Why would anyone in their right mind leave the stability of a salary, full benefits, normal hours and maybe even a membership at a gym or the jelly-of-the-month club for the life of an entrepreneur? I’ll tell you why: to make an impact, to do something incredible and to have a chance at creating life-altering sums of money.
Yep, that’s all there is to it.
But if you’re really ready to turn the $100 you have in your pocket into $100 million, I recommend you read this roadmap first. I devised it with the help of Hayes Drumwright, a good friend of mine and the founder and CEO of Trace3 (an IT consulting company based in Irvine, Calif.) who started his own business with just $100 — really. Here’s how:
Plan Your Entrance
You regularly hear about people who have left companies to start businesses. Some people enter entirely new industries, while some launch a startup in a similar space or even as competition. Regardless of your situation, you don’t always have to quit your job immediately and, as a matter of fact, I suggest that you don’t. There are ample ways to test your new startup idea and get the ball rolling in order to prove that you have a business model to build. If you play your cards right, you might even get to the point that you’re generating revenue before your exit.
Hayes worked in the IT industry before starting Trace3. Starting a company that specializes in something similar to your previous place of employment makes a lot of sense (assuming there aren’t any major legal implications), as it can provide you with the chance to start your new venture with clients already lined up.
“Due to the personal relationships that we had built over the previous years, we already had three or four clients ready to go before we’d even launched the company,” says Hayes. “So when we started re-selling our IT products, we were taking orders in the first month of operation.”
Ask for Money, Not Goodwill
When you’re working on the early stages of your company or idea, you want to know if customers are willing to spend money to buy your product or service. So when you give them your pitch, stop and ask them to pay for it. Hayes says, “This will force them to put their money where their mouth is and make a real-life decision as to whether or not they’d actually use your service or product.”
The moments following your request will likely be uncomfortable, but don’t interject or try to convince them. Be silent and force them to answer the question. If they say yes, don’t get too excited. Go do it again and again. If others decline, turn on your sales charm and try to convince them but, in Hayes’ words, “don’t forget that you got a ‘no.’”
You can’t rely on goodwill to start a company, and at some point you’re going to run out of friends and family to help you. Rely on value and relationships instead.
Understand the Importance of Your First Hires
The first few hires will always be the most important, as you’ll be strapped for both money and time. Be absolutely sure that they’re the correct investment of both. Don’t compromise on people who aren’t a perfect fit for the culture. If your new employee isn’t turning out to be quite the asset or cultural fit that you’d intended, fail as quickly as possible. “The longer you drag out change, the more disastrous it can be for your company,” says Hayes.
Another great idea that I plan on implementing into BottleKeeper is paying double the market rates for salespeople. When Hayes started his company, his sales staff were all on 100 percent commission — but had the opportunity to make twice as much money as they did in comparable positions. Hayes says, “This quickly spread through the industry and we started attracting the top talent.”
Write Down Your ‘Why’
Do you know why you’re working so hard every day? If you don’t know why, how do you expect others to know why they should follow you into battle? “You must understand and physically write down your answer as to ‘why am I doing this,’ then share it with all of those in your company,” Hayes says. The group’s understanding is incredibly important in order to garner the respect and cultural following required to take your company to $100 million in revenue.
Want some more evidence that these ideas can really work? Trace3 generated over $400 million in 2013 with around 300 employees and very little middle management. Oh yeah, and they didn’t take a single dollar of outside investment. This success is largely built on a company culture that has been rigorously maintained since the day they started — with just $100.
If you’re interested in moving mountains, I recommend that you follow these suggestions with your own team. I know I certainly do.