, getting occasional smaller jobs, and getting further and further into debt ($33,477 was the max I got to) just getting by and paying my rent, I was completely fed up. I mean here I was, spending the BARE MINIMUM on my entire life. I focused entirely on saving money, and I really didn?t have a lot of fun at all. Sure I had friends, and we went out and did some things together, but in the back of my mind I was always thinking ?****. I can?t afford this $5 beer.? If you?ve never experienced that before, just know that it sucks. It doesn?t just give you a little stress to deal with for an hour, it permeates through your entire life and makes you feel like absolute shit. I had made all sorts of excuses though, things like ?Oh, I?ll just get some jobs next summer from Uhaul.? or ?I can just buy some leads from Thumbtack again, that?ll work out well.? The lowest point was when my card was declined when I went to buy a $3 coffee. I knew I couldn?t keep it up any longer, and that sooner or later I was going to be homeless. So, I did what any rational person does in this situation, and went into business with a husband & wife team who used to work for me. That was both my biggest mistake & my saving grace. Insight #7: Most people don?t have what it takes to succeed I didn?t know it at the time, but this husband & wife team (Let?s call them S&M) wound up effectively being my first consulting clients. We had it worked out so they would focus on the fulfillment side of things (Which is what I was completely sick of), while I would focus on getting the the jobs coming in. Just for clarity, at this point we had decided on providing full service moving (including the truck) instead of just the moving labor like I?d been doing for years. This gave us the ability to charge more, though we hadn?t nailed down our ideal client, pricing, etc. just yet. More on that later. Here?s what happened: It worked too well. Around 2 weeks after we got started, their calendars started to get swamped. They kept getting more and more and more clients, and eventually they weren?t able to keep up with the demand. Unfortunately, they saw a very similar issue as I did, although they weren?t able to handle the stress as well. Unfortunatelier (More unfortunately? Unfortunately still? You get the idea), they didn?t listen when I told them to start being more selective about both who they hired and the jobs they would take on. Insight #8: Be VERY selective about what you do and who you hire (Not every job is a good job) S & M would take on every job that came their way, even if it was only for $75 to move a dresser an hour away. This is despite the fact that it was clearly taking a toll on them, and that it wasn?t even taking that on. They just wanted to help people and make a bit of money, they weren?t too concerned with the business side of things. Now, I saw this and I utterly hated it. I hated seeing someone else - someone that I had convinced to believe in my ability to help them - go through the exact same problems that I did. That?s when I decided 2 things: 1. I would get this marketing thing down completely, and 2. We needed to pivot to high ticket clients. Insight #9: Take the time to aim. In the process of getting the marketing down, I spent another month studying & practicing, really learning the ins and outs of pricing - which I?ll get to in a minute - and the biggest lesson that I learned was that you need to AIM. Up until this point, all of the marketing that I?d been doing was broad spectrum - it would hit ?everyone? ?everywhere? - and I was okay with this, because I didn?t realize just how draining it was to take on small clients. Once I took the time to aim, everything changed completely. We decided to only take on clients that were worth a minimum of $2,000 each - a good start, and it ensured that S & M could actually afford good workers. Side note: Through all of my talks with business owners, this is one of the most common problems I see. It is ALWAYS rationalized, but nobody ever wants to admit just how big of a problem it is. If you don?t take the time to aim, that?s like going for a run with a broken leg - eventually you?re gonna have to amputate it. Going back to our insight on assumptions earlier, this is where I (incorrectly) assumed that we would be harder to sell these jobs. Ha. Hahaha. Nothing could be further from the truth. In fact, we wound up with 6 high-ticket estimates booked for around $200 in marketing (and that?s not counting the ones who called in the spring, once they were actually ready to move). Of those, 5 of them actually booked their move, and we wound up with $20K in revenue for the month, which translated to $10.5K in profit once all was said and done (though we could?ve done better if we weren?t renting trucks). That taught me an extremely valuable lesson about sales as well: Insight #10: Sell based on VALUE, not price One thing that was hammered into my brain from doing that, was the fact that the sale itself was very easy. I showed the customer how much we cared about giving them great service, (by actually giving them a small demonstration & taking the time to walk through & really see everything in their home) and I showed them the great value that we provided. Here?s a valuable sales tip for you: When someone is truly ready to buy your services, price isn?t anywhere on their minds. If you pay attention, you can actually sense the moment someone is ready to buy. As it related to selling moving services (Though it applies to *EVERY * service), people wanted to know that their items were going to be well taken care of, that the movers were going to be professional, and that the job was going to be simple. The key takeaway here is that if you want to sell your service for a high ticket price, you need to be good at what you do, you need to be able to connect with your potential customer & make them understand why you?re the right man for the job, and you need to (obviously) be talking with the right person. Insight #11: It?s okay to ask for help Alright, that more or less concludes my story about running my first company. I hope that it gave you some insight into the reality of business. I know it?s something that not very many people like to talk about, and I know that if you?re reading this article, you?re probably going through some sort of business problem yourself. I also know that 9 times out of 10, you?re thinking it?s ?just? a leads issue, or that it?s ?just? about making another $300 sale, or that ?It?s not that bad.? But I need to stress this for you: It is that bad. If I had started out with a targeted approach, if I?d had my pricing together to begin with, I would have made (at a minimum) $240,000 (6 months in the season x 20k / month x 2 years), not to mention the 2 years of STRESS I went through, just having to deal with cheap guys not showing up. If you?re looking around for information, if you?re talking to all sorts of marketers, reading books & taking nonsense calls that aren?t going anywhere. If you?re charging less than $5,000 for a client, if you have issues with people not showing up, or if you haven?t closed anyone in the past 2 weeks, then talk to a consultant who knows what the **** they're actually doing. Set aside an hour & a half of your time to talk someone who doesn't claim that "one special trick" will solve "all of your problems" - that's *never* the case. Find the guy who will go over all your issues like a doctor, and give you a true diagnosis of your problems. Someone who's honest, and will tell you if they can or can't help you.