- Posted by Paul Towers
- On May 4, 2015
- 0 Comments
- Google Adwords, Selling a Business, Starting a Business, Your Professional Resume
Ninety nine percent of people who tell you they started a business for less than $100 are probably lying, or trying to get you to sign up to some pyramid scheme. This however is my story of an actual business that I created, launched and ran for over three years before successfully selling it in 2014.
This business taught me a lot about what it takes to launch a business from scratch and with minimal capital. I am a firm believer in operating a business, especially at the early stages, using lean principles. Every dollar invested should have value, but so too should every dollar that is saved. To understand the value of money you have at your disposal and how quickly it can come and go is important in positioning yourself and the business for sustainable growth. Just like too little money can result in the death of a business or idea, so too can too much money! Especially if the owners get in over their head and think the money will last forever or keep on rolling in.
This is really a story about being smart, reinvesting returns and growing to a sustainable level as quickly as possible. The year was 2011 and it had been three years since I owned my surf store. I had been working in the property industry but I craved something more and missed the drive and passion that comes from owning your own business. As a result it was time to branch out and identify new opportunities.
This opportunity actually came to me through a colleague who mentioned that his partner was having trouble with her resume and was not getting many, if any, interviews. He knew I was good at writing and asked if I could assist. I re-wrote the resume from scratch in a couple of hours and a week or two later she was inundated with interviews. An idea was born and it was time to implement.
My research into the market suggested this was a viable business strategy, but I wanted to run a “Proof of Concept”, before committing to the idea on a full time basis (and hence quitting my job). As a result I obsessed over every dollar and took it as a challenge to launch the business for as little as possible. In order to do this the first step was to take stock of all the resources I had and would need for the business. Laptop, tick, printer, tick, internet access, tick! I was pretty much good to go and didn’t need to invest in any of these tools. So before you jump in and buy a shiny new macbook, see if you can get by with your shitty five year old laptop like I did.
Secondly I needed a portal to advertise and a business name. Business name registration in Australia was $33 per annum and that was my first “purchase”. Following that I needed a domain and hosting. I didn’t know anywhere near as much as I do now about building a website and Search Engine Marketing, but I purchased a .com domain and the initial months hosting for around $20.
I had blown half of my budget so far, but the hardest part only required an investment of my time. And that time was required to actually build the website and create the content that would encourage people to purchase a “resume” or “resume and cover letter” through me. Within a couple of days I had everything I needed and was ready to launch.
To launch successfully though I needed customers and the easiest way I found to get customers was through Google Adwords. I am a massive fan of online marketing, including Google Adwords and Facebook Ads, as you can refine the ads to very specific markets and can accurately see where your money is going. For my very first Adwords campaign I set aside $40 for one weeks’ worth of ads. My total investment in the business to date was $93 and I still had $7 to spare! The day after launching my business and associated Adwords campaign I had my first paying customer. $200 paid in advance before they received their resume!
Clearly you can see I was already in profit, but this highlights another important point about this business, the margins were fantastic. Over the course of the three years I owned the business the typical acquisition cost per customer was $40, with the immediate return from each customer typically being $200 in sales, and sometimes as high as $500 or more. All this was generated off Google Adwords campaigns!
To continue the story I ran the business in a “part time” capacity for a few months. Generating around $200 to $600 in sales each week. It was however time to ramp it up a notch and I left the property industry to grow the business and work on it full time. Ramping up the ads so I was spending 5 x or more than I was previously on Google Adwords was all that was required to take the business to the next level. I was now earning more money than I did in the property industry and had the freedom and flexibility to pursue other goals and ideas on the side.
In summary this business taught me a lot. In particular I gained a great understanding of Search Engine Optimisation, online advertising, website creation and content, lean startup principles, and how to leverage initial cashflow to continually fund the business without a fresh injection of capital. In 2014 I successfully sold the business to an interstate buyer.
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