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How I turned a crappy offline business into my personal ATM

The backstory.

So you want to get started making money online and don’t know where to start. We got you covered. This post is the backstory on how I got into my first online business that generates me a decent amount of money every month. There is much more that I can do to improve it, but I’m taking it step by step in no rush.

This series of posts will take you step by step into how I built my first online business. It was an offline business but I converted it little by little to a completely automated money making business. This first post is pretty long at 1,500 words but it takes you into exactly what happened and the story behind it. I want you to get a feel for what it took and what I needed to do.

 

I got started in the printing business through my uncle. After working for him for 7 years I learned the ropes of that business model. I started off as the delivery driver and worked my way up to manager. In 2001, the technology became available to process printing plates directly by computer. In the past, you had to process a plate for an offset print press the old fashion way; by hand with chemicals. The CTP (computer-to-plate) systems revolutionized the printing industry because jobs could be produced faster. You did not have to wait 3 or more days. Additionally, presses now were highly reliable and advanced, that they were able to producing a large volume of print runs of double sided large sheets and coated with whatever finish was required in ONE PASS. That also cut production time in half.

At the same time on South Beach, the nightclub scene was exploding. New clubs were competing with their neighbors for visiting tourists and patrons. If one club had a world famous house DJ playing on a Thursday, the club next door promoted an even more famous DJ for a Friday night. There was no Facebook in those days so flyers were king. Get a street team of 4-5 people and hit the streets passing out flyers for club parties. The other clubs would see the flyers and rush to outdo one another before the weekend.

So my uncle and his partner found a small family owned press house that had the right mix of technology, and young enough that they were not stuck in the old printing methods. They arranged on a price for various sizes of jobs and started offering flyers. My uncle was big in the party scene in those days so he knew all the bouncers, promoters, local DJ’s, owners and more. It was unheard of to offer 5,000 full color front and back flyers in 24 hours, and there was no better place than South Beach for that kind of business.

Within 2 years, they took an initial seed capital of $3,000 and 1 Apple computer and turned it into the largest overnight printer in the US with sales exceeding $7 million. Not only were 99% of clubs in Miami printing with them, they had resellers in cities like Chicago, St. Louis, New Orleans, New York, Phoenix, Memphis, Dallas, and on and on. The craziest part was that all they did was design the flyers, and send them to the press. The press printed it in 24 hours, sometimes 18, and the drivers (me) would pick them up and deliver to clients, office and airport drop offs to ship overnight to other cities.

After I left the business because I had hit the glass ceiling in terms of advancing within the company, I left to start my own thing. I ended up partnering with another company that had formed and took $5grand that I had and invested in the fledgling business and would work there for the next 3 years. After the principal owner got into some legal troubles and left the country along with all the cash reserves, the business went bust. I had just finished dealing with some tough financial losses and when I realized that it had fallen apart, I almost blew a gasket.


 My staff at my uncles business circa 2005

The first 2 years of my new printing company

Since I was without a job, money and formal education, I decided to continue doing what I knew best: reselling printing. That was my hustle. I had clients from the now defunct print business previous, so I gathered the emails, created a simple WordPress site, leased an office and got to work. I sold my little car and bought a cargo van. Since I knew all the players, it was easy to set up my own thing. I hired an old manager from my uncle’s old business to handle the day to day and I would focus on expanding. I had my ups and downs, but mostly downs. I had underestimated how much business I needed to generate in order to stay afloat. I knew most businessess fail within the first 5 years, but my ego told me that wouldn’t happen. I tried bootstrapping the crap out of it, but with no luck. Little by little, I had to let go of the water cooler delivery, the meals out, the cleaning lady for the office, etc, etc. After 15 months, I closed the office, dismissed my 2 employees and moved the business into a spare bedroom in my house.

It was not a big deal because the majority of my clients rarely came to the office. They would send me the design via email and I would print and ship to them. For designs, we would email back and forth a design with changes until approved and rinse and repeat. In early 2010, the economy came down on my business model like a ton of bricks. Business dropped to a trickle of 1 or 2 orders a week.

The pivot

My website wasn’t doing anything, it just said my name and what I did and to call me. After a while I knew I needed to get a virtual store running but it was a daunting task that would have cost me alot of money I didn’t have. After a couple of days of researching I decided on building my site with BigCommerce. It’s a SAAS (Software as a Service) that made it relatively easy to set up and add your products. With paypal integration there was no need to get all fancy with the code implementation. I got a Facebook fan page going, and invite all my existing customers to my facebook page. I set it up so that when they came to the page, and after liking it; I offered a $20 credit towards anything on my store if they were to share the link on their Facebook wall.

I also signed up for Mailchimp’s free account and set up a simple newsletter and sent out emails. I integrated a WordPress blog into the bigcommerce system and wrote 2 or 3 posts a month and did a TINY TINY bit of SEO and would post those articles on my FB wall.

I got in touch with some friends in other cities and I sent them 5,000 flyers each to Chicago and Dayton, Ohio. They passed them out at businesses, parking lots, events, games, you name it.

I was behind the scenes; the guy behind a phone and computer screen. I would download the files the clients would send, verify them, and sent to print. But I was picking the flyers up still, delivering myself locally, and was losing 3-5 hours a day just being in the S.Florida traffic. Business wasn’t picking up as much as I wanted.

I took a look at competitors business models and I couldn’t figure it out. And the it hit me.

Focus on your hustle

The majority of my business at that moment in time was small non profit charities, lawyers, and real estate agents. I decided on focus my sales to those 3 targets. I did some small color changes to reflect a more clean corporate look for the site. I created standard templates for business cards, doorhangers, mailers, and flyer designs for each industry

LEVERAGE YOUR CONNECTIONS

I personally emailed each and everyone of my roughly 2,000 clients thru a 5 day span and asked for a personal referral to one of their associates. I called the corporate offices of the 3 largest real estate chains in S. Florida and Chicago. I got my sister to get me on the vendors list of an international charity organization with millions in funding. I got my brother at Carnival Cruise Lines to get my name mentioned when a manager just casually mentioned he needed to order business cards for 10 new employees. (Ok, that was luck but still)

SIMPLIFY IT

Instead of using an offline credit card merchant, I use Paypal. Paypal is a bit more expensive than others but what you lose in percentage points you gain in automation. My vendors were now setup to handle the orders online. GREAT!! No more sending FTP files by email in bulk at the end of every night. Paypal had a Debit Mastercard that used your Paypal balance instead of your checking account. With Paypal, once the client made the payment on the site, the money was available immediately; I didn’t have to wait the 3 or 4 days to transfer it to my bank account. So when a client would place an order on the site, the money went into the Paypal account. I would check the order, place it on my vendors site, pay with the Paypal Debit Mastercard, and they would print and drop ship directly to my client. My vendor had expanded to 7 warehouses across the country so I was able to offer next day ground service to 95% of my clients across America. What was left was my gross profit. At the end of the week, I would transfer the money to my business bank account and pay all my regular bills.

AUTOMATE IT

Everything was going great but I was still sitting behind a desk for 8 hours a day at home. I had some contacts at the Art Institute of Ft. Lauderdale and I was invited to a student open house. I went and met with a couple of kids and struck up a conversation with one student that had some business savvy about him. So I gave him a job. All he had to do at 9am and again at 4pm everyday, was check my site, see if any new orders came in, download the files, verify the artwork was of good quality, place the order on the vendor’s website with our client shipping details and he would select the Paypal card as the payment source. I was now able to focus on dealing with the smaller issues, the bigger clients who required a holding hand, and marketing and growing the business. But the smaller issues got in the way of marketing, and the big clients certainly were no help in taking away my focus. I built up a list of the 200 most frequent questions clients would call and ask, and created and FAQ page. I then hired a researcher on Odesk to find out what were the 50 most frequent and popular questions on my competitors FAQ, and added them to my FAQ page.

I recorded 2 weeks of phone conversations with clients and made detailed notes about them. I then found a design student in the Phillippines with great English skills to serve as an online customer support specialist via online chat. I sent her the recorded conversations so she would get a feel for what to do. I followed Tim Ferris from the 4 Hour Work Week and delegated decision making to my student employee in Ft. Lauderdale and my CSR in Manila after I knew they had a pretty good handle on the entire business process. It didn’t take long; just 3 weeks of 15-50 emails a day from the 2 of them and then when I gave them decision making power to fix a problem if it did not cost me more than 10% of my profit for that particular issue with the client, emails dropped to less than 5 a week.

Since I paid them both on the amount of time worked, costs weren’t very high. My CSR was a stay at home mom and all she had to do was chat with a client whenever her computer rang. Since the FAQ was pretty detailed and the phone system directed everyone to the online FAQ and then the online chat, she really didn’t have to sit in front of the computer for more than 2-3 hours a day max.

That’s the backstory. In future posts, I will go into the details of how you can start your own resellers business online.

 

Did you like this post? It’s a little different from most posts that you find in the make money online arena, but I am interested in your thoughts. Please feel free to leave a comment!

  • stewie

    Great blog my friend, you have prove that if you stick at something, even if things go wrong, you can win through.