Author Topic: SwordGuy's Entrepreneurial Odyssey  (Read 1472 times)

SwordGuy

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SwordGuy's Entrepreneurial Odyssey
« on: March 01, 2017, 06:28:06 PM »
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.

Historical Publishing

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.

Software Development

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).
« Last Edit: March 11, 2017, 06:51:57 PM by SwordGuy »

swick

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #1 on: March 01, 2017, 06:40:53 PM »
Awesome post, SwordGuy!

I love your drive and outlook and how you evaluate the success of your businesses while considering the long-term effects and payoffs.

Don't suppose you have digital or any more paper copies of your journal? My aunt is big into SCA and I bet she would LOVE them!

Failing forward (or fast) is also another important concept that doesn't get talked about much and I think it is an important one.

SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #2 on: March 01, 2017, 06:44:08 PM »
Swick, I'm sending you a PM with a link to some of the journals.   A friend scanned a few of them in for us.   


SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #3 on: March 01, 2017, 07:04:19 PM »
My next business will be as an artist.

I won't be able to really devote the necessary time to this until I retire from my day job next year.

Time will tell whether I ever make much money from it.  I expect to be able to cover the costs of making it and that's all I need it to do.  (Oh, the joys of FI and NOT being a starving artist!!)

Potential revenue streams include:

1) hand-made fine jewelry sold online and via jewelers and galleries.

2) adult training classes in my in-house studio, local schools, or remote craft schools.

3) classes for home-school kids in my in-house studio.

4) architectural art - light switch and outlet plates, decorative wall and fence panels, outdoor art, door and kitchen fixtures, furniture, tiles in glass, metal, ceramics, wood or enameled metal.

Because we'll be comfortably FI without this income I'll be free to make what I darn well please (subject to material costs).   And if I make enough to cover those costs, I'll be free to make more of what I darn well please.

Plus I'll be able to hang out with lots of really nice artists I've met over the years. :)

This will be a win regardless of whether I make money.  And that's what FI is all about.

swick

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #4 on: March 01, 2017, 07:23:16 PM »
My next business will be as an artist.

This post warms the cockles. I noticed in you OP you didn't mention your jewelry. When the time comes, hit me up! I use to run a gallery and art centre and a lot of my clients have been artists who are looking to actually make a living off their art. Also, education teaching art classes and curriculum design is my jam. I'd be happy to do some brainstorming with you :D

Genevieve

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #5 on: March 01, 2017, 07:38:16 PM »
Awesome SwordGuy! I love your story about how you really multiplied the value of your skills and learned what NOT to do.

SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #6 on: March 01, 2017, 08:01:25 PM »
My next business will be as an artist.

This post warms the cockles. I noticed in you OP you didn't mention your jewelry. When the time comes, hit me up! I use to run a gallery and art centre and a lot of my clients have been artists who are looking to actually make a living off their art. Also, education teaching art classes and curriculum design is my jam. I'd be happy to do some brainstorming with you :D

That is a deal!   

I didn't mention the jewelry because it's not a business yet.   That would require a different kind of insurance from a hobby.
Since I'm not making a lot of jewelry at the moment, turning it into a business would make it cost more. :(

However, writing about things IS a business as we still have our historical publishing and software business.   As I have more free time I'll start writing how-to content for books, journals, and online training.   

I forgot to mention a story about the technical book I wrote on software product X.

I mentioned to a programmer I knew that I was going to be writing a book on the software product.   They looked at me and said, "I've always wished I knew the product well enough to write a book about it."   Then they sighed a bit.

I looked them in the eye and responded, "I don't know the product well enough to write a book about it either, but I expect I will by the time I'm done."

I think in that moment I could have hit them with a brick-bat and they wouldn't have felt it.   The idea of actually writing the book to learn the software well enough to write the book totally rocked their world view.

« Last Edit: March 01, 2017, 08:07:14 PM by SwordGuy »

pianomom

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #7 on: March 02, 2017, 12:15:36 PM »
It sounds like you're doing great! I especially liked how you have seen your skills transfer from business to business. The fail forward concept with the software development company reminded me of sunk costs and recognizing when it's worth stopping something, even when you've put in money and hard work.

Stachey

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #8 on: March 11, 2017, 04:24:12 PM »
Swordguy this description of your entrepreneurial efforts is fantastic!

It reminds me a lot of one of my favourite books:  "How to Make a Living without a Job" by Barbara Winter.
She writes all about creating multiples profit centres and has many suggestions on how to brainstorm new MPC ideas.

I think being able to let go of something that isn't working is an important skill to have that many people need to develop.
http://forum.mrmoneymustache.com/journals/writing-myself-a-happy-ending-hopefully/

If you open a Tangerine account with $100, you will get a $50 sign up bonus!  That can't be a bad thing.  Use Orange Key: 40425919S1

marble_faun

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #9 on: March 11, 2017, 05:00:19 PM »
~ posting to follow ~
"Time flies pursue it Man. For why? thy days are but a Span."

SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #10 on: March 11, 2017, 09:08:24 PM »
Deposited $1206.39 from our rental homes today.   A bit lower than usual due to some small repairs.   If I didn't have a day job, I could have taken care of them myself and saved some money.

Here's a lesson about the rental property business we thankfully didn't learn the exceptionally hard way - though we did learn it the hard way. 

Don't finance your properties so tightly that you can't deal with an unpleasant cash flow problem.   We had two issues crop up in our first year of business.   

We had just taken an HELOC loan to purchase rental #3.   We closed on the house and then my mom got very ill.    We weren't able to make any progress on the house for months - but we still had to make the loan and utility payments.   If we had been really tight on our finances this would have REALLY hurt and might have caused our business to fail.

2nd, we've been setting aside cash to handle vacancy and repair costs.   We had an HVAC system die in the first year.  No particular surprise since they were older homes, though we had hoped we would get a few more years out of it first.   The amount were' holding back for repairs is enough for the long term, but it would not yet have accumulated enough to cover this major expense.

Thankfully, we are not (yet) counting on the income from our rental properties.  So, instead of spending any of it, we had been saving 100% of rent receipts for that year.   We were able to pay cash to repair the unit instead.  Our intent was to have a sizeable kitty of cash set aside to cover repairs before we retire from our day jobs.   Because we're conservative with our finances, we want to have at least $5,000 set aside for each property.   $20,000 (four properties) is enough to cover a full HVAC system replacement, a new roof, stove and refrigerator.  And probably a bit more.

SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #11 on: March 11, 2017, 09:13:17 PM »
Here's an example of someone I met who did not "fail forward" in their business.

They retired from their day job with a sizeable nest egg.  They then proceeded to invest their entire nest egg into a new business venture they wanted to run. 

They not only failed, they lost their entire nest egg.

Now this 65+ year old guy is doing handyman work around the neighborhood to help make ends meet.

Golly.   I so very much do not want to EVER be "that guy".






stashgrower

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #12 on: March 12, 2017, 07:48:38 AM »
Well done, I like the lessons about upskilling and hadn't thought of the falling forward idea.

SwordGuy

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Re: SwordGuy's Entrepreneurial Odyssey
« Reply #13 on: March 13, 2017, 04:19:59 PM »
Well done, I like the lessons about upskilling and hadn't thought of the falling forward idea.

Thanks!

When we were dirt poor I worked horrendous hours to claw our way out of poverty.

Once I got into a middle-class job, I didn't want to do that again!

So I made a promise to myself about my day job. 

That employee handbook was chock full of rules and conditions.  But one of them was that I worked 40 hours for pay.   After 40 hours it was my personal time, and how I spent my personal time was my choice. 

I would only work extra during my personal time if at least one of three conditions was met:

1) It was a true emergency at work.  (As opposed to a scheduled emergency due to management choices.)  It's important to be a team player.

2) I learned skills that would advance my career.

I saw no point in treading water to stay where I was, I wanted to get ahead.

3) I taught my colleagues skills that would advance their careers (and mine, because teaching is a useful skill).

I decided upon one other choice, that I would not do things the wrong way unless a manager sat there and made me do it that way.

The combination of those choices meant I spent fewer hours dealing with emergencies because I did things the right way.  (Not necessarily the perfect way, but definitely the right way.)

And I learned more new skills which let me do things the right way faster and faster.

Oh, that investment in my colleagues?   When they went to a new company, they were more likely to get promoted and be considered a star because they had learned more.   So I had people there who were more likely to be in a position to hire me or to be believed when they recommended me for hire.