How to start a business and quit your job
March 21, 2014
I made $3,500+ in less than a week and will show you how to do the same
Late last year, I started a jerky business in 24 hours, made over $1,000 in profit, and showed you that there’s nothing stopping you from starting your own business.
However, I still see so many of you hesitating to take that leap in starting a new life and getting the financial freedom you’ve always wanted.
So last week I gave myself the goal of making $3,500 (this is how much I spend on a month of rent + general living expenses) so I can “quit my job”. I’m still going to continue to run AppSumo, but I wanted to prove to you that if you really want it ... you can start a business and quit your job.
This is based on the framework for starting a business that we teach in our How to Make a $1,000 a Month Business course.
Here’s exactly how my week went and the actionable steps I learned so you can follow what I did and start your own business:
Monday: Trying to think of an idea and hesitating to start
I spent the majority of my first day figuring out which type of business to start.
I had one idea that I really wanted to try out. A couple of months ago, I organized a taco bike tour around Austin where we biked around town and tried different tacos. We had 15 people show up and it was a blast. Boom, sounds like a potential business idea :-)
Well, instead of seeing if I could get 3 paying customers and validate the business, I did a ton of wantrepreneur stuff like:
- Running different ideas through my head and debating which would be more successful
- Tons of hesitating and self-doubt on whether this business would actually work
- Spending tons of time just asking people what I could help them with and bouncing from idea to idea
So I closed the day with way too many ideas, a ton of doubt, and no customers or money :-(
I spent the whole day hesitating and trying to plan everything out so it would be “perfect” when I actually started the business. Sound familiar?
Have you ever delayed starting because you weren’t sure if it was the right time? That hesitation is your fear of failure. You may be scared things won’t work, that your friends will see you fail. But if you continue being afraid of failing, you’ll never have the business and freedom you want.
At times like these, you need to take action.
Takeaway: Don’t get caught up in all the small details and over-planning. Focus on taking action and actually getting a paying customer.
Tuesday: Validating my idea and getting my first customers
I woke up Tuesday a bit more encouraged to actually make some money.
I took my initial taco bike ride idea and first set up a basic budget to determine how many taco tours I’d need to do to make the $3,500 a month.
Here’s what my budget looked like:
Takeaway: Every business I’ve started, I ALWAYS budget to ensure the economics make sense. Do not spend a ton of time on this but at least make sure the revenue/cost structures are sound.
After making a basic budget, it looked like it’d be pretty hard for me to get to the $3,500 selling tickets at $15 per person. That’s 286 people I’d have to sell in a few days.
It seemed unrealistic to fill my weekend and sell that many bike tours. I also pitched this concept to a few friends and most said they’d just bike themselves to the taco locations :-(
I then thought of what I would love to do instead of taco bike tours. I love craft cocktails and so do a lot of my friends, so I thought ... what if we went to a cool local bar and had a bartender teach us how to make a cocktail?
The real thing at this point was to just start. I could convince myself so many times how everything including taco bike tours and other ideas wouldn’t work. But if I continued to do that, I wouldn’t get anywhere.
I realized, if I actually want to start a business and make this happen, I need to start somewhere.
So I started with asking the guys I work with if they’d go to a cocktail event.
A lot of people ignore that they have potential customers around them all the time. You don’t need social media accounts and followers to make sales and start a business. You have coworkers, friends, family, and others who you can sell to.
Chad and Anton were instantly in and both PayPal’d me $25 each. Cha-ching, got my first paying customers!
Eric at the office said no, which was actually great. Not everyone will want what you’re offering. You will face rejection and you'll have to get over it.
So how did I decide to price this at $25?
- I figured I could pay the bar $10 for a drink + class and make $15 / person. That’s 233 people I’d need to reach to hit my goal which is still a lot to sell but I wanted to get momentum going.
- I asked myself what price would I want to pay? If I included a specialty cocktail with the event (usually $10), I’d be comfortable paying $25 if I get a cocktail + learn from an expert bartender in a cool environment with friends.
Takeaway: Make your first sales to those who are close to you, your friends/coworkers/family.
Okay, I got a couple of sales under my belt. Here’s what I did next to get more sales:
1. My favorite method for selling is through phone calls, texting and anything live chat (Gtalk, Skype, Facebook Messages). This helped me sell the first 5 tickets to the Cocktail Crawl.
2. For the people who bought, I wanted them to refer their friends. So I made an event on Eventbrite to make it easy for anyone to buy a ticket.
3. Created a Facebook event for the Cocktail Crawl.
One of the nice features of a Facebook event is you can search a location and then invite all those people from that respective place.
4. Posted on Facebook/Twitter that I was holding the Cocktail event. That unfortunately didn’t sell many tickets :-(
5. Posted on Yelp, Craigslist, Reddit.com/r/austin. This generated some attention but not a lot of sales.
After all this, I had sold out of the 25 tickets for the event within 2 hours. Most of these sales were friends and then referrals from these friends. Direct sales worked best while passive selling through social media didn’t get me much.
The referrals worked so well that after selling out, I had people beg to set up another event. So I did and sold another 13 tickets. 38 total, booya:
Notice how I didn’t worry about finding a bar and all the logistics before starting to get sales.
Takeaway: Get your first paying customers before worrying about building a product/service and spending a ton of time and money. You can worry about that once you actually have money. And don’t be scared to try different ways of getting customers. You never know what may work best. For me, it was direct selling and referrals.
After selling out of tickets for the event, here’s how I secured the bar:
I picked a Wednesday to do the event as I assumed that this is a slow night for most bars. And if I can bring in 25 people who will spend more money at the bar, that should make it a no-brainer to get a bar to partner with.
I called drink.well which is one of my favorite bars in Austin and told them I wanted to bring them 25 paying customers.
Then we discussed the economics and confirmed availability on the date I was aiming for. They were excited about the idea of bringing in people on a slow night and were on board. Score!
Takeaway: When selling or trying to partner, spend the majority of the time figuring out how to help them best reach their goals. The bar wants revenue so I asked what would make it amazing for them.
For the event, we agreed I'd need to pay them $10 per person to make it worthwhile for them.
At $25 per person with 38 people = $950 revenue. $950 - $380 (cost for 38 people) = $570 profit for both cocktail events.
Booya, I made some money! But still have a lot to go to reach my goal :-(
Wednesday: Getting stuck
The problem after Tuesday was that I was still $2930 profit short of hitting my goal.
Frankly, this bummed me out and I mentally conceded that I wouldn’t hit my goal.
So instead of trying to get more sales, I started getting distracted and focusing on other ideas like:
- Hosting recruiting events at cool bars for companies
- Doing a marketing workshop for a local speaker. (I even cold contacted a local speaker and progressed a bit but didn’t know his skills well enough to promote for him)
- A twice-weekly gentlemen’s club where we do drunk chess and build wooden things
Wednesday night I was having dinner with a friend when I heard my attitude:
“This won’t work cause blah. This won’t because blah blah.”
Basically, it was excuse after excuse after excuse.
I wasn’t even trying. In our "How to Make a $1,000 a Month Business" course where we give the framework to start your own profitable business, I can instantly tell when someone won’t be successful.
They want a magical answer for a situation or they magically want everything to be done for them.
What they are missing is that starting a business takes hard work.
I myself was suffering with this laziness. I wanted the money but wasn’t really doing the work. I was convincing myself all the reasons why things weren’t working out.
That evening I had dinner with my friend and they asked if I was really doing this as if “my life depended on it”. Was I really doing everything possible?
Honestly, I wasn’t. I was making excuses and not putting my all into making this happen. So I ended the day fully committed that I would give it my all on Thursday.
Thursday: Getting to work and expanding the marketing
On Thursday morning I talked to one of the customers of my cocktail event. I asked him why he bought the ticket and what other kinds of activities/things he’d want to go to.
Takeaway: If you are unsure what to do next/how to grow, go to your customers and figure out how else you can help them.
I told him how I was doing this one event but I needed to 10x revenue. He then said ... “If this first event sold so well, why don’t you make 10 different events and sell tickets to those?”
Hm ... good thinking. I can make a ton of events and sell tickets to all of them in one day.
Then my mind started going, “But what about the logistics? How would I make all the events happen?”
Again, I was hesitating instead of taking action.
So we brainstormed events we’ve gone to in the past and ones that we would love to do:
- Smoothie + Yoga party
- Go shooting at a gun range
- Try out 3 burger places and find best burger in town
They all solve the problem of bringing people together for fun activities.
So with some vigor in my step, I made a new Eventbrite page.
To begin selling tickets, I made a list of all the people and companies to track how many sales I'd need to hit the $3,500 goal.
Here’s some marketing methods I started with:
1. Searched all friends on Facebook who live in Austin and approached them about buying tickets:
2. Emailed/messaged/texted/called all friends on my list and others I could think of that would enjoy fun activities.
Instead of spending valuable time and trying to find strangers that would enjoy these activities, tap into your own network first. And try to contact as many people by phone/livechat.
Takeaway: Avoid passive communication (email etc.) where you are waiting on the other person. Do most of your sales by phone/live chat/text where it’s easier to encourage active communication so decisions can be made in real-time.
3. Contacted people who have companies and can buy these experiences as gifts for their employees.
If you don’t currently know business owners, just remember that probably ALL of your friends work at some business so you can get referred to their boss/HR manager.
One of the hardest moments happens when you hit the limit of your “friend circle” when you’re selling something.
So here’s what I did and what I learned:
1. Referrals are super effective. After someone bought, I asked “Who else should we invite?” This worked well and drove a ton of random people who I don't know at all to buy since it’s a natural question and people don’t want to go to events alone.
2. Actively promote to groups you are a part of. You can do this to your Church group, Facebook groups, email lists and more. I contacted my apartment building's email list.
If you’re not currently in any groups, start participating in them by giving and helping people. The connections you get from these groups will help you ten-fold in the future.
3. Being niche helps. At first I was bummed because I didn’t start a business that appealed to all my friends globally. However, by focusing on events for hip professionals living in Austin in their mid 20’s-30’s helped me narrow my focus. This saved me time in figuring out which events would work best and who to sell to.
Here is an email template I used to get sales from friends and referrals to get new customers. Obviously this is casual because I am talking to a friend vs. a stranger.
im doing these events, LOVE for you to come: atxme.eventbrite.com
you know anyone else i should invite or groups to send to?
Here’s the template I used to sell to businesses who I assumed could bulk purchase as gifts or perks for their employees.
Subject: Perk for your people
http://atxme.eventbrite.com. Setting up really unique events. Be awesome if you grabbed some for your people.
Only selling tickets today.
What do you think?
Don’t think just cause you email friends + family they’ll instantly buy. I got rejected so many times throughout the day and had to just keep moving forward!
Momentum is your best friend. One of the things with marketing or starting your business is creating a tornado where your target audience is hearing about your service or product multiple times at once. The more narrow your customer persona is, the easier it’ll be to find out where they are online or offline.
A few things throughout Thursday that accelerated sales for me:
1. Urgency. I only sold the tickets for one day which I made very clear in the copy. I also had a timer on the Eventbrite page so people would want to take action and buy.
2. Feedback. ANYONE who said they weren’t interested in buying, I asked “Why not?” This helped me retool the way I presented the event and clarify things for future customers.
3. Increasing average order size (bundling).
Originally I was selling 1 experience for $25 and group discount where if you bought 5, you’d get 3 extra for free.
But what was happening is 90% of people were buying the single ticket.
I realized I wanted to increase average order size and so I added another “friend discount” bundle where if you bought 3, you'd get an extra for free to bring a friend. This made a huge difference as bundles ended up accounting for over 60% of total revenue.
4. Sales approach. To the people who I approached and wasn’t sure if this was a good fit for them, I used a different sales approach. I didn’t sell them hard but instead asked their opinion: “What do you think of this event? http://atxme.eventbrite.com”
This was effective in getting feedback and finding the exact people who I should sell to.
End of Thursday: Final results
So there I was, at the end of a long day of hustling. I tallied up my final numbers from the day and here's what I got ...
Including the $925 in revenue I made from the cocktail events on Tuesday ... that's $5875 in total revenue.
Now let's calculate the profit:
- Total tickets sold from all events: 235
- Total Revenue: $5875.00 (235 x $25/ticket)
- Cost per person = average $7.50 per person. Some events will cost me almost nothing (PGA event I just need to buy beer)
- Costs: $7.50 average cost per person per event + $2.37 PayPal/Eventbrite fees = $9.87 cost per sale
- Total Costs: 235 x $9.87 = $2319.45
- Profit (Total Revenue - Total Costs): $3555.55
Yep, that's right, that’s $3500+ of profit in less than 72 hours.
Here are the key concepts I learned from this experience to help you start your own business:
1. Stop making excuses. It’s all about your attitude. After I stopped hesitating with excuses and actually got to work, I started getting customers and making money. It’s the hardest part but the most rewarding.
2. You can plan forever. I love Mike Tyson’s quote where he says, “Everybody has a plan until they get punched in the face.” When you finally start getting the ball rolling forward you can iterate and see what is working or not.
3. Be flexible and listen to your customers. A few people wanted discount bulk orders but that option wasn’t available. That sparked me to originally add that option. Others had requests for certain types of events so I added that to the future events I was going to do.
4. Create urgency. I did this when I only sold tickets for one day which forced people to make a decision. Also, for the first drink events I limited the total quantity of tickets. Don’t fake this and be dishonest but encourage your customers take action.
5. Identify the exact problem holding you back. The main problem for me was that it took too much time for me to sell individual events like I did with the Cocktail Event. The solution for was pre-selling numerous events for the future.
6. Good products sell. After 5 PM when I headed out to have a craft cocktail and stopped actively selling I figured sales would pretty much stop. Shockingly I sold about $1000 worth over the next few hours while I wasn’t even promoting. How’s that possible? People WANTED to tell their friends about it and join them at the activities.
7. Solve your own problem. It was extremely easy to ask for money and sell when it’s something you want for yourself. When I finally focused on events / activities that I wanted to go to myself I was excited to sell. It’s much harder to ask for money when you are creating something just for money.
8. Starting a business makes you feel accomplished and loved. No one was forced to buy the tickets I was selling. I discouraged anyone, even close friends, from buying if they didn’t really want to. BUT the people who did buy or others who helped refer, promote, etc. made me feel loved and like I was really accomplishing something.
9. Look at your “zone.” That is the place that you excel in. This can be in the kitchen, listening to people, solving complex Jumbles in the newspaper, etc. For me, I’ve been creating events my entire life. I used to create conferences, love hosting dinners at my place or organizing trips to places for my friends. This is something I excel at so it was fun and fulfilling for me to start this business.
If you’re not sure what your “zone” is, ask a friend or family member what they would imagine you'd do if you started a business right now. That’s a great indicator of what your specialty may be.
10. Start now. Sometimes you just need to get started. I waited nearly 48 hours to make my first dollar. From that momentum I was able to iterate and figure out what would work vs. spending a lot of time making assumptions. Get that ball rolling and make things happen :-)
You may be thinking ... "Okay Noah, so you made $3,500+ in profit, but how will this be a full-time business?"
a) I have a mailing list now of 50+ people who I can sell future events to.
b) When my current customers go to the events and have a ridiculous time, they’ll want to buy tickets for more. And they’ll want to tell their friends after the awesome events which will drive even more customers :-)
c) As of now I’m only doing events every other Wednesday. I can easily starting doing weekends/other days and don’t have to actually be at the events myself (can easily hire someone for this).
And how am I going to deliver on all these events?
The first one isn’t until February 19th so I have nearly 3 weeks just to secure a venue and remind the attendees. The other experiences are further out so it’s not a rush to buy beer and confirm speakers/registrations for the different activities.
This experience has reminded me of the two most amazing feelings about starting any business:
- Seeing those first dollars hit your paypal account.
- Seeing the reality of your idea actually come to life and that you’re making real people happy.
If you want to start your own business and experience these feelings yourself, we're here to help you.
I love when people LOVE what they’re doing in life. If you want to love what you do in life and achieve the financial freedom you’ve always wanted, now is the time.
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