How My Small Business Broke One Million in Sales Per Year and How You Can Too.
The Beginning of Breaking a Million in Sales
This story actually starts rather humbly. About one year before closing my previous cash for gold business I started filling out the application in New Jersey for an A901 license. This is a required license in New Jersey if you want to operate any sort of garbage disposal or hauling business in the state. This license is even mentioned in and episode of the Sopranos in the Episode where Richie is selling cocaine out of the garbage truck. Someone mentioned to Tony that they didn't want to loose their A901.
While this article is about my garbage removal business, the lessons can extend into many other businesses including online businesses. Let's get started.
The application for the license requires that you have truck registered and insured in order to submit it. So I did what anyone in my position would do and I bought the cheapest dump truck I could find which was a Mitsubishi Fuso at junk yard about 30 miles from where I lived. I paid $2800 for the truck. It wasn't in great shape but it had everything I needed to get started with the application. It just wasn't road ready.
Right after shutting down my cash for gold business I received the news that my application was complete and I was able to start operating a few weeks later. However, the truck was in terrible shape. It needed new breaks, a new paint job, a new fuel pump and it was leaking from the oil pan. I did the smallest amount of work necessary to get the truck on the road however I did make it as pretty as possible. Before embarking on this journey I had read The E-Myth Revisited and it really changed my idea about how to run a business. I had a really cool logo I had designed and wanted it to look spectacular on the truck. This might seem like a minor detail but it was one part of many to help me get to that illusive one million in sales.
If you haven't read the The E-Myth Revisited and you are thinking about starting a small business or if you already have a small business its a must read. The basic concept is that you need to think about building your business as if the business could run without you and you can open another location somewhere else by following the processes you created for the first location. You want a turn key business system that is easy to sell in the future if you ever want to get out of the business.
Having a logo was part of that process and it was part of the identity of the business so that it could be recognized easily. The main reason why my business was able to accomplish what it did was simple... Brand awareness and marketing ! That being said there were other factors that were involved in the journey to a million and marketing alone will not get you there. Below are some of the growing pains, pitfalls and success that led me to be able to get the business there and allowed me to sell it a few years later.
Where to Start if Your Low on Resources
The truth is most of us will start our business with very limited resources. So if you want to break a million dollars in sales you're going to have to be resourceful from the start. Wether its capital, man power, equipment or know-how lacking these could be a pitfall for many but for me it was one of my greatest strengths. I ended up learning how to do things on my own with out following someone else's process.
The way you turn this weakness into a strength is by doing as much as possible on your own. You lack of resources will make you a better all around business owner because you would have to touch every aspect of the business in order for it to succeed. Here are the two key things that helped me achieve my million dollar sales numbers with my small business.
I was always terrible at sales and asking for money. Having to go out and answer customers' calls personally was something I dreaded. Ultimately however, it made me better at all types of negotiation. It even carried forward into my tech career when discussing salary expectations. It allowed me to see that everything is flexible when it comes to pricing. It also removed the fear of asking for money the more I did it. Where once I thought no one would pay $5,000 for a job, a few years later I was getting contracts worth 150k by being the highest bidder. Why? Because I knew my pricing and I knew how to ask for what a job was worth. Being confident in what you ask for and giving a reason as to why you ask for it will often lead to sale even if your price is significantly higher than the competition. As a general rule always have a reason for your price so you can answer any objection the customer might have.
Practice selling wherever you can. Places like Target, Walmart and other stores let you dispute a price. Start small by going to these stores and ask for discounts for for errors you find in the pricing or labeling of a product. While this is okay start honing your skill on actual customers. The point of selling is to start right away. A great book on negotiation that will teach you much more than anything I can in this article is Never Split the Difference by Chris Voss.
Don't be afraid to ask for more than what you really want. Customers will always ask for a discount. You can alway go lower from high price but you can seldom go higher once you've given a low price. This gives you wiggle room in your negotiations. Take the customers lead and look at their facial expressions. If you see surprise or shock they probably were not ready for the price you offered. Look confident and give them a nice discount and tell them that's the best you can do. If they don't budge ask them what they were thinking to pay for something like what you are offering. If you can accept their price and feel good about it, do it and put that money in your pocket. Remember the old saying a bird in the hand is worth two in the bush. If nothing comes of it keep their number and follow up a day or two later. Continue to follow up until they give you a yes or let you know that it is already taken care of.
I tried a million different things especially towards the beginning of my journey. What a lot of people don't realize when starting a small business is that marketing is an integral part of business. Without it you don't survive!
What is marketing? I learned marketing is more than just running Google ads. It's how you're perceived by your customers and potential customers. It's the exposure from a combination of all the things you do to get noticed. I did things no one else was doing regularly. I think others were not doing it because they felt uncomfortable with things as simple as cold calling someone. The truth is it is awkward your first 50 to 100 times. However after you get over that discomfort it becomes second nature and you can do it with out thinking. Better yet it prepares you for those days when you have no work. You can tap into your cold calling skills and start calling your previous customers with much greater success.
1 = worst | 5 = best
|Marketing Tactic||Effectiveness||Cost||Time until results|
|Directly handing out cards at home improvement store||4||4||4|
|Flyers on cars (you will only get angry calls)||1||3||4|
|Cold calling prospects||4||5||4|
|Volunteering services at big events||4||5||3|
|Using truck as a billboard||5||5||5|
|Any print advertising (magazines, newspapers)||0||1||0|
|Guerrilla signs on public utility posts and fences||2||2||2|
As you can see I tried a lot of different things. In the future I will write articles to get more in depth about these particular topics but its a good idea to know what resources are available to you to market your business.
Having my trucks be a giant billboard everywhere I went certainly helped as well. I had a recognizable logo and business name. People would take pictures of it on the street and stop us to ask for business cards. Why? because the truck clearly stated what we did, it was clean and it looked professional. I had six trucks total and we would often travel in a caravan to large jobs. Imagine seeing this six of these in a row on the highway. I think you would be pretty curious about what we were up to.
Google AdWords worked very well. However it was also really expensive. You need to make sure to allocate a high enough budget for it to work and then you MUST MAKE SURE you have the bandwidth to answer every lead and call that comes in and the man power to take on any job that it brings. Every call or lead you miss through this channel is not only costing you that job but costing you money because you paid for that click.
In the summer of 2017 I was spending $500 per day on Google ads alone. However I had a large crew and was able to not turn down anything that came from that channel. I even landed the sale of painting manufacturing plant that need to get rid of all their old equipment. This was an enormous job that came through Google ads. If I did not have the crew size and equipment size I had I would not have been able to take it on.
Key Take Aways to Crack a Million in Sales for Your Small Business
Don't be afraid to sell. Think of your entire life as a negotiation and always ask for more than what you want.
Marketing will get you customers. With out it your small business is dead.
There are a million different marketing channels. Make sure you try the best ones for your business and invest heavily in the ones that work.
Never drop the ball on phone calls or leads especially if you are paying for them. You won't only loose the sale you will loose the money you put into your marketing as-well.