Woohoo! As soon as I saw the site Christian I was astounded at what a great idea it was. I know you will only go on to bigger and better things! Good luck!
How I built a business with no money - Part 2 of 2
How does someone who is big on vision but short on cash make a way for themselves as an entrepreneur? This is the second in a two-part series about how I built my current business with nothing out of pocket.
As business began to trickle in, I soon realized that the only way any of us would make enough money in the long run to make all of our work worthwhile was to increase our volume far more than I could do on my own. I needed a sales team, but I had no money to pay them. In order to make it interesting for salespeople, we had to carve out another pretty big chunk of incoming revenue to hand over to them.
At first the idea of taking such a slim margin was discouraging, but each time I’ve shared a piece of the pie with someone else, I’ve been very calculated in figuring out exactly how much our gross revenues would need to be for everyone to get something of value out of our partnership. If the numbers didn’t work, we either had to tweak percentages for all parties, or we had to find other ways to expand even more.
I knew going in that it would be hard for me to convince a seasoned salesperson to come on board full-time for pure commission work, so I hooked up with a brilliant, highly educated mom who had left the workforce to stay at home with her two boys. However, she could still use the extra income of some flexible work, and besides, I knew she had too much of a killer instinct to go without a job for long.
Though it would have been nice to offer her a partnership as well, I could not do so without losing my majority interest. So instead, I asked her to be in charge of all future sales people, and we talked about ways to carve up the commission I had set aside so she could get paid for supporting other sales staff, yet still leaving enough on the table to motivate other sellers. Again, I was giving up a lot of control over the day-to-day operations of my sales folks, but I trusted this person, so we gave it a shot.
Today, we’re not only bringing on more sales people, but they also have the option to forgo a small slice of their commission for warm leads developed by our sales research assistants. This, my sales manager and I realized, was critical to the volume we were looking for. So now we have a handful of people who, under our guidance and with our training, go out and find the best leads for our sales staff to pursue. Though they only get five percent of gross revenue, they are playing a game of numbers, banking on the promise of these leads turning into enough sales to make it worth their while. In turn, the sales people, all of whom are part-time, are generally more than happy to cough up five percent to get hot prospects handed to them on a platter. It’s a new piece of the puzzle for us, but so far, it’s yielding exciting results.
So we have all of these great people in place, and our site is fully functional, but where do these so-called leads come from? After all, leads lists can be cripplingly expensive, and as I’m sure you’ve gathered by now, we didn’t have the money for pricey lead generators. Fortunately for us, the best prospects we’ve found were for free on the internet, right there for the taking.
Job boards such as Monster and HotJobs have hundreds, if not thousands, of listings nationwide every day for companies seeking staff members that do what we offer. Though some companies want someone on-site or full-time, there are a good number of people who are willing to work with a team of contractors in order to save them some money, and to offer them the benefit of the expertise of several professionals, rather than just one employee. Not everyone buys into the concept, but the last search I did online yielded 250,000 prospective leads in our field, which means we can afford to play the numbers a bit.
Finally, Craigslist has been an invaluable resource for us in many ways. First, there are tons of jobs posted there, and since postings are divided up by state and city, it’s very easy to split up territories for our researchers to focus on. With new “help wanted” postings in nearly every city every day, we always have a fresh crop of leads to sift through and contact.
In addition, we’ve found a great number of qualified people by posting “help wanted” ads of our own. In fact, in less than twenty-four hours we received so many responses to our request for hourly contract workers that we had to pull our ads. With more than 12 million people logging onto Craigslist every day, we can be as specific as we need to be in our job postings and still get a flood of interest. And unlike Monster and HotJobs, posting on Craigslist is free.
We’re still in the early stages of our growth as a company, and we have to hit a certain volume of business before I have the prospect of a regular paycheck. In the meantime, I have nearly two dozen people excited to work with me on what once was only an idea in my imagination. Though it may change down the road, I can say that, so far, I’ve not spent a penny of my own money to get this far. So far we’ve been profitable every month since we started, which is part of the beauty of the model we have developed; money only goes out if it’s also coming in.
For a guy who was big on dreams and short on cash, that’s about the best result I could ask for.
Learn more about the author, Christian Piatt.
Comment on this article
Posted by Marie Chandler, Everton Park, Queensland Australia |
Mar 21, 2008
Posted by Carl Foner, Brooklyn, New York |
Mar 22, 2008
Good article. It gives me some interesting ideas about how I might expand my own business.
Posted by Laura Steves, Keller, Texas |
Mar 24, 2008
Awesome! A plethora of information.
Posted by David Tejeda , Seattle, Washington |
May 20, 2008
I love how you worked with the sales people, great article. It gives me ideas!
Posted by Diane Moore, Seattle, Washington |
Sep 19, 2008
Christian, your article was so inspiring that I had to go find the first one, which led to sooo much more. What a great help! I have the job of the salesperson you took on, and am searching for leads and salespeople to work with me to help our company grow....so thanks for penning this piece, and I hope there are more to come. Great advice is like finding a rare gem!
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