Million Dollar Business Status from Humble Beginnings - My true
story
Many of you who are reading this will identify strongly with the
work situation I was in and will at this moment be thinking of
breaking free of the corporate shackles and discovering the
freedom of your own business.
Going back to 1994, I graduated with a university degree, for
which I had studied part time for 7 years, and armed with my new
qualification managed to get a position in a medium sized
corporate.
By 1997 I had progressed fairly well in the company and was
cruising along quite happily with fairly good prospects in sight.
Great things had been promised and my objective of getting onto
the board of the company was starting to become a reality.
However as the months passed by I was beginning to realize that
my future, that was in the hands of the company directors,
wasn't being addressed with the passion that I thought it
deserved.
My concerns were brought to the directors' attention who assured
me that I had nothing to worry about, but needless to say more
time passed without my corporate future being settled.
Looking back now, I can categorically state that I owe my
directors a huge debt of gratitude because it was their lack of
urgency that decided me to take my future into my own hands,
which was the best thing I could have done.
Once I had made my decision I didn't even want to wait until the
January so that I would be assured of getting my Christmas
bonus, which is a common strategy employed by resigning
employees, but left the corporation as soon as I could and at a
time that wasn't ideal for starting a new business.
So after resigning at the end of August 1997, amid howls of
protest and promises of a 'bright' future blah blah blah, I
upset my now ex-employers even more when I announced that my
right hand man had furnished me with his resignation as he was
coming with me.
During my notice period I had registered a trading name, founded
a corporation, located suitable offices and formulated a 12
month budget.
So come 1 September 1997 the 2 of us sitting in our new company
offices with no assets (save for a bit of office furniture) no
customers and no telephone lines.
Although the initial capital investment and risk in this
business was almost zero, I personally had had to take out a
bank overdraft to tide me over for 6 months - after that my
funds would have dried up so this business just had to work!
Anyway to cut a long story short we put our shoulders to the
grindstone and slowly started to build a client base who we
serviced with contractors, thereby ensuring a variable operating
cost.
After the quiet Christmas period it was apparent that the model
I had chosen for this business was going to be effective and
profitable.
This model in a nutshell was to employ variable resources,
including people and vehicles, to supply the service in our
industry and to not own any assets. This strategy ensured our
fixed overhead was very low and that operating costs would be
linked to turnover.
This model proved to be successful on a financial front, ie zero
activity = zero cost to us, as well as on a customer service
front as our contractors were hand picked and highly customer
driven.
In March 1998 I recruited a person, who at one time worked for
me in my corporate life, to head and drive our sales and
marketing effort.
So now there were 3 of us shareholders of the business and the
rest of the personnel were made up of contractors.
Whilst our target market was very specialized it was also at the
premium end of the services in our industry, which meant that it
was highly profitable and not volume driven.
Because of the premium nature of our service it meant that to
make $x,xxx we had to perform 1/100th of the amount of
activities our competitors were having to perform.
This gave us the added advantage of making our business easier
to manage and extremely service focused.
By the end of 1998 we employed a receptionist come operations
assistant. This was our first permanent employee whose salary
was highly incentivised to ensure we got the best out of him
even if we had to pay double the amount we normally would have
paid. It was worth it - rewarding people for the correct
behaviour is such an easy way to get people to do their jobs
properly and passionately.
During 1999 our client base consisted of only 10 'blue chip'
clients and a number of smaller ones but by the end of the year
each one of us (3) had reached millionaire status thanks to the
business.
>From 2001 onwards we were turning over more than a million a
month (with a 50% margin) which ensured that all stakeholders in
the business did exceptionally well.
At the end of 2003 I sold my stake in the corporation, which
ensured my multi-millionaire status and I now run a similarly
structured business that I set up in exactly the same way but
with different personnel in 2001.
I have also been bitten by the internet bug and have started my
own internet business to which I now devote a significant amount
of my time.
In conclusion the business model I employed to change my life is
one that can be used in many industries and can enable anyone to
start out with low capital investment, low risk but with a real
opportunity at huge success.