Hi. My name is SwordGuy and I am a serial entrepreneur.
I've started a goodly number of businesses. I'm glad I started each one of them, even those that failed. I hope you'll see why.
The Green Fields
My first business was mowing yards in junior high and high school.
Summertime in Memphis, TN can be brutally hot and humid. Plus I found mowing yards, weeding, trimming bushes, etc., to be incredibly boring.
I developed a deep and abiding hatred of yard work as a result of this.
So much so that I had only one condition on getting married, and that was I did not have to do yard work after I turned 30. I lived in an apartment until I turned 30 so I didn't have to it before then, either.
Psychologically, I got no satisfaction from doing yardwork because no matter how good a job I did, in a week or two it just needed to be done again.
Now, for a BUSINESS instead of a household chore, that's an AWESOME selling point! Nature generally conspires to give you more work to do! How great is that??!!
Other good reasons to like it: Very low cost of entry. The basic tools are not expensive, nor do they require a lot of training to do a decent job. Not only that, but it's likely you could find someone to loan you their equipment for your business if you mow and trim their yard as rent. After a season doing that you can afford to buy your own gear. The money is good for the time it takes to do the work. There are additional side hustles like pressure washing that can bring in additional money.
I'm glad I ran this business. It provided me needed funds for college and a small emergency fund when I got out of college.
I learned to approach people and ask for work. I learned how to negotiate for higher rates. I was terrible at it when I started but I got better over time. As a bonus, when my gas prices doubled during the first Arab oil embargo, I learned I didn't want to drive a gas guzzler. Unlike many of my fellow Americans, I remembered the lesson and never bought one - which will be the first of many lessons I learned that paid big dividends in ways I could not have expected before I got into that business.
This was a great starter business and I would recommend it to anyone as a side hustle. It's also scalable because you can hire people to do the work as you get more experience and contacts. It's been a while since I was involved with this one so HOAs and lots of illegal immigrants doing the work may have changed things in important ways - so do your research.
My wife and I met in a historical recreation club that focuses on the medieval world. We wrote and published a quarterly how-to journal for folks who wanted to learn how to do arts and crafts from the early medieval period. We did this for a period of 8 years before we ceased publication. At its peak it brought in about $1500 a year in profit. Doesn't sound like much, does it?
That was a 25% raise in our take home income at the time. That was HUGE! HUGE! Bigger than Donald Trump HUGE! And actually true, too. :) When you're living on 1/3 median family income and paying some child support too, a 25% raise is a truly welcome thing.
If that's all we got out of that business (and it's pretty much all we could have hoped for), we would have been very happy we engaged in it. But we got way more out of it.
We both learned to research complex topics and write informative and interesting how-to articles about what we had learned. We learned how to twist volunteer arms to write unpaid articles for our publication and to do it remotely - in an age when there was no internet or email and long-distance telephone calls were well beyond our budget. So, let's inventory those skills we improved: Research, Reading, Writing, Publishing and Project Management.
My wife didn't start college until she was 41. Those skills helped her do very well on her undergraduate degree. So much so that she got a full scholarship and a total of $36,000 tax free stipends for her masters and doctorate degree. Those same skills got her lots of job interviews in a market where other doctoral graduates were happy to get even one interview. Total value for her career: $200,000.
Those same skills made it easy for me to decide to write technical articles and papers about software development and to present some of those at software development conferences. I got a $15k a year raise by switching jobs to a new consultant company because the owner had attended one of my talks. I also co-authored a book on a software tool. $10,000 in royalties and an extra $20,000 a year in salary because that book drove sales for my employer's consulting services. Over the 10 year run I got from that book, we're easily talking another $200,000. Plus I didn't have to do near as much scut work as I otherwise would have had to do.
$400,000 isn't a bad bonus return on a $1,500 a year business endeavor.
I rate this business as a resounding success.
And if you had told me back when we started that piss-ant $1,500 a year business that it would be responsible for another $400,000 in returns I would have though you were an idiot. Pretty much like most folks do when we try to explain how to FIRE.
I learned to program on the job as a value-added incentive for parents to buy their kids personal computers from me. I would teach the kids basic programming. Then I really learned to program because I sold some custom software development to a school and the programmers weren't getting the job done. So I cloned their work and started cranking out code.
My wife and I were working at a small Pop-sized (i.e., not even big enough to be a Mom-and-Pop) software shop early in our marriage. I was a lousy salesperson and so was she. Our employer snorted and drank up any profits and he went out of business. We went to our customers and offered to finish the software for them and support it. I had seen a market opportunity for our software that gave us a 10% chance of ending up multi-millionaires.
Well, that didn't work out.
But I really learned how to program during that time period. And document. And train. And manage projects and customer relations. All those skills served me very well once I got a corporate programming job.
The business was a financial failure. We were dirt poor while we did this. But it set the stage for real improvements in our life. I'm glad we did it.
Software Consultant Business
I didn't start this business, two other folks I knew from presenting at software conferences did. But I bought into it as a 10% partner.
The business failed. None of us were good salesmen. That's when I learned I wasn't likely to ever become a good salesperson. It just wasn't something I would be likely to enjoy doing. I learned more business skills that have come in handy.
The biggest lesson you can learn from this business opportunity is how to fail forward, not backward. I realized the company just wasn't going to make it. I suggested we shut down the business and call it quits while we were still ahead. The other two weren't willing to do so. I sold my shares (purchased for $55,000) back to them for $1. And I was happy to do it. I was free from doing something I simply didn't want to do. My partners stuck it out for a couple more years but they piled up a lot of debt to do that. That debt pulled them backward because it hampered them from getting ahead in the next business venture. I, on the other hand, took the lessons learned and waited until I found another business opportunity.
So even though the business failed, I'm glad I gave it a try. I learned a lot, had fun, and set myself up for success at my next venture. Plus I would never have to wonder "what if?" on this particular topic.
Rental Property and Flipping
I ended up settling in a military town because that's where my wife got her job. People come and go on a frequent basis in the military so there's a lot of rental property and also a lot of demand for it. It's a low cost of living area. I started learning that rental property was a good business prospect in my area and from MMM and the associated sites I found from it, I learned what I needed to know to get started.
Remember that lesson I learned about not being a good salesperson? This business is great because we don't have to BE a good salesperson. All we have to do is create a good product. That's awesome!
I've learned a lot about creative financing which will serve me well in years to come. As a retail buyer of homes over the years I thought I knew how to buy a house. I did know how to buy a house - at full price! Now I know how to buy them for 66% to 40% off - and that's a hell of a lot better!
We have a total of 5 business properties.
We have 2 properties rented out at 1.7% per month of purchase and renovation cost.
We have two more properties we're getting ready for the rental market and one to be flipped. (I would recommend 1 at a time if you're doing the work yourself!!!)
Our old home was bought at retail price back in 2001. This is rental #4 even though it will be ready before #3. We expect to rent it out at 0.67% to 0.88% of current value, but that's 1% to 1.33% of the original purchase price. That's a lousy rate. But it's workable for a few years. Most of the expensive stuff is (or will be) pretty new by the time it's rented out so major repairs are fairly unlikely. We'll milk it for cash flow while we get the other 2 properties repaired and rented out or sold. Then we'll probably sell it and redeploy the cash into other investments. We might also decide to sell as soon as it's ready if the market price is substantially better. Last fall (before we started working on it), the realtor thought we might get $170,000 for it after repairs were done. Zillow values have been climbing up over the last 4 months. If we could get $210,000 I would probably unload it right away.
We expect #3 to rent out at 1.7% to 1.88% of purchase and renovation cost when we get it ready later this year. That's a good rate.
We expect to flip property #5 in 2018. After that we'll decide whether to also sell #3 and redeploy the profits into better quality rentals. Our intent was to do every 5th or 6th property as a charitable action and this house is being done for that reason. It's an architectural gem that was in real danger of being torn down due to neglect or as a money-making opportunity. We're restoring it. When we decided to buy this we had no real expectation of making any money on it but we were certain we could break even. Now, as we learn more, it looks like we might make a pretty penny on it.
I expect this business will be a success. It's certainly getting us to FI far earlier and much more safely than we otherwise would have.
And it's been lots of fun (and lots of hard, hard, hard work).