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Bootstrap invoice for Staffing

Welcome to The Frugal preneur podcast I am your host Sarah St John this episode is what I refer to as a showcase episode where I feature a bootstrapped entrepreneur and they briefly share their tips tricks tactics techniques and tools that help them bootstrap their business and the successes and failures along the way my hope is that each of these showcase episodes will provide at least one valuable takeaway that you can implement right away in your own bootstrap business Journey now on to the episode so I've been in the technical Staffing and recruiting space for about 30 years and I've started and sold two companies in that space the rational behind starting the first one I I went to work for a mentor didn't identify him as a mentor right off the bat but became very clear very quickly that he was absolutely going to be my mentor and I worked for him for four years at the end of that experience starting building and then him selling that company and me being a an integral part of it I just felt ready interestingly enough and my family and all my friends suggested that I should just leave well enough alone and stick around with the company that bought the company as a a leader a director a manager what have you but I was not having anything to do with that I knew I was ready it was visceral it was it was in my gut and so I jumped in with virtually no money and one partner good friend of mine and we bootstrapped everything I think the two of us put in 10 grand a piece if I remember correctly and we never put another dime in and we just started selling rented bpace bought used furniture we had shared office space for a while and it proved quite successful and then when I did it the second time of course I was ready also didn't invest a lot of money though so it's been predominantly technical Staffing I'm a father of three young adult children Sports enthusiast an athlete like to meditate and and breathe but selling recruiting doing due diligence and then going through the process of selling and then working for the organization that that purchased the company that's kind of my thing so in contemplating starting my first business I had the experience of working for a mentor and we started his company from scratch so that was an excellent learning experience and I saw some of the stuff that worked and some of the stuff that didn't but essentially went at it the second time my partner and I with the clear intention of not spending any money we were willing to spend time we were willing to take risks but we wanted to generate Revenue before we started spending money wanted that money that was going to be spent to come out of the profits of the revenue that we generated but there were so many different it was a long time ago it was 25 years ago so technology was substantially different but I think the concepts are are the same you know you don't get a space you get b space you do buildup outs you negotiate aggressively on the leases and the links of term and the pricing we joined an association for I think a couple Grand and that gave us access to templates and legal advice and process and system advice and we went looking for furniture we went to warehouses where the people that bought new furniture and started companies that went out of business we bought that stuff for 3040 cents on the dollar and we did that with everything and when we started hiring people we focused on people that were interested and performance-based commission we did pay salaries but they were very low and then we paid very high commission relative to the industry which we had a lot of experience understanding who our competition was and how they did things and what they paid and how they trained and then we ratcheted up the training and we sold the opportunity for people that were just ambitious if you plug yourself into this system and do what we say you're going to be a six figure earner within the second or third year of your career so those are some of the things that we did to bootst dropped the business but it was mostly just a mentality generate revenue and profit first buy stuff later I would say the biggest success that we had in bootstrapping our business was just that mentality of not spending money in anticipation of collecting revenue and the negotiation that we did around all of the cash flow issues payment terms invoicing terms when we paid payroll how frequently so the idea was if we don't have to play the bank if we can collect money and revenue and then pay our expenses from that collected revenue and profit then we're going to just avoid all kinds of interest charges and potential failure the cash flow approach I think was the biggest success and the biggest failure I think is we were so good at selling that we didn't pay a whole lot of attention to systems and documentation at the at the beginning and when we hit the $10 million in Revenue Mark we were a mess because just changed the face of the business and had we had documentation in place like Sops and such and build and had built systems and processes we could have pulled away from the day-to-day much more quickly and began to focus on strategy instead of tactics so we stayed in the business too long and didn't build the documentation and systems and processes that would have allowed us to step outside the business and perhaps at those tasks to management level type people that would be the biggest success and the biggest failure really think though I mentioned this earlier I really think the most important piece was this commitment this to a mentality of bootstrapping this commitment to a mentality of being Frugal of not spending money until we collected money the most effective tip I would give someone is we tend to accept the terms that the industry gives us or that our competitors have established or that our clients or suppliers have burdened us with I went at every negotiation for money with the idea that I'm going to Define what the process is I'm not going to accept 30 days or 90 days or monthly billing or bi-weekly payroll I'm going to test all of those because if I can get my payroll out to monthly and I can invoice people weekly and collect weekly I got my money two weeks before I have to pay anybody and that sounds like a real simple idea but it's extremely powerful the other thing is listen better and talk less I was taught very early on in my career when you ask someone how much money they make you don't fill in the the answer you pause for like five seconds it feels like an eternity when you're doing it but I think entrepreneurs and salespeople in general have a tendency to get so excited about their idea that they lose an understanding of how critical it is to listen for feedback feedback from suppliers feedback from employees feedback from from Consultants feedback from clients all that you need to run a successful business is in the feedback but you can't get that feedback if you're not listening if you're just telling people what to do those would be the two biggest tips and tricks I could share you know hindsight's 2020 but if I had to share anything couple things to anybody who is contemplating starting a business particularly if you're going to bootstrap it and and use your own money the first would be don't try not to listen to the naysayers most of the people that are going to tell you that you shouldn't or that you can't are saying that because they shouldn't or they can't it really is true across the board so if you've got your stuff buttoned up if you've got a plan if you've got a process if you've got a unique component of what you do so that such that nobody else can get it anywhere but you that's really important go for it right you fall flat on your face just get back up that's called life that's just not Frugal business the other the other thing that comes to mind is this Frugal mentality I think that it's foolish most people think that a good idea is enough or a good product is enough that's a huge mistake you really want to be able to tell a story where you're taking and Bridging the Gap for your clients between where they are right now and where you can take them very specifically transformationally really from a extreme pain like an emotion like fear anxiety uncertainty and transforming that to certainty optimism and confidence you can do that with a product you can do that with a service until you figure that out it doesn't matter how good your service is or how good your product is so effectively what I'm saying is have that transformational journey in place but be willing to sell it to articulate it nothing happens until somebody sells something remember those two things you'll be fine I hope you enjoyed that episode and were able to take away a valuable nugget of information that you can Implement right away in your own business if you feel your story would be valuable for the listeners of this show please visit frugal.com