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.