A Business Lesson Learned The Hard Way
Ok, guys and girls. I'm pretty open about myself on here, but lately I've been super busy and not nearly as active as I like to me because after being laid off at a massive tech company I started my own gig.
It was something I did before for freelance because I have experience as a project manager and estimator. Most owner operated construction and skilled trades handle both the office and the dirty jobs. That means they need to be able to bid (or estimate) the projects they want, while also being the guy trimming the hedges at the current job.
It was easy and simple, and a target market that I knew I could score rent money off of.
So after leaving that job for tech sales, I would use it to make a little bit of money.
Well come being laid off, I needed a lot of money and decided to jump in. I created a website ($100 from WordPress because I know a bit CSS/HTML/JS), a new laptop ($800) and the software I knew I would need for the company ($995 annual license) and I started making phone calls to lots of old contractors I knew.
This was the last bit of my $3000 savings I saved before heading out to Arizona for the sales job. It was going to be feast or famine and I decided I wanted to do my own thing (Silicon Valley got to me).
So the first month I did some freelancing and made about $500 and then landed a client who wanted emergency bids done and paid $1000. Which was WAY more than I expected to have come in. I ended up paying rent and then actually moving back to Texas where I could meet these guys straight up.
This is where I spend 100 hours a week trying to drum up business and hire people.
The next month I was able to bring in a subscription based client I use to work with and another one he knew. Both of them were commercial landscaping companies so the take offs were extremely simple. So I focused on these two clients and only charged them $500 a month for a reasonable amount of bids. At this point the first emergency bid client had already decided it wasn't for him.
Perfect, now I'm making $1000 a month pretty much recurring. Then I hired two college interns (aka college students in the conservative group I am a party of at University) for $9 part time and told them I'd pay them more as soon as we bring in the big guns.
Mind you, during this time I'm still doing all the takeoffs as they come in during the night hours, and training these guys for three weeks. It was fucking miserable. But somehow I woke up every morning wanting to keep it going. I barely broke even every month after paying for my two interns and the fixed costs of renting an office out of a friends current office space. At this point I had two clients who were $1000 fixed, as well as freelancing for $500 and then we picked up two guys who wanted one-offs and could expect ($300-$500 a month off them).
But even though I was close to break-even, I was still writing IOUs to my best friend for rent money and groceries.
This is when I hit my gold mine
So we use to work with a general contractor when I was at the real construction company back in the day (we'll call them ABC Construction) which were extremely professional, but lean and HUGE. They did ten's of millions in contracts a year, but I can't find any real numbers. They wanted to have our become their estimation department on change orders, emergency takeoffs, and smaller projects which their team wouldn't normally touch.
We decided to pay out as a subscription basis at $15,000 a month based on the volume they wanted to have and the 24/7 access (which was only me at the time). This was perfect because my interns become full timers and I paid them $15 an hour when I promised them I would. I focused on hiring one more full timer (ironically they were all conservative members of the group which was nice) and got him up to speed quickly.
Because I was handling after hour takeoffs and emergency take offs I was pretty damn busy all the time. I was still trying to drum up business, but I stopped selling like I was suppose to (because at this point I was pretty comfortable). And then that client who was doing $15,000 of the revenue said that come Oct 1 2017 they'd have room to do over $30,000 a month in volume. Which sounded great to me. So I totally stopped selling and just keep going up for about 2 months paying back my buddy and getting a lease I knew I would barely afford at my current rate, but expected that to go up.
So this is when shit hit the fan, and I fucked up.
Back in September when I came into work, Jordan (one of the first full timers wasn't there) and left an email saying that he had accepted a job at another place. No problem. It happens. I knew that my day was going to be worse.
The week after having Jordan left, I walked into our office space to see that no one was there. Mind you this is like 2 weeks before I have a HUGE amount of work that needs to do. So, what do I do, I start freaking out. Calling all of them, trying to figure out what went on. It was a fucking horror show.
So then I call ABC Construction, to explain that we wouldn't be able to accept the volume they were proposing on Oct 1st. They said that is was no problem...
...because they were pulling their fucking subscription.
So now I was back down to a single sporadic guy for $200 and $1000 in subscriptions. But I was floored. I didn't know what happened or what to do. And mind you this is coming to Winter so I didn't expect sporadic guy to be around or even my other subscriptions to last all winter (did subscription, no cancellation fee, I was a fucking idiot).
Then I was hit with the worst fucking sucker punch I have ever had in my entire life. ABC Construction had poached my workers by offering them full time job (real jobs) after their co-op with them and how much better it'd look on the resume, and benefits (fuck benefits).
Over the last month I've had the worst month of my life. Literally. I have a single subscription, had to take an old job I use to work at (new job title, less than 40K pay) and living in an apartment I can't afford and am looking at eviction or subletting, but it has to be soon.
But the thing is, I learned so much. It was the greatest lesson in business I've ever seen. Business is not clean, surgical, and simple as you see on TV shows or even what I assume as basic business jobs. It's messy, and ugly, and will bite your fucking head off it you don't protect your neck.
I just wanted to share an experience I've been dealing with, and offer myself to anyone who wants advice on startups or what its like to start a business (and fail).
Thanks for listening. And honestly, I'd do it again in a heartbeat.
Mod Note (Andy): Best of 2016, this post ranks #17 for the past year