Rich20Something

How to Launch a Profitable Business in 24 Hours or Less

A few years ago, when I first started brainstorming different ways to make money for myself, I felt like taking a can of bright red spray paint, drawing an “X” on a concrete wall and smashing my head straight through it. Hopefully I would just hit a beam and put myself out of my misery. I already determined I couldn’t work for some company I didn’t care about, so it was up to me to provide for myself.

I kept doing the mental marathon. You know the drill: coming up with dozens of ideas every day and rejecting all of them. Many things I wanted to do seemed too far out of my reach. I didn’t have hardcore “techie” skills, and I didn’t have a business degree. I didn’t feel like a natural entrepreneur. Most of all, I didn’t feel like I had any relevant experience that was worth money.

But then, it hit me.

I remembered that somehow, some way, I’d managed to stay employed. A miracle, I know. This meant that I actually did have at least a few skills that were valuable to someone else. Otherwise, people would never bother hiring me.

One of those skills was as an SAT/ACT test prep coach working for Kaplan Test Prep in college (and shortly after).

I’d never really taken the time to step back and think about how much a skill like this was worth to the people I was providing the service to: both Kaplan and the families I was helping. I only thought about how much I was getting paid. I was solely focused on my hourly rate. How many of us do this? Almost all of us.

How many of us are so concerned with what we’re getting paid, that we never stop to think about what we’re worth?



This is the WRONG way to think about your skills.

Your salary is not equivalent to what your skills are actually worth to the company that employs you. Think about it: if you were getting paid exactly what your skills were worth, the company hiring you wouldn’t make a profit off of you. After the onboarding and training process, many businesses have already spent $5,000 to $10,000 just to acquire you. Then, once you start working, you still have to make them money. They have to pay you way less than what your skills are worth in order to make a profit from your work.

In fact, most companies usually make two to five times more than what you bring in for every hour you work that you do. Case in point: when I looked at my work for Kaplan, I realized this was happening right in front of his eyes.

My hourly rate was $18, which at the time I thought was fantastic. Then I found out that Kaplan was charging the families I was helping over $100/hour for me to come to the house and teach little Timmy quadratic equations.

They weren’t doing ANYTHING except connecting me with the student. I was coordinating with the families, teaching the material, developing most of the curriculum and following up. In short, I was doing $100/hour worth of work for Kaplan, and they were taking $82 out of my pocket every damn time.  

YIKES.

At that point, I realized that I had a viable skill that people had proven that they would pay a lot of money for, but I was missing the connecting piece. Even if I branched out on my own, how would I find the clients? I had no website, no storefront, no testimonials, no anything. I just had myself. Creating a resume doesn’t do much good when you’re working for yourself! This piece of the equation caused me a ton of anxiety, and it caused me to stall.

This is the place where many of us quit and turn around back toward the safety of our jobs.

We think to ourselves, “Well, I may have a skill, but my company is the one giving me all the work. I need them.”  

I mean, let’s get real here: it’s hard to find clients. What was I supposed to do? Post ads on Craigslist? Pin flyers on the bulletin board of my apartment complex?

I needed something that worked really well, and fast.

Then, EUREKA.

I had an idea that changed my business, and career, forever.

“If I’m looking for a very specific type of customer, why not just go to where existing customers already are?”

“I should look where my ideal customers are already in the buying mood… It’ll be easier to get their attention and I’ll have an endless sea of leads and paying customers instantly.”

Eureka, indeed. That idea is something worth running naked in the streets about. It’s gold.

That’s when I developed The Marsupial Method and set up my first business in less than 24 hours.

The Marsupial Method

The idea of “staying in the pocket.” Finding where your customers are and collecting them, without going out and having to market to them very hard.

Step 1: Find out who your REAL customers are

A “real customer” is someone who is actually buying your service. 

I realized that my real customers were the parents of my students. So I had to figure out where they were located. I got very specific about how to narrow this search: parents in affluent neighborhoods, with a good amount of disposable income who are willing to pay more for extra tutoring for their kids to get into great schools.

Step 2: Identify who your real customers are ALREADY doing business with

In my case, I came to discover the existence of private admissions companies, which help families get their kids into the colleges they want by “packaging” them really well (i.e. working on essays, how to position themselves, what extracurriculars to take and highlight, etc.).

Keep in mind that the other half of “packaging” is the actual test prep itself–that is, getting tutored on the SAT.   



Step 3: Offer that person/company MASSIVE value

I researched private admissions companies that didn’t have in-house test counselors. They only handled the packaging side; these companies would send their clients (the families) to Kaplan for the test prep portion.

I saw an immediate opportunity and pounced. “Hey, private admissions company,” I said, “I see that you’re already doing business with people who want to get into great colleges. I notice you don’t actually teach test prep, you just package students. Wouldn’t it be great if I become your go-to test prep provider?”

Then I laid out my credentials (worked for Kaplan before, college educated, etc.) and made it clear to the private admission counselors that by sending their customers to me, it was the same thing as sending to Kaplan. The idea of having an “in-house” test prep counselor would be hugely valuable for the company and would make it seem more attractive in the eyes of interested families (“leads”). One less thing to think about, coordinate and pay for.

Then I added more value to my proposal. I said, “If you were to send me some of your clients, I’d love to give you a small portion of my profits (as opposed to you sending families to Kaplan and Kaplan keeping all the profits). Plus, this arrangement would make it easier for you, because I know you often have to schedule and coordinate classes with Kaplan on behalf of the families, and make sure that the kids are doing well in their test preparation. Instead,” I said, “now everything could be ‘in house’ and I’ll give you detailed updates on all the students and their progress.”

I laid it on even further, clarifying everything to fully drive the point home (see the subtleties of my “assuming the sale” and assuming a position of power–great sales people only communicate their solutions in terms of the customer’s needs): “That means, students get better scores, they get into better schools, the families are incredibly happy, you look better, I get clients and you get money from it. It’s a win-win-win. A home run.”

That’s me cashing out, while the parents feel like they’ve saved, while the admissions company smiles prettily and collects 15 percent while working on other, more lucrative things.   

Step 4: Stay in the “pocket”

Continue to build your relationship with that service provider or organization, so as to continue creating more value and more channels of revenue for everyone.

For me, that meant doing great work for the private admissions company, who kept sending me clients. I made sure my reporting on all students’ progress was spotless, and I even offered to help them with some online marketing stuff, which I was just getting into at the time.

“Rich20Something: Ditch Your Average Job, Start an Epic Business and Score the Life You Want” by Daniel DiPiazza is available on May 2. Pre-order your copy today at StartupNation.com.

Total
27
Shares
Previous Article
Corporation

Should You Change Your Sole Prop to a Corporation?

Next Article
Budget

5 Steps to Budget Smartly for Your Small Business

Related Posts
purpose
Read More

Gen Z’s Mindset of Purpose Fuels a New Business Model

In September 2021, 4.4 million Americans quit their jobs. We’re hearing about the Great Resignation everywhere--on TikTok and Forbes and everything in between. The industries affected are vast, and the reasons are highly variable. The common denominator, however, seems to be that there is a widespread shift in mindset among American workers that may no...
responsible artificial intelligence
Read More

How to Build a Better Startup with Responsible Artificial Intelligence

Startups are quick to announce that they use artificial intelligence (AI) technology to provide better results for their clients, streamline workflows, create products more efficiently, and offer software solutions far beyond those of their competitors. But while AI can provide tangible benefits to help you automate and grow your startup, you need to use it...
first-time franchise buyer
Read More

5 Important Tips For First-Time Franchise Buyers

Many people have the goal of owning their own business. To expedite this process, becoming a franchisee of an established brand may be an attractive option, as entrepreneurs can build off a proven formula for success to guide their decisions as business owners. However, opening a franchise location is not a fast track to riches,...
buying an existing business
Read More

Why You Should Buy an Online Business Instead of Building One From Scratch

Good news. You can purchase an existing online business.  Whether you’re using an online marketplace, personal network or broker, there are many avenues to purchase an online business. Some business owners no longer have the passion to run a business or a new venture may lead exiting business owners to a fresh journey.  Whatever the...