I recently took a short trip down to Tampa to visit some friends for a weekend of fun in the sun and the excitement of boating on the bay. I have a lot of friends in that area and I was worried that I would miss out on seeing an old friend I hadn’t seen in about six years. Chris and I met during a military training course. It was only two weeks, but like many serendipitous friendships, things just “clicked” and we stayed in contact for the many years that followed. Before I knew it, Monday had rolled around and I would be flying out in a few hours. I texted Chris and took a dip by the pool.
In the six years since we had last seen each other, Chris had left the military and pursued his entrepreneurial dreams of starting his own company. He chose a very unique niche within the home services market that caters to luxury clients. Chris responded that he was swamped with business meetings, but he did have some time to meet me at my hotel for a lunchtime cocktail. Chris showed up looking much like I saw him last, but he had a certain vibe going for him that you only find in people who are successfully pursuing their passions in life. Our meeting explained why.
Over the course of two years, Chris took his startup company from an idea to a profitable business in an unsaturated niche market. He still runs the business out of his home, but he has hired several employees and has been courted by others in related businesses for buy-outs of their respective companies. Chris explained to me that his company sought to be the premier choice for luxury clients in the Tampa Bay area and that he had some pretty solid business philosophies that provided the backbone for his quick growth.
Take Care of People
The thing that struck me most about Chris’ business was that he put a premium on the people he employed. As he put it, “We’re a human capital business.” Very high-end clients would pay his company to provide home services and they expect nothing but the best. To that end, Chris ensures that all his employees have the most thorough background checks in the industry and that they are completely trustworthy. This costs money, but more importantly, it builds brand equity.
“Most of my employees are W-2 wage employees versus 1099 contract employees. When I started this company, I felt it was important to take care of people and to ensure they were treated the way I would want to be treated.” His passion for being a good boss was evident from his tonality and gestures while recounting his employment practices to me. “I took a look at the wage averages according to the Bureau of Labor Statistics and made sure that we were paying better than that.” The philosophy Chris has is that he expects more from his employees than “average” and he is willing to pay them accordingly.
A lesson to be learned for those of us interested in starting businesses is that we shouldn’t cut corners. This is especially true in regards to the people that are working with us to make our dreams become a reality. Similar services pay less and charge less, but they also deliver less. If you are interested in starting a business of any kind, do you want to be lumped in with the average run-of-the-mill cheap labor outfits or do you want to be a brand that stands on the principal of true quality? This in itself defines the level of success you can achieve.
“Doing Business the Old Fashion Way”
In light of the luxury market that Chris caters to, which includes professional athletes and other extraordinarily successful people, I asked him about lead generation. How does he find these clients and how did he do it in such a short amount of time? Chris nodded knowingly and said, “My clients aren’t on Google. They don’t have time for it. They have gatekeepers who manage these things.” In the luxury market, time is very much money to very wealthy individuals. “Many of my clients have been burned by businesses they found randomly, so many will only do business through personal referrals.”
Chris recounted how he’s often reminded how he should be involved with search engine and social media marketing, but his strategy is a bit more old-fashioned. “I prefer to do it the way my father and my grandfather did it. They were in business and they got business through handshakes.” Business networking with local real estate and property management professionals has been a great success for Chris. The personal connections he has made has led to tangible results for his startup.
Standard marketing advice for business owners these days includes search engine optimization and social media engagement. While these are important, Chris touched on something that shouldn’t be ignored. He said, “I think business is still done largely in the same way it was 100 years ago.” His point being that relationship building is still the most important aspect of successful business. Whether you want to launch the next Facebook or you want to start a side-business walking dogs, this valuable insight is worth considering.
Choosing Your Customers
The choice of pursuing luxury clients seemed incredibly bold to me. Here was a guy who had not owned a business before, who was fairly new to the market, and was choosing a customer base that would primarily consist of people who were financially well off. He did not have these connections prior to starting the business and he had to work hard to establish the relationships that make up his current account roster. “There are a lot of people with small properties, only a few hundred square feet, that could potentially use our services. They are not the client we are focused on.” As he diplomatically pointed out, sometimes smaller clients consume the most time and resources. He recounted to me examples of other businesses that have exponentially larger account numbers, but do comparable revenue. The reason is because they seek to serve everyone instead of serving the client base that is right for them.
In Tim Ferriss’ “The Four-Hour Workweek”, he talks a little bit about “firing customers”. In that book, he told stories about his supplement business which had several problematic customers who repeatedly drained resources from the business. Ironically enough, these often were the customers that provided the least amount of revenue to the bottom line. Eventually Ferriss decided that it was time to part ways with customers who caused more trouble than they were worth.
Never be afraid to say no. Sometimes customers will come your way that are simply more resource consuming than their business is worth. There is a hesitation among small-business owners to turn away anyone who comes with cash in their hand, however this reluctance can cause more problems in the long run. As Tim Ferriss often suggests in his writing, consider what 20 percent of effort or customers will drive 80 percent of your revenue. That magical, revenue driving 20 percent is what you need to be focused on.
“I’ve Got a Flight to Catch”
My conversation with Chris was exhilarating. Just six short years ago, Chris was my peer and in the time I had seen him, he had completely changed his life. Despite the risks, he made a go of entrepreneurship. He didn’t have roots in Tampa, nor specific experience in the sector he entered. What he did have was management abilities that he learned in the military and a drive to make things happen. From our short time together, it was clear that Chris is going places. I glanced at my iPhone and said, “I could talk to you all day about this stuff, but I’ve got a flight to catch.” We shook hands and headed our separate ways.
In the hours that followed on that flight home to the northeast, I reflected on what it takes to build a business and work for yourself. I think a key component is courage and confidence. Courage doesn’t mean being fearless. It means being brave in the face of uncertainty. Confidence in yourself and in the value you are bringing to the marketplace is what characterizes entrepreneurial bravery. Perhaps you, like myself, dream of a life immersed in entrepreneurship. What’s holding you back? For me, I know it’s the fear of uncertainty and for abandoning a guaranteed paycheck. Perhaps the better focus is the rewards that we can reap. Self-determination, self-reliance, and personally giving extraordinary value to others are much better things to focus on than fear.
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