I must say, it's been awhile since I've posted here on Warrior Forum. Over a year, in fact! For those who don't know me, I spent quite a bit time on here in 2011 when I was running my offline business. Probably my most popular post that gave me credibility here on WF was The reason you HATE COLD CALLING is because you're lousy at it... Here's how to change that TODAY! (Although it's over a year old, I recommend you check it out as the information in it is timeless!)
At any rate, some of you probably noticed less and less of me in late 2011 and my complete disappearance in 2012. Well the truth is, I wasn't making the kind of money in offline marketing that I really wanted to be making and I drove my business into the ground.
This may come as a surprise for those of you who knew about my business. Myself and a partner had about 60 clients who I had sold mobile websites linked to QR Codes or who we sold Text Messaging to. Each client was paying us between $20 and $400 a month, with the average being $150 a month. Business wasn't too bad as we were grossing about $9,000 every month ($108k / year). However, as much as $9,000 a month may sound to some of you, it really wasn't that much after expenses and taxes and splitting 50/50 with my partner.
Taking all the costs into account and then splitting with my partner, I was personally netting around $2,000 a month. This was enough for me to pay my bills and survive, but nowhere near the amount of money I previously made while working as an analyst for a finance company. Plus, I was seeing that my business had reached a peak at due to the number of clients we were servicing. It became more and more difficult to acquire new clients while maintaining what we had already built.
At this point, I found that I really didn't enjoy the "servicing" side of the business as much as acquiring new clients. Neither did my partner. We started having disagreements on roles and responsibilities that we hadn't previously laid out. My partner and I were entering a new phase of our business and quite frankly, we weren't ready to scale. We were both barely getting by on the money we were making, so bringing on employees just didn't seem feasible.
Looking back, this was where we blew it. Rather than dig our feet in and really make it work, we lost our motivation and momentum, and ultimately decided to stop working on the business and look for jobs that would provide us a higher level of steady income. This was one of the hardest decisions I ever had to make.
This post has already become longer than I originally intended, so I'll spare you the details of the specifics of wrapping things up, but needless to say it got messy. Long story short, my company essentially became one of those fly-by-night businesses that has given the offline marketing industry a negative reputation.
Now I didn't write this confessional post to get scolded by more experienced marketers. Nor do I want it to discourage other people from getting into the business. I hope that fellow Warriors can learn from my experience and not do the same thing I did.
SO WHAT ARE THE TOP 5 THINGS YOU LEARN FROM MY FAILED BUSINESS?
- Constantly acquiring new clients isn't necessarily the best way to grow. Servicing a large amount of clients takes a lot of time and effort. Once you have a base of 10 or so solid clients, focus on pleasing them and selling them more services. Your goal should be to have enough diversity of clients that you aren't solely dependent on any one client, but not enough where you can't provide the customer service they deserve.
- Prepare to scale and grow. If you really want to take your business to the level where you will not just "get by", but you will actually make a lot of money, you will eventually have to hire employees. You can outsource for awhile, but there will be a point where you will need to bring people on board locally to really grow your business. Know that this is coming and don't spend every penny you make while you are getting towards that point.
- If you have a partner, clearly outline your roles and responsibilities. Make sure you identify future roles and responsibilities in anticipation of growth. It can be exciting to enter into business with somebody, but just like a marriage, you aren't always going to be in the honeymoon phase. Clearly identifying roles and responsibilities up front will help mitigate future disputes.
- If things start to go downhill, don't just abandon your clients. The never-ending phone calls, angry e-mails, and stress of knowing that you let people down who put their trust (and money!) in you is just not worth it. This is my biggest regret and I still am dealing with the fallout to this day.
- Don't give up!! When the going gets tough, and believe me it WILL get tough, you need to dig in and make it work. To be successful in offline marketing, you need to recognize it is a marathon, not a sprint. I look back now and often wonder how much I would have grown my business over the last year if I hadn't given up. I have been fortunate to find a job that pays me very well, but I keep thinking that there is a breakeven point where if I would have continued my business I would be making more money.
I really hope people here find value in this post. I understand it can be a little discouraging to hear about a "failure", but there is a lot that can be learned from failure.
Also, as with everything, there is a silver lining for me personally. As I mentioned above, I was able to very quickly find a job consulting in the energy business. I really enjoy the work I currently do, but even better I have been able to continue to make some money in the offline marketing world. Rather than sell mobile website or Text Messaging Services, I have been making good 'ol fashion websites in my spare time. Rather than go for lower priced monthly residuals, I have been charging in the range or $4,500 for a few different websites I've built over the last year. All of these have been from referrals from existing business contacts (the few I didn't completely alienate!).
I'd like to now open myself up to questions from my fellow Warriors... If you'd like to ask me anything or clarify anything I've said, please respond below. Or if you have dealt with failure yourself, and can relate, please share your story. There is lots that can be learned from others' experiences-- good or bad!