My Business Plan

My Actual Business Plan

This article will outline, in a ton of detail, the exact plan I’ll follow to launch my business. I also promise that I’ll return to this article periodically to highlight where the plan worked, where it didn’t, what software I used and didn’t end up using, and if I came in above or below budget.

So, let’s get started.

I’m beginning here with a couple of questions to level-set. These are questions my fiancee asked me when I told her about this article, so I figured they are questions others would ask as well.

Why are you sharing your business plan publicly?

I’m writing this article and sharing this business plan for the same reason I’m sharing a daily case study on what I’m doing every day to build $10K a day in income: I wish I had this a couple of years ago. I would have read this a few times and bookmarked it.  It would have served as a source of learning and inspiration.

Please let me know in the comments where additional detail would be helpful and of any additional questions. I’ll do my best to circle back and answer as many as possible.

Why are you launching a business? Aren’t you making money from consulting?

The short answer is yes, I am doing well right now. I made over $140K in my first year consulting, all on the side.

However, there are three structural problems with consulting:

  1. Lack of control over my schedule
  2. Seasonality and cyclical trends
  3. Ceiling to how much I can make

Let me dig in briefly to each of these concepts and why they aren’t great

Lack of control over my schedule

I love consulting and talking with clients on the phone. I absolutely know how to sell once they are on the phone.

But if a client asks for something, the client gets it. For example:

  • I had a client who was a doctor working the graveyard shift at the hospital. When he wanted to talk, it had to be late at night
  • I had a client who was traveling for the week in Australia. The time zone difference is an absolute killer
  • I had a client who wanted output ASAP, even though I was moving that weekend. Tough shit, I had to get the work done regardless

To be fair, you could do a better job than I have at managing client’s expectations so this doesn’t happen. However, I tend to work for Private Equity firms and Hedge Funds for projects north of $5,000. At that price point, and with that clientele, they get what they want.

When consulting, I’ll always have an element of lack of control

Seasonality and cyclicality

There is a strong seasonality component to consulting.

Businesses tend to take Thanksgiving through January 1st off from spending on external vendors. If you don’t have a consulting client going into that period, then you will be in trouble and face difficultly selling work. Fortunately, I had a $30K project over the holidays that kept me busy. Without it, things would be been tight. There’s no guarantee I’ll sell something similar this holiday season.

Similarly, consulting spend is highly cyclical. Look at this fantastic chart as illustration of the impact from COVID:

A 20% drop doesn’t sound too bad in the grand scheme of things. However, the key point to understand is that all consulting firms won’t drop revenue by 20%. BCG and McKinsey won’t experience a 20% drop….speaking from experience and knowing how they handled 2008/2009.

My one-man consulting firm though? I could see a 70% drop or so.

I’m completely tied to cyclicality.

Structural ceiling to the amount I can make

The first two components we discussed are annoying, but they’re just the cost of doing consulting.

This component is the biggest structural driver to why I need to stop consulting. Look at this math below:

At my current yearly consulting income and average project of $7,500, I’m doing roughly 19 projects per year. Each project takes roughly two weeks to complete.

To get to $10K a day at the same price point, I need to finish 487 projects per year or 1.3 projects per day.

Not realistic.

Even if I massively increased price to $25,000 per project (which is doubtful, I believe I charge more per hour than comparably level individuals at firms like Accenture, Deloitte. I also cannot justify charging BCG/McKinsey prices and I won’t get it anyways), I still need to complete 146 projects a year.

That’s completed less than one project per day, but it’s 7.5X what I’m currently producing. I also cannot finish one of these projects in just one day.

Said differently, I think there is a structural ceiling to consulting at around $200K a year, which is roughly 25 projects per year.

That’s good money, but it is roughly 5% of my goal of $10K a day. That means I have to do something different to make $10K a day

My four criteria for a business to make $10K a day

The last section just ran through three reasons why consulting doesn’t get me to where I want to go.

This section, I’m going to highlight the four things I’m looking for in the business I’m planning to start. The business I’m looking for will have these components:

  1. High Ticket Price Point
  2. Recurring Revenue
  3. Complete control & under 20 hours a week
  4. No employees and no investors

As before, here’s some detail on why these components are attractive.

#1: High ticket price point  lowers the number of customers necessary to reach  revenue goals

The high ticket is extremely attractive due to how it changes the unit economics of the business. Check this out:

At $20, I need 15,000 customers to reach $300K a month. That is a ton of customers.

Taking the mid-point of the chart below, let’s assume the conversion rate is the midpoint here at 7%. Said differently, that assumes 7% of visitors to the website will end up buying something.

7% means 1 out of every 14 website visitors will buy from you, at best.

If you are selling at $20 product and need 15,000 customers per month, that means you need 14 web visitors X 15,000 customers = 210,000 web visitors a month.

That is an absolute ton and a fool’s errand.

If you are selling a $300 product, however, and only need 1,000 customers, that means you only need 14,000 visitors.

That’s much more do-able.

Fewer customers also means less customer service

Customer service and treating people right is a key aspect of any business. If you want to truly succeed, you need to do it.

It’s also time-consuming, and slightly demoralizing as customers tell you, in rather specific terms, why you suck. Check this example from online search:

This isn’t my customer, but I have had this person as a customer before. This customer absolutely exists. If you’ve worked in food or retail, then you know this person.

If you have 15,000 customers, then the law of big numbers means some of them are going to be nuts. If you have 1,000, then the odds are much better you’ll have less nightmare customers.

Always deliver great customer service, but do your best to protect from customer service downside.

#2 Recurring revenue is a must in any business in 2020+

About 10 years ago, venture capitalists began to fall in love with any business with recurring revenue. They were absolutely right.

Perhaps the best-known consumer example here is Netflix. Netflix charges you about $10 every month to access their library. The $10 is charged every month, which makes it “recurring” for them.

It’s easy for the customer because they don’t need to think about it. You give your credit card number over to the business once and it’s done.

It’s even better for the business though. The business does not need to be selling and marketing all the time. Once they get a customer in, they can focus on delivering a fantastic product and keeping that customer happy.

There is also downside protection. For example, COVID.

Businesses that relied on selling and then delivering services (like consulting) get hammered. They could lose 100% of their business overnight. The reason why is most people aren’t sharing their credit card numbers now in order to save money.

But businesses that already have your credit card number? Maybe 10-20% of their customers cancel to save money. But keeping 80% of customers is a hell of a lot better than 100%.

#3: I’m doing this case study for freedom. The business needs to be free

I could go try to work my way up the corporate ladder. You can get a corporate job making $10K a day.

I don’t want that path because I want freedom.

The business also needs to be free.

What I mean by that is I cannot be in a market where one person or one other business could kill my entire business line. I call these  “single incident” markets with my clients.

For example, I won’t open a McDonald’s franchise as a core business. McDonalds corporate could change the terms of my operating agreement and then my revenue is killed.

I won’t create a medical product that requires FDA licensing. One guy at the FDA could decide to shut down my business at any point.

It’s why I left Amazon affiliate marketing, as Amazon was beginning to show they wanted to pull that single incident lever and shut down affiliate marketing for them. I still do some affiliate work on $10K, but $10K is also not my business.

My business needs to be free.

#4: No employees and no investors

Managing people is fun and something I’ve always gotten good reviews in.

But,  managing people is a time commitment. It’s also a cost, as it means you need to pay these individuals.

Taking on investor money is fun and creates a splashy, sexy headline when Andreessen Horowitz puts cash into your business. It also means you now have growth expectations and no longer control the direction of your own company.

I don’t want either of these components.

What I do want is a business with high ticket prices, recurring revenue, with complete freedom from “single incidents”, and 100% bootstrapped with no employees.

I have an idea. It’s not selling online courses either.

Why my business idea doesn’t matter (but where I got it)

This concept has been beaten to death online, and I elaborated on it in my article about how you aren’t trying to start the next  Uber or Airbnb.

In short, the idea doesn’t really matter. It’s going to change 100 times over your first year. No idea is fully baked on their first pass. What does matter is your willingness to learn from market feedback. You need to adapt your initial idea as customers tell you they like it or don’t, and why.

About 30% of my consulting clients are startups. I can tell which one is going to succeed and fail through the course of the project. The reason why is the startups who are steadfast in their idea, even when they struggle to get customers, are typically blind to the fact that they are the only ones in the world who think their idea actually works.

Read Andresseen’s famous piece about product-market fit. Look at this quote:

“And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it.”

The truth is this: if you don’t feel the above, then odds are your idea sucks. Change your idea, adjust to market feedback, and keep iterating until you have product-market fit.

Your final idea is probably very different than the initial idea

I got my initial business idea via UpWork

UpWork is great. Not only is it a fantastic place to start your own freelancing career, but it’s a great place to understand the problems that people face and are willing to pay for a solution.

For example, I saw this job post this morning.

I’ve seen a 100 variations of this exact post over the past few months.

With 100 posts looking  for a cold caller, that tells me:

  • People hate cold calling enough to pay someone else to do it
  • Lots of people are willing to hire a cold caller
  • There is a multi-million dollar business opportunity here

I found my business idea the exact same way. I kept seeing a job post on UpWork looking for someone to handle a very specific task. Instead, I’m just going to create a business that specializes in this task.

A caveat: I don’t feel passion for my idea

The things I love the most in the world are my family and real estate investing.

My idea does not directly address either of those.

There are many smart people in the world who will disagree with the idea of starting a business in a space you aren’t passionate about. Their argument is that passion is necessary to keep you motivated when the times get tough.

I don’t think passion is what really matters here. I think what matters is interest. The question is not “are you passionate enough about an idea to make it your life’s work” but rather “are you interested enough in this to work on it for  40 hours a week?”

That’s a much lower bar to hit, but I think it’s the only bar you need. If you are trying to build a generational startup like Airbnb or Uber, then it makes more sense to go for passion.

Will I share the idea with the $10K/day community?

Unfortunately not.

It’s not because I’m trying to protect my business idea. I think protecting your idea with an NDA is stupid because no idea is that valuable.

However, I will have my real name and picture on the business website. My Linkedin will have the business name associated with my profile.

If I give you the business name, and the business has my real name (not Dean Woods), then you’ll know who I am.

I am passionate about staying anonymous to protect my family and their jobs.

Do I need a business plan to start a business?

I’m going to be completely candid: if someone uses the word “SWOT”, I immediately stop paying attention to them.

If someone is using the phrase SWOT seriously, then they’re doing it because they think they should, not because they’ve ever been told it’s the right thing to do by someone who knows what they are talking about.

In my career, I graduated the number one business school in the world, have sat in boardrooms to help advise on billion-dollar decisions, and have met and worked with some of the sharpest business minds the world.

None of them have ever used the phrase “SWOT” before. Wharton does not teach their students to use a “SWOT” analysis. BCG  does not teach people to use a SWOT analysis.

Creating a detailed business plan and a SWOT analysis is a waste of time.

Remember, your business idea will change and adjust as you get market feedback from customers. Creating a business plan that is too detailed just wastes more time until you start gathering customer feedback.

Instead, I think it’s best to have a high-level plan for the different stages of your business, which includes metrics of success and check-boxes for things to complete at each stage.

Below is an example and my actual business plan

My startup business plan involves testing the idea first, then  slowly scaling up as I find product-market fit

 

The basics of the business

My business model is going to be a tech-enabled service. In the beginning, it will have a person manually doing all the work. That person will be me. Slowly, that will transition to having virtual assistants and technology completing all the work.

The target customer is an individual who works in a specific job. This job has hundreds of thousands of Americans who work in it. For simplicity, let’s say it’s 500,000 Americans.

The problem the business will solve is time. The target customer has a highly manual portion of their job that does not require specific training or a license to complete. Even worse, the target customer has to complete this task in order to get paid. That’s why I’ve seen so many UpWork postings on this job.

My solution is, therefore, selling time and money. The business will take care of the manual work, which enables my customers to get paid faster. Taking care of manual work also saves them time that they can then use to solicit more customers and make more money.

My goal would be to have 1,000 customers that pay $300 a month for access to the service. This $300 would be charged in a recurring contract (cancel any time).

The core assumptions in the business

In reading the above basics of the business, you can see that there are a few assumptions that are made. If any of these assumptions are wrong, it means that the business will not succeed. The assumptions are:

  1. It is possible to complete this currently manual service with virtual assistants and technology
  2. Minimally 0.02% (1,000 customers/500,000 people with this job) of the target market is willing to pay to not do this task
  3. I can get this product in front of that 0.02% and accurately communicate the value
  4. Those that are willing to pay are willing to pay $300 a month
  5. Those who do pay are willing to be billed in a monthly subscription

If any of those five are not true, then it will be difficult to get this business to totally work. If all five of these are true, then the business should be able to reach my revenue goals of $300K a month.

My plan will be to test these assumptions as quickly as possible. That will be the first step of the business plan.

A key aspect of the business plan

I’ve broken this down to highlight what “to-do’s” I have to do for each period of the business.

The key thing to note is that there aren’t many to-do’s. A six month period only has a dozen things for me to do. Many of those, such as setting up the bookkeeper software/service, should only take an hour to do.

I think this is a really important thing to highlight. With not a lot of “stuff” for me to do, it means I can zero in on only the highest priority things to do.

For example, I’m planning on spending a good amount of money on software and freelancers. I could spend hundreds of hours trying to learn WordPress and still make a shitty website. I could just hire a freelancer to make a way better site and do it for $1,500.

The key message here is to not overload your plate with stuff to do and hire people or software to do what you aren’t great at.

I might regret saying this in a bit, but I don’t actually think this startup will be that hard to get to $300K a month in revenue.

Let’s see if I’m right.

Business Plan Month 0-6: Market Validation

Objective:

  • Test assumptions 2-5 to determine if there is interest in the product through interviews with potential customers
  • Manage to test the business idea while maintaining my full-time job and my consulting business

To-Do’s:

  • Build an interview guide complete with roughly 7-10 questions. These questions will be open-ended, to understand:
      • What is this individual’s biggest pain point? (hopefully, they say what I think they will)
      • Do they see a need for the product?
      • How much would they pay for the product?
      • Do they want me to contact them when the product is ready?
  • Scrape 1,000 profiles for email addresses
      • I’ll leverage Phantom Buster and a Sales Navigator account to do this
  • Set up a throwaway Gmail account and “warm it up” to avoid my emails being flagged as spam
  • Set up a Zoom Account 
      • To include within the invites so I can interview people without giving them my phone number
  • Set up Woodpecker
      • It’s my favorite cold email outreach software. I upload my scraped profiles, write a personalized template, and connect my warmed up Gmail. Woodpecker handles the rest for me by sending all the emails but doing it in a natural way so my account doesn’t get flagged as spam. Woodpecker is going to do 90% of the work for me here.
  • Schedule interviews
      • As responses come trickling in, I’ll email back and forth with the interviewee to find a time
  • Conduct interviews
      • I’ll conduct the actual interviews and record notes in Google Drive

Markers of success:

  • 150 completed interviews
      • I need a good sample size of perspectives. 30 people is nearly statistically significant, but I want people from all over the country to be interviewed. I want 30 people from the East Coast, 30 from the West Coast, etc.
  • 30 people want to be contacted when my product is ready
      • My last interview question is if they want to be contacted once they hear the product is ready.
      • It doesn’t matter if people say they think it’s interesting during the interview. If they don’t say “yes” to this question, then they’re not actual buyers. I need at least 30 to say yes and be actual buyers.

Tools Utilized and cost

  • Woodpecker: $49/month
  • Zoom account: $15/month
  • Phantom Buster: $30/month (I’ll only need one month of this though)

Cost for this stage

Assuming it will take two months of emailing and one month of Phantom and 6 months of Zoom, it should cost me roughly $205 to get all the market validation and insight I need.

Cost thus far

$205 for this phase

Go/No Go Decision:

To continue investing time to learn about this product and see if there’s an opportunity, I need to believe there is a market opportunity here. The 30 people saying they want to be contacted would be a great sign.

My fiancee and I will have a couple of conversations to decide at this point whether or not to move forward. She’s amazing, and I need her insight before moving forward.

Business Plan Month 6-9: Trial Run

Objective:

  • Sign up 10-30 paid customers
  • Dean to manually deliver the service to understand it better, understand bottlenecks, understand if this can grow
  • Begin to professionalize the business
  • Still work a full-time job
  • Still do consulting on the side

Markers of Success 

  • >40% of customers are very disappointed if they can never use our product again
      • This article on Superhuman (the email service I use, and the buzziest start-up in SF) is brilliant and shows a great metric to track as you figure out product-market fit. In short, it says survey your customers and ask them how disappointed they will be if they cannot use your service anymore. If you don’t have 40% say “very disappointed”, then you need to tweak your service because it’s not essential to your customers yet.

To-Do’s:

  • Sign up 30 customers for a trial run of the service. 
      • Send basic invoices using Paypal each month to charge 
  • Personally conduct a trial run of the service by over-delivering on their asks
      • Remember, this is a highly manual task that the target user doesn’t want to do. I think I can do this by myself for ~30 customers. I’ll probably hire my two favorite Fiverr VA’s to help me if I get too busy
  • Frequent check-ins with customers to understand value being delivered and desired value that isn’t being delivered
      • I’ll reach out directly to ~3 customers per week and ask them if I can hop on the phone with them to ask how things are going and where the service can be improved. The hope is this will be a ~30-minute phone call
      • I’ll also use Typeform to send out the survey that tests to see if people are “very disappointed” without the service
  • Buy domain name & set up Cardd landing page 
      • I’ll buy a Domain name from Bluehost (where I have all my domain names)
        • The implication here is I’ll name the company whatever domain name is available. I don’t think the name should take more than a few minutes to do
      • Cardd is a really nifty “one page” website builder that is cheap and easy to do. I’ll set this up now so Google starts to recognize that the site exists, which will help on the indexing of the site and improve SEO. It will also allow me to sign up a waiting list

Tools utilized and cost

  • Fiverr VA’s (~$100/month for two; they’re $4 an hour)
  • Carrd: $19 on the year
  • Bluehost domain name: $50 per year
  • Typeform (free)
  • Paypal invoice (free)

Cost thus far

$205 for phase #1.

This trial run phase is mostly VA cost for 3 months. This cost for this phase is $300 for VA’s, $19 for Cardd, $50 for Bluehost, so $370 total.

All in, the cost is $575.

However, let’s assume I do have 30 customers per this trial period and my hypothesized price of $300 a month is right. If that’s true, then monthly revenue is $9,000 a month and I’m very profitable.

Go/No Go Decision:

Do we have >40% “very disappointed” or a clear path to get there?

That’s the key question here. If I’m able to help my clients and overdeliver with the team of VA’s, then I think it’s possible to get to 40% disappointed. If and when that happens, then I can proceed to the next steps. If customers aren’t happy and are leaving frequently, then I need to tweak the service until things are all good to go and I’m ready to proceed to this next step.

As before, my fiancee’s input will matter a lot to me here.

 

Business Plan Month 9-12: Professionalizing and Systematizing

Objective:

  • Officially set up the business
  • Begin to systematize inbound and outbound
  • Continue to work at the day job and consulting

Markers of Success 

  • Maintain >40% would be very disappointed if our service went away
  • Maintain 40 paying customers

To-Dos:

  • Continue delivering for my existing clients.
      • This is why I want to stick to 40 clients, so myself and my VA’s can manage this entirely by ourselves.
  • Set up the business using Stripe Atlas
      • It’s the easiest way to set up a “legit” business and it’s not even close. We use Legal Zoom all the time to set up LLC’s to buy property, but in this case as a legit startup, it’s worth building a complete corporation
  • Set up Mercury business bank account
      • It’s free and a bank account for startups, so I’ll set this up. I use a Chase business bank account for my consulting, and they charge me, so I hate that and I’m not going back to that.
  • Get Chase credit card
      • I’ll get the Chase credit card though because I absolutely want the points.
  • Get Hiscox business insurance
      • It’s an added cost that I don’t really want to have and face, but I need to have it. I’d rather pay $100 for insurance than $1,000,000 because I needed insurance and didn’t have it. Now that I’m “professionalizing” the business, it’s worth having it
  • Get brand guidelines and logos
      • Time for the company to look like a company. I’ll hire a design agency or someone on Fiverr or UpWork to come up with branding, color schemes, etc.
      • This might seem like an unnecessary expense, but I strongly believe branding and design matters. I’m willing to invest here to make this look great
  • Build WordPress site
      • WordPress is the way to go here. I’ll hire a team to build the site for me, and I’ll write the content to make it aligned with the themes I heard in the interviews and during my trial run
  • Migrate to Kinsta, Set up WP rocket, set up LinkWhisper
      • It’s the best in the business for hosting/security, website speed, and SEO. If I’m going to do this right, then I need to have all of these up and running
  • Set up Google Paid Account
      • This is cheap but a small thing worth spending 20 minutes on. This will allow me to have at the email address of dean@mycompanyname.com
  • Find keywords on Ahrefs to target
      • SEO is a long game (6-12 months at a minimum), so it’s time to start. I’ll use Ahrefs to find ~30 keywords to target. I’m looking for keywords that have at least 1,000 searches a month and a KD (keyword difficultly) of 10 or lower.
  • Hire blog writers and a formatter
      • I don’t love the idea of outsourcing content on some websites. For example, I personally write the content on my sites. However, this is a business and I need a lot of content. I’ll hire someone to write the content for me and someone to make nice graphics and format the posts.
  • Build system with Google Sheets, Trello, Monday, etc. to handle day-to-day work
      • I’m expecting I’ll build some sort of growth-hacked together system that uses Sheets/Trello/Monday or something to handle the day-to-day work of my business.
  • Survey users on satisfaction
      • As always…extremely important.

Tools utilized and cost

  • Fiverr VA’s (~$100/month for two; they’re $4 an hour)
  • Stripe Atlas: $850 (one time set up cost)
  • Mercury: $0
  • Chase: $95 (yearly card fee)
  • Brand Guide: $500 (one time fee)
  • Website: $1,500 (one time fee)
  • Insurance: $125 (monthly)
  • Kinsta: $30 (monthly)
  • WP Rocket: $49
  • Link Whisper: $9
  • Google: $0
  • Typeform: $0
  • Hiring Content Writers: $1,000 (monthly)
  • Ahrefs: $7 (trial)
  • Productivity management tool: $30/month

For this phase, including one-time fees, I’m expecting these three months to cost $6,407.

Cost thus far

I would have spent $575 leading up to these three months. At this point, I will be close to a year in and my total expenses would be $6,982.

Again, assuming I have the projected 40 customers now at my hypothesized price of $300 a month is right. If that’s true, then monthly revenue is $12,000 a month and I’m very profitable.

We’ll of course see if that is true or not, but I would be excited by these economics.

Go/No Go Decision:

Has there been progress to >40% “very disappointed” or a clear path to get there?

As before, my fiancee’s input will matter a lot to me here.

If I decide to “GO” at this point, then I’d quit my job and scale down the consulting dramatically. If I’m at this point, it should be an easy decision because I’m spending ~$3K a month in expenses with a  top-line of  $12K with no marketing at this point.

Business Plan Month 12-18: Controlled Growth

Objective:

  • Grow the business and add in as many pieces of software as possible to make it easy for me
  • Improve Systems to remove myself from completing the job
  • Dedicate myself to selling

Markers of Success 

  • Maintain >40% would be very disappointed if our service went away
  • Reach 100 paying customers, and no more than 250. I want to control growth here to make sure the business is all going right before exploding growth

To-Dos:

  • Set up System for hiring people
      • At the start of this piece, I mentioned how I didn’t want to hire anyone. Hiring people would mean needing to manage them, which defeats the purpose of a ~20 hour a week business that generates $300K for me and my family.
      • I’m going to be spending (big, as you’ll see below) on software to simplify as much as possible. However, I’ll need some dedicated full-time staff to handle this. I’m hoping to hire full-time VA’s through Onlinejobs.ph for  ~$650/person/month to handle as much of the work as possible. It may be possible I’ll need to hire people in the USA, but that will require a substantial increase in cost.
      • To hire people, I need systems that make things easier. I’ll build a detailed Notion.so workspace and I’ll also invest in fantastic training software like Trainual to teach the team how to do the job.
  • Hire People
      • I know I’d prefer to hire on onlinejobs.ph. What I don’t know yet is how to screen and hire the best people in a different country. I’m going to need to figure this out. If you know of any great resources here on hiring offshore full time employees, please let me know in the comments.
  • Reach out to 200+ industry blogs via Ninja Outreach
      • Ninja Outreach is a fantastic outreach tool. Similar to Woodpecker, it automatically emails people for you. Unlike Woodpecker, it can help find the right people for you to email and then automatically emails them. The goal would be to contact websites in the industry and get them to write about us. This would be a big boost to our SEO
  • Write BusinessWire and similar press releases
      • Media coverage and PR can be a gamechanger for a small company like this, and also help boost our backlink profile for SEO. I’m not talking about a $40 press release from The Hoth too. I’m talking about a top-of-the-line press release with Business Wire and other companies. I’ll have to pay for it, but it’s worth it.
  • Set up the financial intake and tracking software
      • If the company is making money, then I need to be tracking this carefully to understand what is working and what isn’t. I need to set up Stripe with the website to collect payment from customers. I need to set up Baremetrics to track metrics on payment. I need to set up Bench.co as well for bookkeeping
  • Set up growth software and sell
      • One thing  I’ve learned from consulting is that I am able to sell at a pretty high clip once I get someone on the phone. With that in mind, I’ll probably work in a sales capacity for these six months. The goal is to go from 40 to 100 customers, which means 60 closes or 10 per month. I think that is totally do-able.
      • I’m going to onboard an agency that I’ve worked with in the past here for cold outreach. They’re great and should get me ~20 calls a  month to close. That alone might be enough
      • I’m going to use Growthleads.io to manage Linkedin cold outbound, which should also work well. I’m a big fan of their software and I’ll use that to get some connections in the industry/hopefully get some people willing to onboard and try the service.
      • I’m going to use Close.ai for a CRM because I need something to track people I’m in talks with. I hate Hubspot and I’m not paying for SalesForce. Everything I’ve seen about that says they are the best damn CRM in the business.
      • I’m going to use Prospect.io to manage the cold outreach here. It’s similar to Woodpecker as above, except it also finds people for you to reach out too. It’s way more expensive than Woodpecker as a result though. I’ll only onboard it here for that reason.
  • Set up customer appreciation
    • Retaining your current customers is cheaper than getting new customers. For that reason, I strongly believe in sending Thank You cards to customers to make sure they know they are appreciated. With that in mind, I’m going to onboard Thanks.io because they are awesome at that and then automatically send people thank you cards when they join
  • Track customer appreciation
    •  It’s always important to know how you are doing and how people like you. I’m going to use ReviewPush to give me an aggregated view of how things are going out there and the reviews the business has. I need to know what is working well, what isn’t and what our overall reviews say. That way, we can adjust the service as needed

Tools utilized and cost

  • Insurance: $125 (monthly)
  • Kinsta: $30 (monthly)
  • Ahrefs: $7 (trial)
  • Ninja Outreach: $299 month
  • Notion.io: $50/month
  • Trainual::  $150/month
  • Hire 5 full-time VA’s:  $3,500/month
  • Press releases: $3,500 (one time fee)
  • Bench.co: $199/month
  • Baremetrics: $100/month
  • Cold Outreach agency: $500
  • Growthleads: $150
  • Close.ai: $75
  • Prospect.io: $150
  • Thanks.io: $100
  • Review Push: $100
  • Zapier: $50

For this period, including one-time fees, I’m expecting these six months to cost $38,400.

That’s a shit ton of cash.

Cost thus far

Total investment at this point would be roughly $45,000, and I’m about to increase it dramatically in the next section.

Again, assuming I have the projected 100 customers now at my hypothesized price of $300 a month is right. If that’s true, then monthly revenue is $30,000 a month and I’m very profitable still.

This is why I believe it’s very important to have the price point for the product be high and recurring. With 100 recurring customers, the business is bringing in $30K a month topline. Expenses are ~$7.5K a month, so the business still nets over $20K a month with only 100 customers.

Go/No Go Decision:

Am I comfortable enough in the stability of the business to invest even further in it?

Business Plan Month 18+: Scale

Objective:

  • Reach freedom

Markers of Success 

  • Reach 1,000 customers
  • Work no more than 20 hours a week

To-Dos:

  • Hire a web development team like Crowdbotics or Clever Road
      • It’s time to turn a manually completed product into a tech-enabled one. I’d hire Crowdbotics, Clever Road, or a similar company to turn my company into a full-on software that can do exactly what I need it to.
      • I’m not investing in a development team until the business has been around for a while. The reason why is this wait builds up a lot of great feedback on what works and what doesn’t. It will make the development process a lot faster and deliver a better product in the end.
      • The software will never fully replace the human element that is going to be necessary with my business, but it could allow me to keep the offshore team of ~6 and still manage to deliver massive value to 1,000 customers
  • Hire a marketing agency and scale digital ads
      • As you saw in the last section, I played an aggressive salesperson last phase. Now, it’s hopefully time to scale that back.
      • A salesperson will most likely need to be headquartered in the States. Since that isn’t my goal, I’ll do what I can to increase my spend on digital advertising to acquire customers without mee having to be on the phone.
      • I’m expecting to start my digital spend at ~$1,000 a month to build up a pixel and understand what my market looks like, but once we get marketing up and in a good place, we can ramp up spend to north of $10,000 a month for customer acquisition. I’ll also put this spend on my credit card in order to get points
  • Aggressively scale-up SEO strategies
      • SEO is the best and cheapest customer acquisition strategy. With that in mind, I’m going to ramp up spending on SEO by bringing on an agency to handle the blog on the site and another agency (probably authority builders) to handle the outreach.
      • This is another big-time investment, but it should help keep the business up and running and humming along

New Tools utilized and cost

  • Crowdbiotics or other web development: $35,000 to develop the web app, plus another $1,500 a month to maintain
  • Marketing agency: $2,000 a month
  • Paid Digital spend: $10,000 a month
  • SEO writer/technical agency: $2,000 a month
  • SEO outreach agency: $2,000 a month

At this point, I’m spending $6K a month already on salaries and software. Adding in these costs grows my monthly expense by $17,500 per month. That does not include the web development cost, but does include the maintenance cost. Total monthly cost is therefore approximately $24,000 a month.

Cost thus far

Total investment before scaling was $45,000.

Putting in the web development cost brings the total cost to $80,000 through month 18. In my model, I project the business reaching $300K a month in revenue by month 38.

The monthly cost from month 18-38 when I reach $300K or $10K a day is $24,000. Spending that over 20 months means a total spend of $480,000 on ongoing costs to the business.

With a total cost of $80,000 to month 18 and a cost of $480,000 from month 18 to month  38, it means my total cost to grow this business to my target of $300K/month is $560,000.

Total economics

I plan to spend $560,000 over a 38 month period in order to reach $300K a month in revenue. That means an average spend of $14,700 per month.

It also means once I make $300K a month, that my total investment payback time is slightly less than 2 months.

How confident am I in reaching these revenue totals?

As I promised before, I’ll go back through and update this post periodically with comments to see how right or wrong I was on this plan and projection.

Overall, I think I’m fairly safe in the estimates. I also don’t think this is going to be that difficult to do. I have 38 months to do this, and a plan of how I’m going to make it happen.

We’re going to see together what happens. That why I write my case study; so we can see together.

What happens when I reach the target of $300K a month?

Let’s fast forward: it’s 39 months from today.

The business is successfully bringing in $300K a month. The expenses are $25K a month, so I net $275K. I’ll pay a significant amount of that in taxes.

But then what?

The business has no full-time employees stateside. I have marketing, SEO, and web development agencies on retainer. I don’t need to work anymore on the business.

Knowing me, I’ll get extremely bored. I’ll want a new project to try and grow.

My guess is that I’ll decide to do one of three things:

#1: Keep the company as a “cash register” that requires minimal oversight on a daily basis

If it’s generating profit, and not taking up a lot of my time, then things are great. I might as well keep the business and use it to help fund a significant amount of real estate acquisitions.

In that world, things are great and life is good.

However, I know I’ll get bored. I’d probably quickly use the money from this company to help pay for launching a new business or two.

#2: Try to grow it

If the business can reach $300K a month with ~20 hours of week and an army of freelancers, then there is no reason it can’t grow to $1M a month with full-time employees. It’s not unreasonable to assume it could go to $3M a month if you bring on the right people.

This could be an interesting path to go down. I’ve always wanted to go down the “high growth startup” path, but I’ve been hesitant to do so.

Doing this would defeat the purpose of $10K a day. In that world, I’d be further away from my family. I wouldn’t feel “freedom”, which is the whole reason for doing this case study.

I’m skeptical here

#3: Sell it

This is an interesting one.

I feel like I would be hesitant to sell it because it would feel like my baby.

For a tech-enabled service like this, I’ve seen multiples in the range 7.5x EBITDA for LTM.

Doing some math, EBITDA should be ~$250K a month, or $3M a year. That would put the company valuation at $22.5M.

After fees, I’d probably net $21M in the transaction. After taxes, I’d net roughly $10M.

That would be a great payday, but I don’t know if it would be enough to encourage me to sell.

If I wanted to sell, the smarter thing to do would be to try and grow the business first. By increasing monthly revenue to $3M but losing margin due to added salary expense, let’s say the business nets out at $2M a month. That’s $24M on the year or a $180M valuation.

After fees and taxes, I’d walk with  ~$90M. That is much more interesting, and a world in which I’d be much more curious about. In that case, maybe I would take that deal.

I’m not sure.

But, I’ve got time to figure this stuff out! This is just the business plan after all.

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