I’m going to teach you how to start a business, how to grow a business, and I’m going to teach you how to overcome some extraordinary challenges along the way. I’m going to tell you the story of how I went from zero to $1 Million dollars.
First, I want to tell you a little bit about myself in case you don’t know my backstory. I grew up in a government project in the UK called Council Estates. It’s essentially subsidized housing for people that don’t have much money. The reason we didn’t have much money was because my dad was a janitor and my mom was a stripper and when you’re living on that kind of income, you need state welfare to help you.
They help by putting you in these homes with a whole bunch of other people that just don’t have much money. It was a dangerous neighborhood. You didn’t have many opportunities to succeed and they assumed that you would end up being nobody. To cope with living in that environment, I didn’t end up hanging out with the gangs on the streets and I didn’t go and use drugs or any of that other stuff or cause trouble.
I focused on escapism and imagination. That meant I spent my days sitting indoors, no matter how sunny it was outside, playing Dungeons and Dragons, Warhammer 40,000, and Magic the Gathering, essentially being a nerd. That’s what I did, I sat indoors doing all of those things.
I’d love to say that I sat indoors playing video games, but video games were a luxury that I just couldn’t afford. It was very expensive for me to buy a game console when I was a kid, it was something you hoped to get for Christmas. There were many years when my parents would come to me and say, I know you really want that Stage Megadrive, but we can’t buy it for you because funds don’t allow it.
I remember all my friends got all the game consoles first and they were talking about them and I would be sitting there playing on my spectrum while they were playing Super Nintendo because I just couldn’t afford to get hold of it. With that being said, I always wanted to be a hard worker. I needed to be a hard worker to buy nerdy things. Nerdy hobbies can be quite expensive.
Being a Nerd Taught Me to Work Hard
Once you have the Dungeons and Dragons books, then of course you don’t need to buy anything, you can just sit and play with them over and over again. But the books themselves cost 50 pounds each and three books, that’s 150 pounds. You’ve got to get the money from somewhere and I was down to make money anywhere I could to feed my nerdy little hobbies.
That meant I got my very first job at the age of 11 as a furniture mover. I worked with a local furniture company because that was the only job around. I would carry the little bags backward and forwards with anything that would fit in my little 11-year-old arms, while the adults carried the furniture. I wouldn’t get paid for that because I was too young to work, what they would do is they would give me tips if we got some.
I learned nice and early that the only way I got paid is if we, as a team, got tips. That meant if one of the workers, who was a fully grown adult, upset somebody we didn’t get a tip and I didn’t get paid. So I learned to be smart with my words and I learned how to cover up for other people’s mistakes. I learned to run while carrying heavy things because I wanted to move as fast as possible. If we managed to get an entire house done in a morning, we could do a second house in the afternoon and there was a chance that I would get paid twice.
I also learned earlier at the age of 11, that sometimes you can work really hard and get paid nothing. The only people that understand this are people that work for commissions or business owners. Without realizing it, my brain was getting a real first taste of what it means to be a business owner. But the person that interested me the most was the owner of the company.
Sometimes You Work Hard and Get Paid Nothing
The owner of the company was the hardest working. He was always the friendliest and he was the one with the money. I saw this at an early age and I realized that that was the man with the power. If I wanted to have any control or any power in my life, I would need to become that man. I wanted to start my own business. So my very first business, I started at the age of 18 after seven years of working as a mover.
And like I said, I was a complete nerd who liked playing Warhammer and Dungeons and Dragons. One of the coolest things that I love doing was live-action role play. I’m aware that you’re probably going to make fun of me now, but let me describe what live-action role-plays are in case you don’t know what it is. It’s people playing Dungeons and Dragons by dressing up in costumes with foam rubber swords, running around a forest, hitting each other, pretending to be elves and dwarves and wizards going on adventures.
I’d been doing this for years and started at the age of 15 when I realized there were other levels of Dungeons and Dragons that you could do. My very first business at the age of 18 was organizing live-action, roleplay events for groups of people and it would pay pretty well. I’m going to say pretty well, I could get 200 pounds for a single day of work by organizing a live-action roleplay adventure for bachelors at a bachelor party who wanted to spend the day running around a forest, sitting each other with swords, and then spend an evening out at a strip club the day before they get married.
I would do that two or three times a month and for an 18-year-old guy with that being a job that I could do on the weekend while going to school and working retail during the week, it was a great boost of money. More importantly, I got paid to do something I love, and it was my dad that taught me this lesson, and I’m going to give you this lesson because I think it’s the most important business lesson. So make sure you pay attention and write this down.
The Cliche Is Really True
If you enjoy what you do for a living, you will never work a day in your life. I found that the whole purpose of doing retail was to make money but I did that just to get by. That was just to pay my bills, the sword fighting stuff I did on the weekend I did for love, I did because I enjoyed it. I got paid a lot more for a single day of doing sword fighting than I did for an entire week of working retail. I loved live role play so much that I eventually decided that I wanted my day job to be live role-playing as well.
I found a company that made live-action role-play swords, and they also made movie props. This was my dream company. I begged them for a job day after day after day until they gave in, and gave me a job cleaning the floors and I worked my way up. The problem was this company was in a lot of financial trouble but I didn’t know that, I just knew that I wanted to work there. I knew that I wanted to do this, so I decided once again that I would take it upon myself to fix it.
I stopped running my own events on the weekend and instead on weekends I took over their sales department, which they didn’t have. That meant during the week I was making swords and movie props and got to work on films like Gladiator and Lord of the Rings plus a whole bunch of other cool stuff.
Learning Phone Sales
In addition, on the weekends I would do phone sales where I would phone companies and try to make big sales for the company. I got so good at making phone sales that some of the orders that came in were 10 times larger than they’d ever had before. It’s because I loved the company so much that I learned how to do sales, a new skill that I taught myself. I didn’t know how to do it. In fact, I remember going to bookstores back when bookstores were a thing and buying books in sales and reading them so I could learn how to be better at selling more props.
Unfortunately, the reason the company was in financial trouble wasn’t because they didn’t have money, it was because the owner of the company was misappropriating the funds. He was repurchasing cars and plasma screen TVs before LCD screen TVs. Long story short, he was ruining the company because he was spending the money before we could use it to make props. Essentially we received the money, he would spend it and they would have nothing to fulfill the orders and we would get in deeper and deeper debt.
Eventually, they let me go from the company because they couldn’t afford to keep me and I didn’t have a non-compete. In fact, I didn’t even have a contract because they were doing things in a shady way. So I built a competitive company and one of the coolest things about my competitive company was because I knew how to sell and how to make the props, my company got really big.
I was doing 50,000 euros a month selling foam rubber swords all over the world. My company was called X Caliber. Caliber felt like a bullet and we were the ones that introduced latex swords to America. Up until then, Americans were only fighting with pool noodles covered with a PVC pipe inside and we got them to use these foam, latex, beautiful handcrafted, artistic weapons.
I was the person, with my team, who helped bring them across America. The problem was, I was still in my early twenties and despite having all this massive success, I started collapsing mentally. There was something about this that just didn’t sit right with me. I wasn’t enjoying life. I was running something that was more about being a business than being something that I loved anymore.
What To Do When You Burnout
I wasn’t sword fighting anymore, I was focused on selling as many swords as possible. I wasn’t hanging out with my friends. The long and short of it is I built everything wrong. It was a lot of hard work and it needed me to work constantly. The whole structure of what I built was terrible. I hadn’t followed a successful blueprint, I just worked it all out myself. Even though I was making a lot of money, a lot of it was disappearing. It was going into costs, mistakes, and all sorts of other things.
I ended up letting the business go and sold it for 2000 pounds, a very small amount of money, just enough to get out and not have to worry about it. I ended up moving back in with my dad because I didn’t have any money. I find myself once again, working out what I’m going to do in life. I decided to become a janitor because that’s what you do when you don’t know what to do, you follow in your father’s footsteps.
No Matter What Keep Moving
Now I’m working and sweeping floors, changing light bulbs, and taking the trash out, thinking about the fact that I used to make a lot of money, but I never got to enjoy any of it, because it all went back into the business. I didn’t know what I was doing, and now I have people shouting at me because I didn’t clean the floor well enough.
After that I decided I’m going to get back into doing business again. I worked as a freelance public relations crisis specialist and that’s going to become very important. Make sure you remember that a crisis specialist is somebody that predicts a future problem before it happens on behalf of a company. I did work as a freelancer because I had experience running a company. As I said, there were a lot of complications and problems because I didn’t know what I was doing, so I became really good at seeing problems before they happened.
I ended up getting into dating and if you know who I am, you’ll know that I ended up being voted the number one dating coach in the world three times in a row. I became very well known for dating and because of that, I started to have a successful business. But this time around, I built it in a way where I knew what I was doing. It was scalable. There were systems in place that were processes. Everything wasn’t reliant completely on me.
Starting a Dating Company
Within the dating company, I only did the things I wanted to do, which was helping people improve their life. I realized that’s what I love more than anything. I like helping people more than pretending to be a Knight and running around in a forest. I like helping people a lot more than being hailed as the most amazing person at sword fighting. I love helping people improve their lives.
That’s my number one motivator in life. If I could do anything for the rest of my life, that’s what I would do. If you remember when I said, if you do something you love, you’ll never work a day in your life? What I love is helping people. I like taking problems away from people and making sure they never have another problem or you have a solution to their problems.
The joy that I get when someone says, “Oh my God, you helped me. You’ve changed my life. You’ve fixed it.” is indescribable. The reason is that I grew up in such a bad way and had many problems myself, so it’s kind of like I’m helping the old me, you know? As much as I’d love to pretend I’m altruistic, I’m just helping you, it’s not that, I’m helping you not have to go through the stuff that I had to go through.
Fast Forward to Today
There was nobody there to help me. Today life’s different. I now run seven different businesses that are my own. I consult for 600 CEOs, and 600 business owners I’m a consultant for.
And this is all based on a very simple five-step blueprint that I follow in all of my companies. As long as I’m following my blueprint, I know my company’s going to grow. Everything’s going to be successful and everything’s going to be great. But even when you have a clear blueprint, things don’t always go the way you want them to. Things aren’t always as easy as you want them to be. It’s not always smooth sailing, there are problems, and there are complications that arise.
I’m going to share with you a story about one of my businesses and how I followed my blueprint. But I also want to show you what happened when I deviated from the blueprint. I want to show you that even though I was following it, some problems and issues turned up. What I’m saying is nothing’s perfect, but as long as you stick to the plan, you can get the kind of success that I got. It helped my business during 2020 grow 367% in a single year, and I went from not owning the business at the beginning of the year to it getting me an asset that is worth a million dollars, by the end of the year.
How to NOT follow the SMART Blueprint
From zero to a million dollars a year isn’t so bad. You just have to remember life doesn’t always follow your plan. Even if you have a plan, life doesn’t always follow it. We’ll start with talking about life with monthly revenue of $51 and 53 cents. I’m never going to forget, I walk into the room and I’m like, how much did you say our revenue was for the month? And Steve who was currently managing my business at the time says, “Dude, I said $51 and 53 cents.”
Do you mean we have to survive this entire month, living on $51 and 53 cents? That’s not even enough for a day for one of us, and there are two of us, not to mention all the other bills that we have for the company. This was a brand new business that I had acquired recently. It was a small game store that specializes in selling Dungeons and Dragons products, Warhammer 40,000 products, Magic the Gathering, and a bunch of other nerd stuff.
This game store was based in a small town, just outside of Austin, a place called Bastrop and we’d only been open a few months at this time. He said to me in response, “I’m sorry, dude. I was just following processes.” Now, normally that wouldn’t be that much of a problem because those processes would be things that I had put in place. But this time I made a mistake and I wanted to own this mistake because the processes he was following were created by his predecessor, the previous manager of the store. And the reason that predecessor wasn’t there anymore was because I fired him for failing.
This is what happens when you just follow processes
Basically what happened was I fired a guy for being useless, failing, and not creating new processes for the new guy. So the new guy’s just following the old processes, which were so bad I had to fire the guy. So this is my fault, but when you get bad news, your instinct is often to blame other people. You’re like, no, you know what? This can’t be my fault. You should have created a better process. You want to blame other people, but you can’t, you have to accept ownership in this.
It’s my fault. I was the one that fired the predecessor and I should have made the new processes for the new guy to take over. So that $51 and 53 cents is my fault, no one else’s, not my employee’s fault. Now lots of things led up to this exact moment, and I’ve made some bad choices. Second of all, I think one of the big things was I wasn’t as present as I should have been. As I said, I run seven companies and consult for 600 companies. Not every single one of my projects gets the same amount of attention.
This particular business I’d been neglecting isn’t surprising because it’s the one that I would probably enjoy the most. I was distancing myself from it on purpose so I could focus on the bigger companies, but now I had a business that wasn’t generating anywhere near the amount of money it needed to generate. The biggest problem was the fact that I didn’t take responsibility.
Business Owners Must Take Responsibility… For Everything
As a business owner, you have to take responsibility for absolutely everything that comes under your business. You can try and blame your employees, you can try and blame society, and you can try and blame the media. But the reality is if it’s your business, you are in charge, you are responsible and any failure is your fault.
Now I’ve always said that there are five parts to a successful business and this is my S.M.A..R.T Blueprint. The blueprint that I follow whenever I’m building a business or consulting with another business to help them grow. This is one of the most important things, so make sure you write it down.
S-staff, this is your team, the people that are working with you, you’ve got to look after them. They’ve got to be a good team and they’ve got to be managed because you’ve got to take responsibility. You’re a leader and you lead from the front.
M-marketing, marketing is all about learning what your customers want and finding those people. If you can know what they want and you can find more people that want it, you will always have potential customers.
A-audience, your audience are the people that might be interested in what you have to sell. If I find someone and I know what they want, I’d want to bring them into a group of people that I can communicate with en masse. That is my audience, I find them, I bring them together, and I want to be communicating with them.
R-revenue, revenue is the sales and sales processes you use. How am I going to get money from that audience in a way that doesn’t upset them or make them feel pressured or weird or oversold?
T-testimonials and testimonials are the evidence that what you sell works if you don’t have testimonials or people raving that what you sell actually works then the whole thing collapses and everyone’s going to want a refund.
Failing the First Step
I had failed in the very first task, which was the staff. I had a predecessor that created systems that weren’t very good. He’d told me he could create systems and I could rely on them. But the reality is I didn’t check them, I didn’t double-check them, so that was on me. His systems didn’t work and he got fired because of that. Those systems got handed to the new staff member who naturally followed bad systems, and of course, it failed again. That was all on me, that was my mistake.
The decision to start a new business, grow an existing one, or collapse a business is one of the hardest things to do. I’m now in a situation where this company hasn’t made much money, I’ve got a staff member that hasn’t been trained, and I’ve got a whole bunch of other things that are taking my attention. I’ve got to make the decision. What do I do here?
Do I just collapse this business? Try and grow it? Start something new? What should I do? It all comes down to something that I call “bread and butter”. Bread and butter is the amount of money you need to cover your basic bills, not the amount of money that you’d like to earn, but the amount of money you’d need to cover the bills. Can you pay your rent? Can you pay for your food? Can you pay your phone bill? Can you pay your insurance? Do you have enough money for transportation? The end?
Don’t forget your bread and butter
It’s not your gold subscription for Microsoft Xbox. It’s not buying a video game once a week. It’s not going out for a night on the town once a week. It’s just the basics. You have to have enough money to cover the basics. Now, if you have enough money to cover the basics, however many hours you’ve spent to cover the basics, the rest of your time can be used to grow and make more money.
All that additional money is like pocket money, free-spending, investing it, growing, and doing something great with it. As long as you have the bread and butter covered, then you can always do something else. For example, if you have to work a 40-hour week at a job to make enough money that just covers your bills, the rest of your time outside of those 40 hours can be used to grow a business.
There’s a great phrase that I often share with my friends, which is that business owners are the only people in the world that will work 80 hours a week to avoid working 40. It sounds crazy, but many business owners don’t make as much as salaried employees; they’re working overtime. They don’t have to go and get a job for 40 hours a week. Many of those business owners would probably be better off working a 40-hour week, getting a really good salary, and then spending 20 hours a week, starting a business on the side.
What do you do with your extra money?
What you can do then is that the extra money you make is pocket money or bonus money. Then as you grow that business through systems, not working extra hours through following a S.M.A.R.T Blueprint or a plan, not working around the clock, 24/7, that business should start to grow. As the business grows, you’ll get to a point where you make enough money reliably from the business that you may want to consider quitting the day job.
At that point, you lose the 40 hours of work that you needed for your bread and butter. The 20 hours of work you’re doing every week is paying for the bread and butter with maybe a little bit extra. Now you can add an extra 20 hours a week into the business. You’re not only working a 40-hour week, but your bread and butter are also covered, and you’re making more money.
One of the biggest revelations that Steve had, which is the staff member that was running the store, was recently when the business started growing and making very large sums of money. In fact, at the time of recording this, we did $20,000 in the last month alone from that one business and Steve said to me, but I didn’t work any extra hours. And I was like, of course not because we don’t get paid by the hour in the same way that when I was a mover, I got paid by the job, not by the hour.
Don’t Work for Money By The Hour
That meant the number of jobs I could do in a day dictated how much I earn, not how many hours I worked. If I worked on one job and it took me 12 hours, my tips were probably going to be less. I’d get paid less because I didn’t move very fast. On the other hand, if I ran and moved faster than I could and maybe fit two or occasionally three jobs in a single day, I’d get paid triple for working the same amount of hours.
Now, sure I’d be working harder in that situation, but that’s because I didn’t have any systems. When you build a business, if you base it on systems, you can scale them up and make more money as you go. If you already got a job and you’re working 40 hours a week with enough money to make your bread and butter, then what can help is to put aside an amount of time every day to build the business.
For example, you could say you’re going to work an extra two hours, five days a week on a workday and one day on the weekend, that’s not a lot of extra hours. It’s 18 hours of extra work a week, two hours a day for 10 and eight hours on a Saturday, but it still gives you plenty of free time. You have all of Sunday free and you have all of Saturday afternoon and evening free. You can still go out and your work day is only two hours extra every day.
Get Up Early and Work Before You Work
If you’re willing to maybe wake up earlier and do those two hours in the morning, which is what I’d recommend, it won’t even impact your evenings. You still get to your evenings, except maybe you’re going to bed a little bit earlier to make sure you get some good sleep before the next day.
Either way, this is a very easy way to make it work in that particular month. When we’d only made $51 and 53 cents, I had to take money from my savings to pay Steve and to cover all of the costs or the bread and butter of the business to cover that bad month.
While that solved the problem that we had at the time, you can’t do this forever. I’ve seen so many businesses pull from savings, pull from whatever cash they can borrow to try and keep a business afloat. You do not have a business if money is coming out of your pocket to keep it afloat. I didn’t realize this at the time when I did that, but I was putting more than just my savings and my finances on the line. I was putting a lot more in jeopardy than I realized than just that money.
At this point, I’m faced with a very clear decision. I can fold the business or I can double down and make it grow. For me, there was only one clear choice. I need one thing I could do in this situation, and for that, I want to ask you, what would you do for your children? My son looks at me and he says, dad, fix it. Now, this is a few months before the situation I just described, my son came home on Wednesday night and he’s got tears running down his face.
Dad, fix it….
He’s like, “Dad, fix it, please fix it!” I’m like fix what bud, what’s wrong. He’d just been playing Dungeons and Dragons at the local game store, we had a small game store in town where kids could go to play Dungeons and Dragons and he was upset. He’s like, “They’re closing the game store. You fix businesses, fix it!”
Now I’m used to fixing big businesses. The companies that work with me make seven, sometimes eight figures a year. I helped a client last week buy a new business for 6.5 million. One of my other clients does $42 million a year. In fact, I just helped a big shipping company that does $165 million a year. These are the kinds of businesses that I fix. This situation was a tiny little gaming store in our local town that collapsed in.
But it was a very real problem because we live an hour away from any major town that has a game store. That one little game store is the only means of entertainment for a lot of the nerdy teenagers and younger kids that live in our local area. If you remember anything about my childhood, that escapism and imagination, those nerdy board games mean a lot to me. So the kids struck a chord.
I had two issues here. Number one, I was not going to let the only source of entertainment for the local kids that wanted to play board games and other nerdy games in the area disappear. And two, how the hell can I call myself an expert in fixing businesses, if the first time my son comes to me and says, “Dad, can you please fix this business?” I tell him no? So for me, it didn’t matter how small it was, I had to win. I had to be my son’s hero.
This particular game store sold many different products. It sold Pokemon, it sold Yugioh, it sold Dungeons and Dragons, Warhammer 40k, and it would rent out space to kids to play video games, plus a few generic board games. But for this particular business, the business was built really badly. They were losing $1000 every single month and it was getting harder and harder for them to stay alive.
Making less money every month isn’t good…
Imagine going to work every day, busting on a 50-hour week, and at the end of the month, you’re $1000 lower in your bank account than you were at the beginning of the month. This was just getting worse and worse and worse, and the guy didn’t know what he was doing. The good news is the investment in a business that doesn’t make any money is very low. There’s no point buying the actual business itself because it’s a failure.
Most of the time, you’re buying the assets, which in this case was the stock, the things that they had for sale, which was a bunch of products no one wanted. It was a bunch of board games that no one played, a bunch of old editions of things that weren’t even usable anymore. It was just a whole bunch of stuff no one wanted, but the guy that owned the business couldn’t leave unless somebody bought all that stuff and no one was buying it. So he was stuck.
Essentially what I would be doing is buying all of the inventory left in the store and starting from scratch. I’d use their point of sale system, which is the thing they used to check out and take over the rent and all the bills. This is a crazy situation to tie myself in, but it also wasn’t too much money to do it. I knew in taking over this situation the fastest route to money is to focus on selling the solution to the problem that your largest audience has.
So in this situation, the audience was obvious. It’s the customers that come to the game store. That’s the first thing we want to do. The problem was their store was going to close. This is known as an opportunity, whenever you’ve got a group of people that have a problem where you can see clearly what that problem is, and you have access to that group of people. If you can spot the solution and you can provide it, that’s an opportunity. That’s one of the fastest ways to make money.
Spot the Solution and then Provide it
Now, it is a lot easier to do this than it is to start a game store completely from scratch in a new area. For example, if I had to completely start a new game store, I would have to find all the inventory myself, get all the shelves in, put in the point of sale material, I’d have to find the location of where this thing’s going to be. Then I’d have to let all the people in the area know that I’d opened up or hope they would walk past my store and walk in!
That’s a lot harder than the situation I was presented with. This situation looked pretty good. Normally when I start a business, I follow the following plan. I’m going to give you the plan I normally do because I know the fastest route to making a successful business or making a business successful is to bring in sales first. What I do is I let the business evolve based on that initial money. So if I can get a bunch of sales, I can take that money and I can develop the business and make it better.
Now let’s say, you’ve got a dream to make a theme park like Disney world, or maybe you’ve got a dream to create the best training program for athletes. You want to help top Olympic champions or maybe you’ve got a dream to make the best cake decorating company in the world. Or maybe you don’t know what you want to do at all. If you do not already have an audience, a market, or a bunch of people to get it started, you are going to fail and you’re going to struggle.
It’s often better to start with what you’ve got and then reinvest the money into building what you want. For example, I might like the idea of generating a massive theme park, but I’m going to have to get a hell of a lot of money and I’m going to have to find a massive audience, which could be difficult. What I could do instead is run a one-off Halloween experience like a corn maze or something like that. I could create it for a local community, maybe in like a local church or a local school that way I’ve already got an audience.
While that’s not going to make me lots of money, it’s going to give me some really good experience at running an event. I’m going to have to deal with things like insurance, and ticket sales and it will still make me a little bit of money that I can use to reinvest to start moving forward. After I do more and more of these Halloween events to make the whole thing bigger, who knows, in the future, I could build a Halloween theme park.
Creating a Training Program
If I wanted to create a training program for top athletes, I probably wouldn’t know any top athletes or have lots of clients, so I’m not going to make a lot of money. But I could help out athletes at a local school in a rising sports team, maybe a local youth football league. Then if I can help them increase and succeed, I can take those testimonials and the evidence. I could even charge some money to do some additional coaching outside of the season. Use that money to expand my growth into other areas and help more people and help get to where I want to be.
Or if I wanted to create the best cake decorating company in the world, instead I could run cake decorating parties for local communities. I could reach out to moms in the area to create happy birthday cake decorating classes to get the supplies and the money that I need, and then I can expand and grow.
So it often makes a lot more sense to find the community you’ve got access to work with, start the business in the best way you can, and then build it up and grow it. Now, if you have no idea what you’re going to do, and you’re like, I do not know what business I’m going to start. Then the best business to start is a business that is needed but no one else wants to do because they always make the most money.
Any service Business
For example, garbage collection, window cleaning, car cleaning, where you go to someone’s house and clean their car, lawn services, all the stuff that isn’t glamorous, cleaning houses, the stuff no one wants to do. If you’ll do that, it’s faster to make money that way then you can take that money and reinvest it. Plus you can always hire somebody to take over or you can sell the business once you’ve built it to generate cash. So if you don’t know what to do, it’s usually better to do something that’s needed but isn’t glamorous.
Now in this situation, I already had an audience. I had a bunch of people that wanted to play Dungeons and Dragons, Warhammer, and Magic the Gathering. I also had the product or service they wanted, well, I didn’t have the exact product they wanted, I had the old one they didn’t want to buy anymore, but I could get access to it. But I’ve never run a retail store, so before I could run this, I had to filter this through a system I’ve created, which are the 10 different business models to see if there’s an opportunity I’m missing before I work into a business. I don’t want to go in thinking I know exactly what I’m doing. We’re going to do this because everything’s coming from my head, I’m inventing on the spot and it might not be good.
There are only 10 Different Business Models
It’s much better to be more open-minded about it. Take a typical business model like this situation, a retail store, and see if I can change it up a bit by fitting a retail store into 10 different business models. By the end of it, I may find that the original retail model isn’t the best model to use and one of the other 10 is better.
For example, in the hairdressing salon, if you go and get your hair done at your local barber, that is usually a service. You go in, you pay them to cut your hair, they cut your hair and then they’re done, but we could use a different business model. What if instead, I used the subscription or gym membership model in this situation, I would get paid a monthly fee to cut someone’s hair once a month, but I get paid whether they come in or not now considering most people tend to forget to get their hair cut regularly. I’m going to receive my fee for cutting their hair and if they don’t turn up, then they’ve missed out.
If they’re on a subscription, they could come twice a month. They can come once to get their hair done once to get a touch-up. Essentially, they’re going to get two haircuts for the price of one, if they’re on the subscription. I know that some people will take that and many people will be lazy. Some people will take two, some people will take one and a whole bunch of people will get one every other month. Either way, I’ve got guaranteed income, whether people come in or not, which means in the case of a government lockdown, I’ve got a good chance that I’m still going to receive subscription money and maybe work out a way that I can do remote haircuts or come up with a solution to that problem.
I can also tell people that if you do cancel your subscription during this time you can sign back up again later on, but it might be a little bit more expensive if you do that. If you’re willing to support me during this time, by keeping your subscription open, then when we do come back up, I’ll give you a whole bunch of products to say, thank you.
There are ways you can negotiate in that situation, and of course, some people may say no, but some affluent people may say, you know what, keep the subscription going. I want to support you during these times and I look forward to getting the free goodies when you open up. Being willing to have that conversation can keep you alive, so for a hair salon, the subscription model might be better.
So I took the retail store and I plugged it into all 10 of the different business models, and I’m going to share all 10 of those business models with you. These are the only 10 business models that exist in the entire world. Not all of them are going to apply to any business that you want to do, but you can plug it in, and you’re like, that’s just weird, that’s not what I want to do, that’s fine. The idea is to get your brain thinking of all the different ideas.
Rent Something You Own
The first is to rent something that you own. So this could be, if you have a home, you’re a landlord and you rent out the use of a home. It could also be if you have a car and you rent out the use of your car via one of those car rental apps, but it could also be you buy an expensive piece of camera equipment or 3d printing equipment, and you allow people to rent it off you because they don’t want to spend a lot of money to own the device. They just want to use it as a one-off.
Buy Low and Sell High
Renting something you own in this situation, he was renting out the gaming area to kids that wanted to play video games. So he already had a model like that and I could look at that and say, “Okay, that is a potential business model I could work with.” Next, the second business model is to buy low and sell at a higher price. So this is when you buy something in bulk and then you sell off the individual items. I’ve always thought that if I get completely bankrupt, one day, I will go to Costco, pay for my membership, and buy a giant thing of small bottles of water for $3. Giving me 24 bottles of water I’d stand by the side of the road in the hot sun, selling those bottles at a dollar each and convert $3 into $24, which by the way, is a better return you’ll get on almost any stock exchange in the world.
Then I can start building up my business again, the reality is because I know how to think like that, I’ll never find myself in that situation, but it’s always good to be prepared. That’s that crisis public relations person coming out of me, I can’t help but think about a worst-case scenario. I was considering this situation, doing that at a later date.
For example, paint brushes are something that people tend to use a lot of when they’re painting their Dungeons and Dragons or Warhammer figures, and rather than selling the paint brushes that existed elsewhere in the world, which can be quite difficult to get hold of because of supply chain problems. I thought it might be better if I just manufactured them myself and sold them in bulk or bought them in bulk and then sold them at a higher price.
Sell or Negotiate Something You Don’t Own
That was one of the models I came up with and to this day I haven’t done that one yet, but I have developed it and it’s something I’m looking at rolling out in the future. The next business model, the third one is to sell or negotiate something you don’t own. This would be, for example, a realtor, somebody who is selling something that they don’t own.
This is something I thought about with Magic the Gathering. Magic the Gathering is a card-collecting game where you play a wizard who tries to defeat your opponent, but the cards have an inherent very high value. In fact, some of the cards go up to $100,000 for a single card. That’s the black floaters, which is known as the rarest magic card of all. Now what was interesting about this is I thought I could do consignment and we did.
What we allow people to do is we allow them to purchase a folder and restore their folder in a safe in the store. When somebody wants to buy a rare card, they can come and look through the folders of other people’s collections, and we will sell that card on behalf of the person that owns the card in return for a portion of that sale. This has been a very popular business model in the store and a lot of people come and bring us entire collections. The only rule we have is they can only bring very rare cards we don’t have in the store. So we only sell the most exquisite and rarest cards on behalf of the client, which has been a great model.
Publish or Produce Something
Next up, you have the publishing or producing model. This is where you publish someone else. You may think of this as a book publisher who publishes authors, or maybe a producer, like Sony records that produces music artists.
Now, for the game store, this would be like publishing a new board game maker. If there was somebody that invented a new board game and no one knew about it, we could help them get the word out about their game and get publishing rights to it. We would be the ones focused on selling in our store and trying to sell distribution to other stores. It was an interesting idea, not one of the ones I was that interested in, but it was worth writing down.
Buy a Franchise
Next, I could buy a franchise. A franchise is somebody who has an entire business-in-a-box system where you pay them an amount of money and they give you their brand, their marketing, and their aid, to run the business. They help you set up the whole thing because you’re buying a franchise. It’s a lot more reliable than trying to do it on your own because you’ve got the help of some very experienced people who have set up other franchises like yours elsewhere. You can follow their business model and of course, the profits come in.
From a game store perspective, one of the franchises that exist in the world is a place called Game Kastle and the owner of Game Kastle is a good friend of mine. It occurred to me to just contact my friend, buy a Game Kastle franchise and turn the entire store into a Game Kastle franchise. But this will take a large sum of cash, and while I valued my friend’s experience and I do like the franchise, I’ve worked with larger companies myself. The challenge of doing this completely on my own was far more interesting.
Create Something Physical or Digital
Next, you can manufacture or create something physical or digital. So in this situation, manufacturing something could be, manufacturing our own game rather than publishing someone else’s. It could be setting up the ability to manufacture paints or something like that, but we can also create something digital, like training tutorials on how to paint things or how to play games or how to get your family playing Dungeons and Dragons. We liked that, either creating our own training tutorials, or as I said earlier, creating our own paint, so manufacturing something was an option we could consider, also we could sell your services by the hour.
This will be like a freelancer, somebody who does an exchange of services by the hour. One of the things that we thought about for this is that we could do painting tuition so we could charge people to teach them how to paint and organize classes, or we could organize a summer camp. So we could invite people to come in, and drop your kids off with us during the summer. During the day you go to work, pick them up at the end of the day, and they’ve been playing board games all day. That way the parents don’t have to worry about their kids being bored at home and the kids get to play board games.
That’s one of the business ideas that we’ve thought about and if there hadn’t been a global pandemic, I suspect there’s something we would’ve done over the summer. But due to the pandemic happening that business model isn’t something we could do when you’re looking at selling your services by the hour, this can be a trap. However, a lot of business owners do this, you want to, as often as possible, be able to sell a single hour to multiple people, rather than give people one-on-one attention.
If you sell one-on-one attention, you’re just giving yourself another job. Even if you’re charging $50 an hour, if I can only work with one client, you’d need a second client and a second hour to make $100. If my business model is designed in a way where I can have two clients in the same hour and I teach them the same thing or do the same work for both of them, I can get paid a hundred dollars with two clients for one hour. That saves my time and it is what we call scalable.
Make sure your business is scalable
Whenever I charge by the hour, I try to make sure it’s something that can be done for an entire group. For example, I’m not doing one-on-one painting lessons, I’m doing group painting lessons where you could have 50 to 100 people in the same room, in a seminar style, all learning.
The benefit of this is they pay less because I don’t need to make as much money from a single student and I can work less and get paid more per hour. That said, doing something like a summer camp where you get a whole bunch of kids in, you’ve got guaranteed income for as long as they’re in the summer camp, with the bonus of having as many kids as you can fit, providing enough observers to look after them.
Retail Something Direct to Consumer
Next up, you can retail something direct to the consumer. This is literally just having the shop in this situation. That’s the obvious business model. I have a shop and I retail things to the consumer. I buy multiple things from different distributors at a discount, display them in my shop, and help people buy them.
Network Marketing
Another model and this is the ninth business model is network marketing. Network marketing is where you sell products for a company via organizing events. Now, a lot of people back in the day would call these pyramid schemes, then they shifted to multilevel marketing, but essentially it’s the same concept.
One company has manufactured a product and you will organize networking events or parties to show off that product to try and sell it. Not really a business model that I’m interested in, but it’s worth mentioning because it’s one of the 10 business models that exist in the world. We could do that, organize selling paints or something like that. But again, not something I’m interested in.
Subscription Model
This brings us to the 10th model and it’s one of my favorites, and it is the subscription model. This is your box service, like the Dollar Shave Club or Stitch Fix where you pay money every single month to receive a box of goods. You don’t choose what you get, you get given it, but you trust the company so you don’t have to make the decision. Gym memberships are another example. You pay for the gym equipment, to be able to go and use it whenever you want, but you pay whether you use it or not.
Now, this is something we considered doing by sending people prepackaged, Dungeons and Dragons quests. We’d write the quest and every month send you a new quest for you to go on an adventure with your friends. We thought it was very obvious that I was going to be doing the retail model because it’s a natural shop. However, when you grow a business, it will sometimes take you to new models.
As you’re about to find out, by the end of today, we ended up shifting to a very different model which ended up being very successful for us. That’s why this month, at the time of recording this, we did $20,000. But this exercise is what made me aware of all the other business models and they just got stored in the back of my head as I went out with the first one.
Don’t be afraid to shift models as you learn
If you remember what I said earlier, you want to start with something that is easy and can be done quickly. Then you can evolve into a better thing later. So in this situation, I took my money from my savings, and off I went and made it happen.
What model do the coaching programs fall into? Actually, your coaching program could technically be all 10 if you think about it. You could have a subscription coaching program. You could charge by the hour. You could do network marketing where people come to a party, that’s what they do for housing coaching. When they teach you how to buy houses, they invite you to a seminar to learn about houses, and then they sell you on their housing coaching.
So all coaching can be all 10. In fact, any business model can be all 10. That’s the important thing to know. You just have to choose the one you want to do. You could do email coaching where you just send people one email a week and they spend $5 for a single lead.
To listen to the full episode of the most comprehensive podcast about strategically building and growing your business, the S.M.A.R.T way, click on any one of these platforms and subscribe!
Links
- Network Marketing
- Subscription Model
- Dollar Shave Club
- Stitch Fix
- Direct to Consumer
- Game Kastle
- Franchise
- Publisher
- Producer
- Magic the Gathering
- Warhammer 4000
- Dungeons and Dragons
- Costco
- Disney World
- Halloween
- Stage Mega Drive
- Pokemon
- Bastrop
- Public Relations Crisis Specialist
- Gladiator
- Lord of The Rings
- Microsoft Xbox
- S.M.A.R.T Blueprint
