Category: Podcast

Chad Peterson is an entrepreneur, author, and award-winning business Broker. His firm, Peterson Acquisitions, was recently acknowledged as one of the best business brokers in the nation. Chad successfully handles business transactions across the United States, and occasionally around the globe. His M&A firm works on deals from $1 million to $25 million, and in some cases exceeding $25 million. He handles the transactions from start to finish with tenacity and results. He lives great life, traveling and making deals with movers-and-shakers around the country, but Chad started out with a more humble beginning.

Chad business journey started when he was a child.  He hustled as a kid, walking dogs, shoveling snow, mowing grass, trimming trees, and cleaning out gutters.   He developed a thick skin by and ‘can do’ attitude by cold calling and knocking on the doors. He learned how to prospect, how to garner the trust of clients, and a how-to work hard to earn every dollar.

Chad also wrote the book From Blue to White, A Working Man’s Guide to Self-Employment, where teaches people how to transition from employee to self-employed.  This book was well-received and garnered attention from the likes of Scott Alexander, author for Rhinoceros Success, one of Chad’s favorite authors. Scott Alexander not only endorsed the book, but he also wrote the foreword.

 

Learn More About Chad Peterson

• Peterson Acquisitions
• Chad Peterson on LinkedIn

 

Meet Chad Peterson & Peterson Acquisitions

Phil Singleton:  Hello, everybody, and welcome to another episode of the Local Business Leaders Podcast. I’m your host, Phil Singleton. Today our featured guest is Chad Peterson, founder and CEO at Peterson Acquisitions, an award-winning M&A firm. Chad Peterson is an expert business broker that helps business owners sell their businesses and move on to new business opportunities. Chad, welcome to the show.

Chad Peterson:  Thanks, Phil.

Phil Singleton:  First before we start talking and digging into the nitty-gritty about what you do and how you help companies sell their business, tell us a little bit about your background as an entrepreneur, a little bit about your beginnings. What got you into the business world and your journey basically and to become a business broker?

Chad Peterson:  I hate to go all the way back to childhood because I know we don’t have that time and I don’t think everybody wants to hear it, but in short, I was that kid that was always doing something. Before I was even strong enough to push a lawnmower, I was doing it. I’ve always been an enterpriser. Business for self has always been my deal. I knew the school wasn’t for me. I knew that it didn’t have … The education I need was not in those walls. I was always trying to figure out a way to make my own money and follow my own sword, so to speak.

Chad Peterson:  I built several companies. Even just as a young kid, I sold my first company when I was 19 years old and moved on to flight school, became a pilot and lost my career in 911. In fact, I was flying an airplane while 911 happened, about 15 minutes from where George W. Bush had Air Force One parked, and my flying career was over, and so it was back to, well, what do I do now? I just went back to my self-employed roots and started a company and had 120 employees, and I ended up missing the boat on selling it before the ’08 crash. At that point, it just sparked a real big passion inside of me to make sure that I went out there and let people know about timing and selling their business, and when is the time to sell your business?

Chad Peterson:  I started helping people package their business up and sell it because I’ve built and sold several companies of my own. I know it inside and out. A dear friend of mine just told me very lightly, it was just such a soft suggestion, he said, “Chad, you’re so good at this. Why don’t you help other people do it?” That’s when it really got created, because I had never thought about helping other people do that. I was always doing it for myself. Long story short is I built and sold companies my entire life. I know exactly what business owners go through. Really I think what every business owner faces is burnout and boredom. It’s right around then that you want to sell your business.

Chad Peterson:  What I can do is I can take somebody that has done well. They’ve built it. They’ve made themselves good money. They’ve really done well, but their passion is waning and they’re getting bored. They’re getting burnout. That’s when I want to sell what they’ve built and get that business owner on to a new opportunity. I always tell people, I don’t retire people. Those that think that they’re going to retire and get a new set of golf clubs and golf every day, that doesn’t work. People get miserable. Everybody has to keep working. Everybody has passions they have to pursue. I don’t retire people. I just get them on to a bigger and better thing, something they’re more passionate about, something that gets them out of bed every day because they want to go to work.

Chad Peterson:  It’s not about retiring. It’s not about giving up. It’s about finishing well. I’ve done that for myself countless times and moved on to other ventures that I’m more passionate about. That’s what my passion is. I’m passionate about helping people sell what they’ve built and move on to something else.

Phil Singleton:  That’s so awesome. Tell me a little bit about that because one thing I think is really interesting about you, Chad, is that you don’t fit the typical profile of I think what many of us would think as a stuffed shirt M&A finance person that probably has never actually run a business or have been in the trenches type of thing. When I read about you and when we talked in the past, one of the things I know about you is you actually built businesses, main street businesses too, not just fly by night internet type things just as a hobby but actually built real businesses with employees that built real things.

Chad Peterson:  Right.

Not Your Typical Stuffed Shirt Business Broker

Phil Singleton:  How has that served you and how has that do you think make you different I think than the typical business broker out there, at least the typical impression other people have about the industry that you’re in?

Chad Peterson:   That’s a great question. To my surprise, I have not met anybody in this industry that can even compete with me. That sounds like a very braggadocious statement. That sounds very pompous, but the fact is that most people that are in my industry, they might have been a VP somewhere. They might have been a C-level executive somewhere. They might have had a good management job or perhaps they were in the real estate business, didn’t do too well and then saved up enough money where they could go work for a firm such as mine and survived maybe a year without a paycheck because in order to get in this industry, you do have to have some savings because you don’t have a book of business. You really have to really work hard to get that book of business. People just don’t have the grit that I have, period.

Chad Peterson:  I’ve been self-employed my whole life. Hard work, that’s just what I know. I’m not trying to be a jerk or anything, but the people in my industry, there’s no competition. These guys are in the office around 8:00 AM, maybe 7:30 even, and nobody wants to hear from anybody at 7:30 or 8:00 in the morning, not in our industry. They usually take lunch around 11:30. They take an hour and a half lunch, come back to the office, and they’re usually having a cocktail by 2:00 PM. That’s who they are. Typical profile of a business broker is mid-50s, maybe even getting into his 60s, not highly motivated. Maybe they’ll close two or three deals a year, and they can make a living, and that’s what they’re happy doing. That’s not who I am.

Chad Peterson:  I do more deals individually than anybody out there, and I’ll put my money on that. I work nonstop. I love what I do. I’m passionate about what I do. It’s one thing to be a broker, and to get two people put together and be looking for a commission and letting those two people work it out and seeing what happens. That’s not what I do either. I get two people together and, number one, I start with the right people. I don’t bring on the wrong sellers, and I certainly don’t introduce the wrong buyer to the wrong seller. I make sure it’s a match first because guess what? The bank is going to do that too. Why would I waste my time? I get the right buyer and the right seller put together, and then I teach both of them through the process to get to the finish line. I assist them in creating a friendship.

Chad Peterson:    I told a guy just last week, I said, “Jim, treat this gentleman like he’s your best friend because when was the last time that even a great friend put $1 million in your pocket?” His answer was, “Nobody has ever put $1 million in my pocket.” I said to him, “This guy is your best friend.”

Chad Peterson:  I make sure that people approach the transaction properly. I’m very hands-on. I’m in the mix. I’m making sure that the buyer and seller are on the same page and we’re getting to the banking process, and I’m not checking out at 2 PM to go have drinks, and I’m not putting in three-hour work days. I think there are two types of hunters. The guys that are sitting in the lodge talking about that one that got away, and the guy that’s out there taking thorns in the side because he’s out there hunting it down and trying to get things done. I’m never going to be the guy-

Phil Singleton:   Yeah. Let me bring it home for you here on this because what I think … Look. I’ve never actually sold one of my own business. I guess sold some parts of businesses before and have been involved in some transactions, but my main point here is this. You got to have somebody that’s really confident working for you. You want a killer. You want somebody that’s really confident that they believe that they’re the best at what they do because who wants to work with somebody who’s not, especially in your field?

90% Closing Rate

Phil Singleton:   One statistic I want to bring in here I think that really, really brings this home, and that is, I think I picked this up on your website or some other industry thing I was reading here recently, is I think the industry average for a sell side business broker engagement is somewhere around 11, 10 to 25% closure rate, and yours is up around 90%. Well, I don’t think you get into that level without being an absolute killer.

Chad Peterson:    Yeah. There’s a few reasons for that. I do close 90% of what I bring on. There’s a little catch there. I don’t bring people on … I have criteria to bring people on. Just because you have a business, it doesn’t mean that I’m going to bring you on as a client. You have to have something that I know that I can sell, something that I can match up a buyer with. I would say as far as my competence level and what I know and how I go about it, I am head and shoulders above the competition. I’m relentless. I don’t give up. I make sure that the business gets sold, but more than that, I do it with integrity.

Chad Peterson:   I do it to make sure that the banks don’t have a loss, that the buyer doesn’t put his family’s life on the line with these banks, with the SBA loans and everything else to have their houses repossessed, things like that. I make sure that never happens. In all the deals that I have ever done, I’ve never had a single failure. That means that I could call any buyer out of all the businesses that I’ve sold, and all it is say hi, check in and just have a good conversation. I’ve not had one loan go bad. Not only do I close 90% of what I bring on, I make sure it’s a good fit. Yes, absolutely.

Chad Peterson:   It goes back to your previous question though, comparing me to other brokers. I got to tell you, folks, whoever is listening. Most brokers will bring on any business because there’s no downside. It’s all upside. If they bring you on to sell your business, they don’t have any skin in the game. They’ll say, “Yeah, sure, we’ll try to get it sold.” Next thing you know, your competitors know that you’re selling. They’re sending out mass emails. Everybody knows that you’re selling, and that’s an improper way to go about it. I don’t do that. I make sure that whenever I go to sell a business, I use more of a rifle approach rather than a shotgun blast approach. I work with individual buyers and individual sellers and non-disclosures and discretion is always held to the highest degree because I want to make sure that nobody knows those businesses are for sale, and the competitors don’t know that you’re selling.

Chad Peterson:   That’s what really separates me. It’s tenacity. It’s integrity. It’s also my approach. Just not letting everybody know that it’s for sale. Like I said, I’m head and shoulders above my competition.

Dealing With Business Seller’s Emotions

Phil Singleton:    Well, let’s segue into something else because you touched on a couple of things that I think of as a business owner who will eventually sell my business someday, and that is my business is my life’s work. It’s my masterpiece. If I’m going to sell it, I want to sell it to the right person or somebody that’s not going to maybe pick it apart. Maybe some people don’t feel that way. Maybe they do. I’m thinking about how I think about my own business. I’m going to probably be a little bit emotional about selling it, and I probably would need some guidance. Is that unique? Is that me? Do you feel other people have that same feeling about their business? They’ve lost their passion or they’re just trying to get rid of it like an unwanted stepchild. How does that work?

Chad Peterson:    As direct as I am and as forceful as I can sound, I’ve got a whole lot of bedside manner, so to speak, when it comes to working with business owners because, to agree with what you’ve said, this is not just selling your business. This is like putting your kid up for adoption. It’s something that’s taken more time, more money, more investment, more emotional investment, financial investment, risk. It really has been everything to a business owner. It’s their dream. It’s their vision and everything. Now that they’re not as passionate about it, they decide to sell, well, it’s like their baby.

Phil Singleton:   It’s still important to them, right?

Chad Peterson:   It’s like an adoption. You want to find the right buyer for it. A lot of my job is navigating that seller to let go of his or her business because to your point, it’s what you built. It’s like your baby. I do have a lot of bedside manner to get people over the emotional humps to get them to the ultimate goal, which is to sell when they’re doing well and to get them into something else that’s more suitable to their current passions.

No One Ever Really Retires

Phil Singleton:  What percentage do you think of the people that you work with actually move on to another business versus some that “maybe try to retire” for a couple of months until they pull their hair out or is it pretty much all of them?

Chad Peterson:   I’ve never had anybody retire. It was about two years ago. I sold a drug and DNA testing company down in Texas. He intended on retiring, and I really believed he was going to retire. He was in his late 60s. He sold the business and less than a year later, he called me back and said, “Chad, what else do you have on board?” The one that I was betting on retiring, he didn’t retire. He called me back and wanted to get started. The gentleman that bought his company paid cash for it, and it was a lot of money, and paid cash for it, and he was 73 or 74 years old. I just don’t see people retiring. If anybody knows, it’s me because I’m at the forefront of selling businesses, that people actually don’t retire. They don’t. They got to stay busy.

Phil Singleton:   Awesome. Let’s get into some nitty gritty questions about how this stuff is actually done. You mentioned about buying and selling businesses. I’ve talked to you in the past earlier about, hey, I’ve got some interests myself. When somebody wants to, like a small business owner or a business owner or anybody else wants to buy a business, what are the ways that they actually end up buying one from somebody who is selling? Is it their owner financed a lot when people are selling? Are people buying them for cash? Are there loans involved? How is it you break out from … I know it’s probably a whole mix of everything, but I’m just curious what the typical percentages are that way?

Chad Peterson:   Well, a cash buyer is like Bigfoot. I’m sure it exists, but they’re seldom seen. Out of all the deals that I’ve done, I’ve done two cash deals. I can’t tell you what the percentage would be, but it’s definitely less than 1%. You can’t bet on a cash deal. Number one, money is too cheap. You can go to the bank right now and borrow money. Number two, people just don’t have that kind of cash lying around. If you go to buy a business for $1 million, you’re not going to write a check for that. You’re going to go to the bank. You’re going to get a note on it, and you’re going to pay the debt service because the company is going to be generating enough cash that it pays the debt service.

Chad Peterson:  As far as seller financing or owner financed, there is always a component of that, but it’s usually only 10% maximum 20% of the purchase price.

Phil Singleton:  Why is that? Are there people that just want to be out or that’s just a common way to keep people involved? Why is that?

Chad Peterson:   Well, there are a couple of reasons. There are different vantage points. I could give you three reasons from different vantage points, but the main reason that the banks like them is because the bank knows that the seller isn’t going to walk off into the sunset. Let’s just say the bank wrote $1 million check. The bank wants to know that the seller just isn’t going to walk off in the sunset and not train the buyer properly.

Phil Singleton:   Got you.

Chad Peterson:    The bank is always going to ask for a 10% seller carry. Let’s just say it’s $1 million business. The seller still owed $100,000 so the bank feels pretty confident knowing that the seller has to ensure the buyer’s success and give the buyer a good transition. That’s why the banks like them.

Phil Singleton:   Are they expected to exit out of the 10% over time or are they expected to just hang onto it?

Chad Peterson:   No. The 10% seller carry is usually on a one-year standby. The seller wouldn’t get paid for the first year, sometimes two. It’s usually put on a 24 to 36-month note after that. Let’s just say you’re a seller and you carry $100,000. You should expect to get your payment back in 36 to 60 months with 7% or 8% annual percentage rate with this type of that note.

Phil Singleton:    Most people are going out and putting some money down, 10, 20%. Is that right? What does it look like?

Chad Peterson:   Yeah. Typically as a buyer, you’re going to come in and put 10% down, and then the seller will carry maybe 5%, maybe 10%, and then the bank is willing to go in on the 85 or the 80% at that point.

Phil Singleton:    Is it any bank?

Chad Peterson:   No, it’s definitely not any bank. These banks’ climates change all the time. Banks that I was really doing a lot of business with last year, their climate has changed now. It comes and it goes. A good broker like myself, an expert business broker should know where to go to get these loans. Like I said, right now, I’m in the middle of it right now. There’s a local bank that has done countless deals for me. The last one that I sent to them, I barely got done and I just thought it was that deal alone. Now I’m in the middle of this one. Actually, I’m almost done with it, but they’ve gotten so tight that part of my job is that I’ve got to go find the banks that are hungry and have an appetite for loans. Otherwise, it wastes everybody’s time.

Chad Peterson:   No, not every bank, Phil. A good business broker is going to know where to go to place these loans. That’s again what separates.

Phil Singleton:    What does the business owner look like? How long is it … What are the length of the terms usually?

Chad Peterson:   A business loan is usually 10 years, unless there’s real estate involved. If there’s real estate involved, there are some things to consider there. As a general rule, you’re looking at 18 to 20 years on a term if there’s real estate involved. If there’s not real estate involved, you’re pretty much looking at a 10-year term.

Phil Singleton:   Is there a range of percentage rates on what the business loan would go? Is it-

Chad Peterson:  It’s usually 2.5% plus prime. Right now, I think that’s right at 8%, somewhere in there.

Phil Singleton:   Is it possible to pay them off earlier? Are there all sorts of things like that or you can’t do that?

Chad Peterson:   Yeah, you can pay it off early. Yeah, you can.

How Much is Your Company Worth?

Phil Singleton:   Awesome. That’s really, really good info. Tell us a little bit about some of the type. Obviously, confidentiality, you can’t get into the exact names, but I’m really interested. There’s a lot of people that are listening to this podcast right now that are business owners. A lot of them are probably going to be agency owners. Some of them just traditional maybe home services or main street small business owners. If you’re ball-parking something, what is my business worth, I guess, so to speak? I know there’s a lot of factors into it, but if somebody is trying to ballpark something like, okay, I’ve got a digital agency. Can you give us some insight about is it worth anything? How much is it worth? What will be good to be start thinking about?

Chad Peterson:   Well, it’s an interesting question, and I want to preface this with this is a ballpark, and this is a general rule of thumb. All you listeners out there, your business is roughly worth three times cash flow, or another word to use is seller’s discretionary earnings. What is cash flow or what is seller’s discretionary earnings? Cash flow or seller’s discretionary earnings is the bottom line. It’s your salary, plus the company profit, plus your cellphone usage, meals, entertainment, travel, 401(k) contributions, IRAs, key man life insurance, automobile payments, automobile maintenance, fuel that you put in your car for personal use, personal expenditures on credit cards, things of that nature.

Chad Peterson:  What we do is we go through the tax returns and then what we do is we add any add backs. It’s called recasting the cash flow or recasting the tax returns. We go to what those business owners can write off in accordance to IRS tax code, and we add that back in as an owner benefit. Let’s just say that I came up with $200,000 in seller’s discretionary earnings, which could be $150,000 of that could be salary and company earnings.

Phil Singleton:  Is this pre-tax or post-tax?  Is that before or after tax?

Chad Peterson:  Well,  the personal income tax for a seller is added back in, but the bottom dollar is cash flow. We use that number. Let’s just say you’re living a $200,000 lifestyle out of your business. As a general rule of thumb, your business would be worth 3X. That puts us to $600,000. If your company is earning between you and the company and all owner benefits comes to 200 grand, your business will be worth $600,000 as a general rule of thumb. It changes. That multiple can go up. It can go from three up. It can also go down as well. If you’re on a business that is not highly marketable, if you’re in a business that has a lot of problems with keeping employees, that multiple can go down to say 2.75 or 2.5.

Phil Singleton:   There are all sorts of variables. It’s a total ballpark.

Chad Peterson:   Yeah, there are all sorts of variables. Guess what? If you’re in a business that you can run from a laptop and there’s freedom involved and you get away from corporate America and being chained to your cubicle, you can get as high as 5X depending on earnings. Anytime that you get above $500,000 in cash flow, your multiplier will go up.

Phil Singleton:   Wow.

Chad Peterson:   There are all sorts of little things, but as a general rule, 3X is what I tell people, depending on how sexy your business is, depending on how much that multiplier can be raised or lowered.

Phil Singleton:   Some might have recurring income that’s coming in. That’s got to be more attractive than people that are just getting fixed businesses, I guess. I would think so. That would probably add and things like that. I’m still a little bit confused. Sorry if I’m being dense on this, but let’s say somebody earned $300,000 as a business owner and paid $100,000 in taxes and took home and lived off 200,000. I’m still confused. 3X of what? Is it 300 or 200?

Chad Peterson:   The federal taxes would be an add-back. It’s hard to answer that question, but they’re not going to pay $100,000 in taxes. How do I answer that? Basically, we take the top line revenue minus your cost of goods sold and then add back … I’m sorry. Take off all your operating expenditures, and then add back the owner salary, and then add back the federal taxes, payroll taxes for the owner. If there’s any rent regarding real estate, we add that back in as well, any disparity. If you’re making $2,000 a month off your rent, that would be a $24,000 add back. We add back anything that the company is paying for that is personal benefit like automobile, 401(k), all that.

Chad Peterson:   The cash flow, to answer your question, is based off of the top line revenue minus expenses and then adding back everything that’s a lifestyle. The individual taxes that that person paid income tax, that’s a separate issue. It’s based off the corporation and then whatever the income tax, the federal income tax of the principal owner would be added back to that. It would be an apples to apples comparison. Yes.

Phil Singleton:    That’s awesome. Again, as a general rule of thumb, somebody is thinking, well, we’re talking about dental, lawyer, home services agency, anybody.

Chad Peterson:   Yeah. I’ve sold digital agencies. I’ve sold countless service companies, service-related companies, home service companies. I’ve sold a law firm. I’ve sold an accounting firm. I’ve sold manufacturers, distributors, suppliers, parts manufacturers, restaurants, hotels, foundation companies, roofing companies, any type of service-related business.

Phil Singleton:   There’s just no end.

Chad Peterson:   There’s no end. Yeah, no end.

Phil Singleton:    Talk a little bit about, bringing home with this and wrap up with this. Of course, a lot of our listeners are going to be agency owners. Like I said, there are some small businesses, a lot of business owners out there too. Just from your perspective, how do you see marketing playing a role in the companies that … particularly if somebody is going to buy a business or even selling it. Does it help to have a business that has good lead generation in place, has a good online reputation, maybe has been working on their reviews? Does that factor in at all? I could see as a potential buyer, geez, if somebody has been in business for 20 years and has 105 star reviews online and I can see that they’re getting a lot of leads coming from all sorts of different areas, that would be more attractive to me than maybe coming into one source. I think everybody has got a different angle.

Does Marketing & Reputation Help Sellers?

Phil Singleton:   Maybe some people are just looking at, what does the financials tell us type of thing and just make a calculation based off how much money it’s running. Talk a little bit about that. The marketers out there, of course, are going to want to hear that marketing helps, but maybe it doesn’t. Tell us how it goes.

Chad Peterson:   Yeah. It’s a strange deal where I can’t ever place my finger on what makes somebody buy a business. Everybody has their own passions and desires and interests. Sometimes I look at a business, and to me, I’m just like, what the hell? Why would anybody want this? There’s a market out there for it, and there’s somebody who is passionate about that. I remember selling a circuit board company, and I thought, who in the hell would want to buy a circuit board company? To my surprise, people … I had geeks coming out of the woodwork. It was unbelievable. What somebody wants to buy is … I just quit even looking at it anymore. I don’t even make my own judgment on it anymore. If it’s making money and somebody wants to sell, there’s usually somebody else out there that would like to have it.

Chad Peterson:   As far as the marketing, I find that everybody I speak to has a marketing problem. Literally everybody that I speak to. Everybody should be spending 10% of their gross revenue on marketing, and almost nobody that I see does it. Yes, marketing … People that have a real strong marketing budget, 10% of what they bring in grows. They’re the ones that are winning, always. A big thing today that people don’t really pay attention to is reputation management. It used to be … and I don’t mean not too long ago. Even just six or seven years ago, it used to be, well, are you a member of the BBB? I’m not saying that the Better Business Bureau has no relevance. It just doesn’t have much relevance. 15 years ago, it used to be let me look you up in the Yellow Pages. I’m not trying to say to the Yellow Pages doesn’t have any relevancy, but not very much anymore.

Chad Peterson:   It’s reputation management between Google and Yelp. These are things that people really need to be paying attention to. As long as business owners are focusing on the reputation and doing business right, and people are going online to report that they’re doing it right, I think that’s a big thing. I think if you can get your customers to go online, and hopefully you don’t have to ask them because they’re just great people and they want to go online and give you a good review, but more often than not, you have to ask them to go on there. I think that’s one of the crucial key components of selling your business, to have a really good reputation out there.

Chad Peterson:   If somebody is thinking about selling their business, I usually tell them they’re at least a year or two late to actually engaging in the process. They should be having a reputation tip top. They should have a great reputation online, any cleanup … I’ve seen people go and get reviews removed by just taking care of the customer. If it’s a service company, let’s just say it’s a hardwood floor company for instance, and a message got dropped, somebody didn’t go out there to fix it, whatever. Because people are 12 times more likely to go online and slander you than they are to give you a good review. If somebody slanders you online, whether you did something right or wrong, you have to call that customer and see if you can take care of them in some way and kindly ask them to remove the review because it is everything.

Chad Peterson:   To answer your question, yes, reputation management, making sure you have a good reputation online is everything anymore. It really is.

Phil Singleton:    Actually in your business, it’s probably just going to get bigger and bigger because look, you’re going to sell a business. It’s not just to sell a business, they’re going to sell it to a buyer, and the buyer is just a buyer, a bigger buyer. They’re going to do their homework and due diligence. A lot of it is going to be done online. I can assume that they’re going to look up-

Chad Peterson:   I think frankly … Well, here, there are two ways to look at it, Phil. You can go buy a company that’s already ranking on Google. If you search organically and, boom, they pop up and they’re number one or number two, man, that’s attractive. It really is.

Chad Peterson:   There’s also another way to look at it too though. Let’s just say you run an organic search for that industry in your town and let’s say they don’t pop up. Let’s just say they’re popping up on page number two. Well, that’s also good because that shows that there’s room for more growth. There’s room opportunity.

Phil Singleton:    Well, you just got me fired up here. You got me fired up. A lot of the people that you’re talking about aren’t even spending the 5% or 10% they should be to be the market leader even maybe. Well, look, if you can come in as a buyer and all of a sudden just get a real marketing and marketing partner or a marketing plan in place on your own and willing to buy the company, invest what it can be to reach its potential. You could literally take somebody that’s built a business probably the hard way on the old, making the personal connections, word of mouth, all that kind of stuff without spending a whole bunch on marketing. You go in there and fuel it with a real professional marketing plan. It won’t take you too long to take that million or $2 million business you took to maybe to 5 million pretty quickly.

Chad Peterson:    Exactly. Yeah. As I read in your book, SEO for Growth, the best place to hide a dead body is on page number two on Google. Sometimes those are good businesses to buy because they’re not doing the marketing and they still have a book of business. Let’s just say you can go buy a business that’s making a half million dollars a year. By the way, I think it’s important for your listeners to understand this because we’re throwing all these numbers out there. Let’s drill down on this real quick so your viewers or your listeners understand.

Chad Peterson:   Let’s just say you bought … Remember 3X, three times cash flow. If they’re going to buy a $600,000 business, theoretically that should pay them $200,000 in earnings annually. Here’s the good news. If you want to go buy a $600,000 business, it only takes you as a buyer 10% of that, $60,000 to go buy that $200,000 a year job, so to speak. If you can find one that doesn’t have a good strong marketing budget in it that has room for growth, I call it selling the deficiencies. Find one that’s deficient in marketing and just break it wide open because if you come to it with passion and marketing, you can do 10 times more than what the current owner is because the current owner is burnout and bored.

Chad Peterson:   That’s really what I do. I take people that are burnt out and bored and replace them with somebody who’s passionate. Almost every time, I see the numbers go up. As long as they’re willing to spend the money to put the marketing in and they’re passionate about it, I see the numbers skyrocket.

Phil Singleton:  Huge. Well, we’re going to wrap it up on that. Chad, this has just been so awesome. Tell our listeners where you hang out online in terms of where they can follow you, your website address, and how they can get in touch with you.

Chad Peterson:   Yeah. I’m really easy to get in touch with. No matter what I’m doing and where I’m at, this cellphone is like a shot collar and I’m not hard to reach. If you just go to www.petersonacquisitions.com, fill out the contact page. Like I said, I love the work. I’m responsive. I tell people I work nine days a week and they say, wait a minute, there’s only seven. I said, no, I think I work nine. I’m always working. Saturdays, Sundays, it doesn’t matter. I’m always responsive. Go to petersonacquisitions.com. Contact me and let’s start talking.

Phil Singleton:  That’s so awesome. I recommend everybody to go check out your website. Whether or not you’re ready to sell your business right now, if you want to learn on what steps to maybe learn a little bit more about how to prep your business for sale and just get some more great information about the business broker in this whole process, please visit his website because I’ve already learned a ton. Chad, thanks again. This has been so awesome and hope to have you on again at some point.

Chad Peterson:   Hey, thank you, Phil.

 

About John Jonas Founder of OnlineJobs.ph

John has been making a 6-7 figure income online since 2004.

He has helped thousands of entrepreneurs succeed by teaching them how to replace themselves through outsourcing.

He created OnlineJobs.ph, the largest marketplace to find Filipino workers. He also teaches his system for how to find great Filipino workers for free.

While making a full-time living he rarely works full time. His team of 27 full-time Filipino virtual assistants do the work in his businesses, while he manages the process. They range from programmers, designers, and webmasters, to writers, researchers, a project manager, and just general VA’s.

John has made millions of dollars online directly from work that his Filipino workers have done for him and now teaches others exactly how to do the same thing.

If you’ve tried outsourcing before, but haven’t heard what John has to teach about it, give it another try. John’s teachings are SURE to change the way you look at running your business, outsourcing, and the success you have in doing it.

 

Where to follow John Jonas

OnlineJobs.ph

 

Meet John Jonas

Phil Singleton: Hello, everybody and welcome to another episode of The Local Business Leaders podcast. I am your host, Phil Singleton. Today, our featured guest is John Jonas. John is the Founder of onlinejobs.ph, which is an online marketplace for finding talented virtual assistants and more in the Philippines. Hey, John, welcome to the show.

John Jonas: Hey, thanks for having me.

Phil Singleton: Before we get into what I’m excited about and we kind of talked about in the green room before recording here, I’d like to just get a little bit of background about what got you into this. Tell us kind of your first steps out of graduating school and what got you in the business world and kind of what led you here today.

John Jonas: I’m a terrible employee.

Phil Singleton: I already like this story.

John Jonas: I graduated from college in 2003, I think 2003, and I had a job for eight months out of college and my only goal during that job was to quit because I just found the incentive system doesn’t work with me with being an employee. I do good work, I get paid, I do bad work, I get paid. It’s the same thing, it doesn’t really matter. My only goal was to quit. It took me eight months to figure out how to make some money online and I quit. That was fine. I was making a little bit of money and I had some contract work. I was making a little bit of money online but I could see, there’s something here that I can do.

John Jonas: For the next couple years I kind of struggled through stuff. Maybe the next year I struggled through stuff. I was working on my own. I was doing everything. I was working 60 hours a week and I tried hiring other people to do some stuff for me and just kind of leading into what we’re going to talk about today, I had a conversation with someone who, this guy owns backcountry.com. Huge, huge, even in 2004 or 2005 when this was happening it was huge.

John Jonas: He said, “You know John, when you really start outsourcing some of this stuff, make sure you go to the Philippines with it.” I was like, huh, that’s interesting.

Phil Singleton: Were they even on the radar for you at that time?

John Jonas: Not even close. Why would you even think to go to a specific country? Everybody goes to India with outsourcing. That just is what it is. He was like, “Yeah because in India when you tell them something and they say yes, that means yes I heard something come out of your mouth. It doesn’t mean yes I understood what you said.” And I was like, dang, that’s super different.

John Jonas: But what it really did was it kind of gave little bit of hope that the four different times that I had tried to outsource stuff either to local people or to contract workers or to India, it just hadn’t worked out and what it did is it gave me some hope that I might find a different experience. He gave me a reference where I could hire someone full-time and I hired them full-time and that, it took me a couple months before I actually did it because I debated, I didn’t know if I could afford to hire someone full-time. This was the beginning of my business. I didn’t know if they could good work, I didn’t know if I could keep them busy full-time. I ended up taking the leap and that really changed the future of my business across the board.

Phil Singleton: That one hire basically was a success.

John Jonas: Oh dude, that was the single most liberating experience of my life where I was working 60 hours a week and I was doing everything. I was doing the accounting and I was doing the content writing and I was doing the webmaster stuff and I was doing the programming and I was doing the marketing and I was doing the crap that I hated. I hate writing content. But I was doing it because I knew it had to be done but I just hated my life when I had to do it. I hired this guy and I had him starting writing content, which I tried doing that before on it was oDesk at the time. Now it’s Upwwork.

John Jonas: I tried doing that before and it was just a failure because what I found was, and this is kind of the difference between what I stumbled into and what I was trying to do and what most people try and do. I hired this guy to write this content for me and he was a content writer and he wrote the content. And fine. Then he sent me the 50 articles that he had written and I had to go through them and check every one of them because he doesn’t work for me so his only goal was to get paid. I checked them and the first few are really great and then they get worse and they start getting plagiarized.

John Jonas: Then, I had to go back to him and be like, no dude you plagiarized these fix them. Fixism fine. Then I’m done with that process and that’s when it really hit me.

Phil Singleton: You were done when you realized they were plagiarized and then it was just like, how can I get out of this with the least amount of damage?

John Jonas: Well yeah, totally but that’s not the worst of it for me. For me, the worst of it was, I had gone through this whole process to get these articles written and now I had them written and that dude was done. He’s a writer. And he’s a contract worker, that’s what he does. He writes and he gives you your crap and now it’s up to you to do the rest of the work. That was to me the biggest issue was I have all these articles and now I have to go and add links to them and better titles and good resources boxes and submit them and link them together and all this crap. I have to go do all this. I just left myself with 50 hours of work to do from these 50 articles that was supposed to take a burden away from me. Now it just added a burden to me.

John Jonas: That was the first thing I had. I hired this dude, his full-time job was to do anything I asked him to do and that was the first thing I did was I taught him how to do this process. And that was why it was so liberating to me because I could have him write the article then I could have him do the rest of the process. I hated that whole thing and I never had to think about it again, once I taught him how to do it which took a couple weeks.

Phil Singleton: That’s a big part of it. I’d like to talk about that later. I think having a process set up and a step by step thing is something you got to kind of invest in to probably make it work. I’m guessing because I’m going through it right as we’re talking about. You kind of just brushed over it but I do think that’s a big part of probably the whole being successful is knowing that you’re going to hire somebody for and giving them direction, right?

John Jonas: Yes, absolutely. Here’s kind of what I stumbled into, a lot of people, Michael Gerber and the EMR, the E-Myth Revisited, he talks about you have to have these standard operating procedures before you hire someone. You have to do this. Dude, I suck at that.

Phil Singleton: You got to hire somebody, I know, I feel the same way right now. It’s like, I got to hire somebody to help document my procedures.

John Jonas: Creating procedures is hard. It sucks and it’s a burden and I don’t want to do it. When I hired this guy, this was this magical liberating experience for me. I had no idea at the time what I was getting into. I hired this guy and I started teaching him and I taught him to do his stuff and one of Michael Gerber’s biggest things, which is even worse today than it was when he wrote it which I don’t know, he wrote the book 20 or 25 years ago, something like that, is that people just leave today. People don’t stick with jobs at all for any reason except in the Philippines which is this super weird interesting characteristic of the Philippines where they’re super loyal and so that dude who I first hired, still works for me today. It’s 15 years.

Phil Singleton: That’s awesome.

John Jonas: I taught him that one thing and I never had to deal with that thing again. He’s taught other people how to do it since then. And then I’ve taught him other stuff and I taught him other stuff. For me, one of the biggest deals was, I don’t have to create these standard operating procedures that I can pass off when someone quits because people don’t quit. If you treat them well. That’s not to say that you shouldn’t create standard operating procedures because you should. I’m just crappy at it. It sucks. What I found was I can kind of train this person as we go. I can give them this training and I can …

Phil Singleton: Document his training while you’re training.

John Jonas: Yeah.

Phil Singleton: Exactly.

John Jonas: Yeah, and then he can do it and he can mess up with it and then I can correct it and he can do it and mess up and I can correct it and it’ll take us two, three weeks, whatever. And then we get it right and I’m done man, I’m out. That’s the end of this.

Phil Singleton: That’s awesome. The fact when you said 15 years ago, what were you doing at that time where you’re trying to build a business? It wasn’t onlinejobs.ph, was it a website? Something else that you were?

John Jonas: I was doing tons of affiliate marketing.

Phil Singleton: Okay cool.

John Jonas: I had built tons of websites and we were marketing those websites.

Phil Singleton: Got you.

John Jonas: It was super effective once I had people to do the work for me.

Phil Singleton: Awesome. Awesome. And so when did onlinejobs.ph become a real thing? How long has it been around? Tell us about it.

John Jonas: I was part of a mastermind group when all this was going down. In that mastermind group, there was nine of us in the beginning and then we kept adding people, got up to 15 people in this mastermind group, which, just for future reference, 15 people in a mastermind’s too many. We had phone calls every week and after I had had this person working for me for a year, I just found the group was asking me every single week to talk about it. Every week I was telling the same things over and over again because it was so dang good for me and everybody else wanted it. They just weren’t doing it.

John Jonas: After six weeks of this I was like, guys this is ridiculous, I can’t keep just saying these same things over and over again so I recorded myself talking for 45 minutes and I kind of put it out there on the internet and people just went crazy. I was teaching this thing and people went crazy for it and then all the guys in mastermind group starting asking me to teach to their audiences. I was like, okay, I’ll teach it to your audience, fine.

John Jonas: Couple years of teaching it and finding people sucked. It just sucked. One of the things you and I talked about in the green room was the first person i ever hired I went through Agents of Value. They’re an American company, they’re an agency. They recruit Filipino workers, bring them into their office in the Philippines, they mark up their salaries, two, three, 10 times and they lease them back to you. I was paying them $750 a month, they were paying him $250 a month.

Phil Singleton: When did that realization come? Again, we were talking about this before and we just dig right into it now. It was like, I think until just recently, that I had the epiphany, I think a lot of people look online and you got guys like me that are helping maybe virtual assistant companies or virtual assistant services, websites rank and stuff and they’re paying a lot of money so you think that’s where you need to go to get access to the workers but then at the end you start looking, wait a minute, there’s good wages X and these guys are marking it up two or three X. Dominated by middle men even now. Look this up online.

John Jonas: Which, that’s not the worst. It’s not the worst that they’re charging you $10 or $15 an hour and they’re paying them two or $3 an hour. It’s not the worst thing ever. But it just didn’t sit right with me and it certainly didn’t sit right with him when he found out. I think it took me six months to kind of put it together. I said to him, actually what I think happened was he told me, “Hey I’m quitting.” It was like, why? He was like, “I can’t handle to office politics here.” I was like, office politics? I don’t have, your my employee and we don’t have any office politics. There’s nothing of the sort. He was like, “Yeah it’s the managers here at Agents of Value and it’s the people around here. I just can’t do it.” I was like, “Well you can’t quit because you’re amazing now.” I was like, “How much are you making.” 2.50, I was like holy crap, I had no idea.

Phil Singleton: Is this the first guy that’s still with you or somebody else.

John Jonas: Yeah, this is the first dude. Still with me. I was like, I’ll double your salary but you can’t leave for 30 days because that’s part of the contract. The next day he was like, “I quit, I’m working for you today on my own.” I started paying him 500 bucks a month, I doubled his salary. I cut my costs by a third and it’s been amazing ever since.

John Jonas: But still, when I went back to find someone else it was like, this sucks. How do I find someone? Couple years later, I decided to start a marketplace because there wasn’t anything. That was onlinejobs.ph. Starting building it in 2008, we launched it in 2009, that was 10 years ago. For five years, I completely ignored it and didn’t really for five years, I didn’t touch it. It was I think it was when there was 70,000 employees or 70,000 worker resumes in it that I thought, dang, I should probably do something with this thing.
Phil Singleton: Wow.

John Jonas: Today there’s over 700,000 resumes there. That’s kind of how this came about.

Phil Singleton: Yeah, it’s amazing, full disclosure for me, this is one of the reasons we’re having this podcast. I went through it, I was pretty impressed with the whole process. My experience was actually had heard about your website from a second employee that we had that had heard and he’s in and one of them was from home services and the other guy that just recently was kind of in home buying, real estate investment type stuff. He had mentioned at the same time and I wasn’t even really half paying attention but I heard onlinejobs.ph a second time. When I heard this the second time, so I’m going to go check this out because in his mastermind or his group or whatever company he was affiliated with, the guys that were in that kind of business were all kind of talking about it. I was like okay.

Phil Singleton: I went and checked it out and I signed up and really clear what you guys do on the website. I signed up for it. I love the way you guys structured the subscription and the payment. I think it’s very fair. But I went in there so seamlessly and I went in, I paid a reasonable fee. I put very quickly, put up a resume of some of the key tasks that I was trying to look for. Within a couple days over the weekend, I got some great resumes. I found one. First of all, the people were very responsive and I thought that was great. Lots of great feedback and then I ended zeroing in on one person.

Phil Singleton: Talked to her and then what ended up really getting it for me is she gave me the reference of a previous person that she was being a VA for and this person was out of Chicago because I was still a pretty, I was like, this sounds really good, it almost sounds too good to be true to be doing this. Is this going to be one of those, it’s like you were talking at the beginning, so many people go through the heartache of hiring somebody on Upward or on Five are not realizing how much hair they got to pull out and that the money they paid that was so low actually ended up costing them a lot in redoing or editing yourself or going over or have to try it over and over again. It’s kind of deceptively expensive even though it seems like really, really cheap.

Phil Singleton: I had already been burned many, many times but I had never kind of gone this route. But anyway what did it for me is I ended up getting a reference. I got the best reference on this person that I’ve ever gotten for anybody that I’ve hired. And I’ve hired many W2s over the year for my own company and businesses and stuff like that. I was like, okay, I was thinking no matter what, if I get somebody good that’s coming in at a lower risk kind of a salary and is this good, I’ll find something for them to do if they’re really this good. Is hardworking and stuff. And it was great. Has been. It’s been seamless couple days and I still now, I’m thinking I posted for this but I might actually be using her for something different. I’m not really sure. It’s like you said, the passion’s there.

Phil Singleton: You’re talking to somebody here that she already has her own restaurant so she’s already working a full-time job basically I would think. But just the, and I lived in Asia for 10 years so I know what kind of the southeast Asian work ethic is for a lot of countries out there. It’s just different than it is here. We’re all hard working in our different ways but it’s definitely different.

Phil Singleton: I was just super impressed and I’ve had a super great experience and now my mind’s like we were talking about again, in the green room, really excited about it. The possibilities I think of just being like wow, this is just one person but I could actually have a team for what might cost me one employee here where I’m based in Kansas City. I might be able to get two, three, maybe even four, a team of people to help me do many more things. I want more versus I was thinking well if I do this gosh, if I hire one of these through these, one of these virtual assistant companies and they charge 10, 12, 15 bucks an hour, it’s a discount and I’m sure it’s there but it’s not like that. You start talking about five or $10 an hour more, you’re getting into where you can hire some entry level people with a few years experience here in the States, you know what I mean?

John Jonas: Yeah, right.

Phil Singleton: But I had no idea that it was for some of these folks, was three, four, $5 an hour and you’re getting people. And the other thing is I have to mention, the first thing I did was I had a phone call and of course just I already knew Filipinos had good English but I was just like, it almost like she grew up here with a slight accent. I was just completely blown away. The English was good as it was. Obviously I’m really fired up but I just, I wonder, did I just get lucky and you just happen to pull one out of the pack? And I was like wow, this is really great. Or is this kind of norm? I guess you can kind of tell me based on the feedback of the excitement that you’ve had, the people that have hired one and gone on to hire many. Tell our listeners a little bit about how that goes.

John Jonas: I can’t tell you how many times I’ve heard from people, man I just got really lucky. I hear this all the time. No, you didn’t get really lucky, you did a good job of recruiting and they’re really good. Not everybody has a great experience the first time. A lot of people don’t do a good job of recruiting but if you do a good job of recruiting, your chances are pretty high of getting lucky. And then you said something else, a bunch of the thing that you said are things that I hear over and over and over again. There was a light bulb that went on for you, when you recognized, I can get really good talented people. It’s two to $5 an hour. They’re thinkers. It’s not just a robot. They’re willing to work hard. It’s a different hard work than here in the US.

John Jonas: Some of the things that I’ve found culturally with the Philippines that I didn’t know about was, they’re loyal and I already talked about that. The first person I hired still works for me. If you treat them well, they’re loyal almost to a fault to where they’ll never quit. It’s not a matter of, oh they got another job offer, they’re going to jump ship. That’s not a thing in the Philippines. They’re honest to the point where my guys in the Philippines have my credit cards, they have my bank account numbers. They have access to my personal email account. Don’t go doing something you’re not comfortable with and get yourself ripped off but the only situations where I’ve seen people get ripped off in this is either they did something dumb or the tried to rip the worker off. They tried to get them to do a bunch of stuff and not get paid or not pay them.

John Jonas: They speak American English. Like you said, her English was amazing and obviously not everybody’s English is amazing but dang it’s a lot of people. And then they’re not entrepreneurial so they don’t want to steal your idea. They don’t want to take your domain. They don’t want to hijack your hosting account. They don’t want to do any of that stuff. They just want a job and if you’re willing to give them a job, you just found this really great situation of it’s hard to find a job in the Philippines. It’s especially hard to find a full-time job and you’re working from home on your own hours and you’re working for a foreign boss which in most countries is kind of a joke but in the Philippines it’s an honor which is different. It’s like a bragging point. They’ll brag about you their foreign boss to their friends.

John Jonas: You end up getting this situation where this person has a full-time job. They’re working their own hours, they’re working from home, they have a foreign boss, they’re getting paid well and they’ll go above and beyond what you ask them to do to keep their job. Not always, and again it completely depends on how you treat them, and this is especially the case in the Philippines with how you treat them makes a difference on the quality of work they’ll do but they don’t quit. That makes such a huge difference for a small business. And it makes a huge difference for the amount of effort you have to put in. The standard operating procedures, the rehiring. When you lose someone, everybody know this, the cost of losing an employee is double their annual salary or something like that because there’s so much pain involved.

Phil Singleton: Well even time wise. I’ve been spending a couple hours a day already and I’m just thinking, wow, that’s a lot. I’m the most expensive resource in my company but I feel the risk is pretty low. But point, that’s where I think people get it, the hidden cost of hiring. If you don’t like them.

John Jonas: Let me get into kind of a side thing that people don’t realize in there. People here are thinking something and it’s wrong. What most people are thinking of is oh I don’t want to take the commitment. I don’t want to make the commitment. I just want to someone out. I’ll just hire someone hourly in the Philippines and get the same thing. You won’t.

John Jonas: There’s a big difference between hourly work and full-time work and that’s on you, on your end. It’s not such a big deal on their end. It’s much more of a big deal on your end. And there’s a big difference between contract work or freelancers and hiring full-time. Let me just explain these because this makes a really big difference on your business success.

John Jonas: A contract worker or freelancer, this is someone you hired to do a project or to do a specific thing and they don’t work for you. When they’re done, you pay them and they go and do work for someone else. That’s all good and fine but it doesn’t allow you to give them things that will lessen your burden. For me, all of this is about lifestyle. I work 10 to 15 hours a week. Right now it’s summer, my kids are out of school, I’m working 10 hours a week and I’ve been at 10 to 15 hours a week for 10 years now because I get people in the Philippines to do my work for me.

John Jonas: With a contract worker you can’t do that. That person doesn’t care about your business success. You’re still going to have to spend the same amount of time hiring and recruiting and training as you would a full-time, long term person. Just because you always have to bring someone up to speed. But once you’re done with them, they go away and now when you need something done again, you have to go through the full process again. That’s kind of a contract worker, freelancer and that’s a big deal.

John Jonas: The full-time versus part time thing or the hourly versus full-time, part time, if you pay someone hourly and they’re not busy, you don’t care. They do the job that you gave them, they’re not working, it doesn’t matter to you. And that’s a really nice feeling of oh let me do what I’m comfortable with and just continue working on answering my emails because I don’t have to worry if they’re not busy. When you hire someone salaried, either part time or full-time, if they’re not busy, it’s on you. It’s your responsibility and that little change of giving yourself giving that responsibility, forces you to become the CEO. To work on your business instead of in your business.

John Jonas: That was probably the biggest thing that I didn’t realize that kind of changed my life was, this dude who I’m training, I just gave him this task to do and it took us a couple weeks to get to the point where he was getting it done faster than I thought but then he was done and I had to keep him busy. That had to take, that kind of jolted me out of oh man, I got to respond to this email. Oh I got another email I got to respond. Oh I got another. This endless cycle of garbage working in your business to I have to step away and think and give him something else to do because otherwise I’m wasting money. It’s not a lot of money but it’s still wasting money. Then I had to think of …

Phil Singleton: Then I also wonder, I’m a little bit in the spot of now where it’s on me to train. I can’t really give a full-time thing until they get up to speed and we’re both comfortable but my bigger fear to take a step back on this is, which I don’t mind right now that I might not be having full-time hours or work but I also don’t want somebody one, get in the habit of I don’t have enough work for them right now. And two, is that okay, are they going to be bored? If I’m like geez I just do some stuff, here’s some stuff to study but I can’t give you the full workload over day one so it might take a few day or couple weeks even to get the rhythm and the routine where I can start passing some stuff off.

Phil Singleton: And you mentioned a little bit of that. You had some stuff right off the bat then it was kind of like okay, you’re going to have to fill the plate up probably a little bit over time versus on day one. Especially for people that are smaller agencies or maybe a solo printer that’s just hiring their first person.

John Jonas: Yeah, but get on it. Start teaching stuff because it’s going to force you to start thinking about your business instead of thinking in your business. And that will make the biggest difference for most people of growth, success and growth. The other thing you mentioned if I don’t give this person enough stuff to do, are they going to get bored? Yes, and the result of getting bored is finding another job or taking a second job which is not a great situation. You want to keep them working for you and only for you.

Phil Singleton: That was my other fear of hiring actually was how does it work? Is it I’m going to hire somebody and I had this discussion, am I going to hire somebody and the reason it’s the pricing seems really super awesome is because they’re trying to take on three on four, quote unquote, full-time jobs. I was, well that wouldn’t really be fair either if somebody’s trying to take on. I actually was upfront about it. I was like, well what thing, what other responsibilities do you have? Would you be exclusive to me? Would you be taking on a lot of part time work and stuff like that?

Phil Singleton: That’s when it came out. Well I’ve got this restaurant during the day, doesn’t take a lot of my time. I just kind of have to be around but I can work upstairs. That was one thing. The other thing was she was really upfront, was that from time to time taking a couple little small, one or two hourly things, is that okay? I have something now to do, I don’t know if I’ll do them later. I feel like it was, but we had that discussion ahead of time. Is that common? Is that something to worry about?

John Jonas: No, that’s common, you did a great job. Just being upfront about it is a really big deal.

Phil Singleton: Is it common though? Is that a way for people to get ripped off is somebody just come on and they just basically took four full-time, they’re trying to squeeze four full-time jobs into one?

John Jonas: It definitely happens but if you can usually tell. You hire someone, you’re happy with their work, they’re doing good work and all of sudden you’ll see oh your productivity went down, what’s going on? And you need to approach them about it and say, “Hey, I can see that your productivity went down, what’s going on?”

John Jonas: I don’t use a time tracker. A lot of people do, I don’t. I don’t like it. They don’t like it but I can always just gauge like hey, I can tell that you’re not getting stuff done like you should. What’s going on? Or if that starts from the beginning, stuff’s not going on, then that’s when I know this isn’t going to work out.

Phil Singleton: And how quickly and how easy is it to get onto to, hey this isn’t working out. Do people get, they get nasty on you? Is it kind of like …

John Jonas: How easy is it?

Phil Singleton: Or just what’s the recommended way to do it in a way that saves face for everybody I guess?

John Jonas: There’s not. It sucks if you’re firing. Firing people sucks. But, they’re not going to do anything to you. If it hasn’t worked out, it hasn’t worked out. They’re not going to go try and rip you off. They’re not going to steal your crap. Unless you try and not pay them. It’s worse, the worst of it is on you. You’re letting someone go and that sucks. But they’ll go find another job.

Phil Singleton: And one of the things I wanted to dip into now is also to me, the way a lot of these services are pitched and even on yours on your website, onlinejobs.ph, it’s kind of opens up and I guess it’s kind of the common buzzwords is virtual assistants, virtual assistants from the Philippines. But really what I found, even on your own marketplace is you can hire way more than just a virtual assistant for just random tasks. There’s people like skilled website developers. There’s graphic designer. There’s all sorts of skilled people that are maybe would fall outside just what some people think of as a quote unquote virtual assistant. It can get pretty deep with some pretty solid skillsets.

John Jonas: Anything that can be done on a computer, you can hire someone in the Philippines to do it. I have 26 people, we just hired someone today to do customer support. 26 people in the Philippines full-time. I have obviously customer support people, I have graphic designers, I have web designers, I have video editor I have.

Phil Singleton: And those are all under kind of the onlinejobs.ph company?

John Jonas: Yeah.

Phil Singleton: You have actually have office space or all they all remote and somebody manages them remotely?

John Jonas: They all work from home.

Phil Singleton: That’s awesome. Wow.

John Jonas: Programmers.

Phil Singleton: That’s got to be, that’s a plus too for all of us. A corporate job can work actually out of our house.

John Jonas: Yeah, yeah, they get to work from home. You don’t have to pay for office space or utilities or insurance or any of that stuff. Plus their salary’s tax deductible. Really, depending on how much you’re making, it’s saving you one third of their salaries each month. It really is a good situation that is it’s like having a local person without the local issues.

Phil Singleton: And the other thing I was going to mention, is there a few things I’m learning, some of this is on your website too but you take the leap, you get somebody, you find somebody you like, you spend some time training them, hopefully you already have her in the process of kind of documenting some of your tasks and procedures. Just for the long term benefit of your own company, your own operation but for certain hiring somebody I think really does kind of jumpstart that. But there were some things, certain things I just recently learned about the Philippines.

Phil Singleton: There was the salary negotiations that went I think very smoothly. There was an ask to include, I guess a budget for I think she called it HMO or some type of a health kind of a stipend almost for that. Some kind of common and then also the quote unquote, 13th month which I guess was a, there’s some expectation for some of them I guess to pay a bonus that’s equal to about a month of the salary. Is that, hopefully you’re not hearing that for the first time.

John Jonas: The 13th month, if you are in the Philippines, if you’re a Filipino employer, it’s legally required that in December you pay them a bonus of one month’s pay. You pay them November’s salary on December 1st and then some time during the month of December you’re going to pay them one month’s salary.

Phil Singleton: They get doubled up in December.

John Jonas: They get doubled up in December, yeah. It’s not legally required for you because you’re not a Filipino business but it’s something you definitely should pay. And, you’re hiring someone like July 1st, that’s halfway through the year, you should prorate the 13th month so in December you’ll pay them half of one month’s salary.

Phil Singleton: Right, that’s kind of what we talked about. I actually, I didn’t know any better but I just said, “Would that be okay?” And she was cool with it.

John Jonas: Yeah, that’s correct. The HMO, the health insurance is a totally won on a case by case basis. A lot of people will ask for SSS and Phil Health. SSS is their social security. Phil Health is their national health insurance thing. But it’s not really health insurance it’s just kind of a discount thing. It’s kind of silly but it’s also 10 or $20 a month. It’s pretty cheap so it’s worth saying, “Okay, I’m going to pay you this much and here’s your, I’m going to add to that this.”

Phil Singleton: To cover those things.

John Jonas: To cover these things, whatever.

Phil Singleton: I thought that sounded reasonable. It wasn’t like I didn’t know it was going to come. It was like, 10 or 20 bucks. It wasn’t like another $200 a month or something. But that’s what it is here in the States, man. You hire some W2 and put get the insurance going.

John Jonas: Right, you get all that extra stuff here. You don’t get that there. We recently did health insurance after 15 years, we finally added full on health insurance to people and it was an extra $100 a month per person but we had to do a lot of work to get that done. It’s something that I guess we could talk about it on the website.

Phil Singleton: At some point. Look man, this has been super awesome and like I said, I was so excited about that I literally reached out to you and said, “Gosh, I’d love to do a podcast on this because we do, half of our listeners are agency owners. Other half are basically small, larger maybe small businesses and stuff like that.” I think honestly, with the way things are digital, especially in the marketing space, so many, a lot of agency’s owners already need help all over the place. They’re already looking for any kind of assistance they can get to kind of help them scale so they can grow their own business without having to hire too many W2 employees or what have you.

Phil Singleton: And then you got actually a lot of small business owners that could use, they can’t really afford to have a full-time social media or marketing person just to maintain some type of a presence on social media or anything really. It’s either all or nothing. They hire an agency like mine, helps them do everything, gives them a presence like they have somebody in house. But this is a huge opportunity for small businesses, if they can take the leap and train people and trust them to do stuff because it’s, I can see anybody considering this, there’s just no, you don’t just hire somebody and then just press a button and it works. There’s definitely the one thing I think I probably didn’t anticipate was but now I understand, is you just definitely have to take time to train people and tell them what you want them to do.

Phil Singleton: You just think some of the people are going to know coming in the door, know exactly what. It’s not. It’s the same way you hire somebody locally. You have to go through a lot to get them up to speed.

John Jonas: Yeah, for sure.

Phil Singleton: It doesn’t change anywhere.

John Jonas: My advice to people is when you’re getting started, hire someone to do something you currently are doing. Get something off of your plate and yeah, it’s going to add. You’re working 50 hours a week, you’re going to work 55 or 60 the first few weeks. It just is what it is, you have to spend more time.

Phil Singleton: I’m spending a couple, probably two hours, I getting up 6:00, 7:00 in the morning and spending two hours, three hours even. I think I even spent four hours literally just trying to go through every employee.

John Jonas: But then after that, you’re going to work 45 hours a week. You’re going to get time back into your life. If you hire someone to do something you’re currently doing. And then after that you work less and then you have this understanding, this full new world exists for you that you can hire someone else to do.

Phil Singleton: Well then you mentioned something else John, was like how what I’m really hoping is if I have as much faith in this person I have, if she can really understand different parts of the business and get one or two of these things down, can she help me train somebody else?

John Jonas: Yeah.

Phil Singleton: So I don’t have to do it?

John Jonas: For sure.

Phil Singleton: Which is why I really want to put my time and effort into one person that can help me document stuff, understand, they go through all the processes then she can spend 20 hours a week for a couple weeks training somebody. It would totally help. Then that really starts to scale for you.

John Jonas: Yeah. Let me just, let me tell you really quickly how I train people. And I will train two, three, four people at a time on a single thing. For example, we’ll create a process in the backend of Online Jobs where we need to have this monitored. The way I do that is I use Snag It. Have you used Snag It?

Phil Singleton: Yeah, screen capture.

John Jonas: Yeah, screen capture. It’s creating a video of my screen. It’s recording my voice and my mouse and my screen and I’ll just talk through the entire process and whether it takes me one minute or five minutes or an hour, I’ll just talk through it. And then I’ll send it to all of them and say, “I want you all to learn this,” even though only one of them is going to do it. You’re all going to learn this because the more they know, the better off they’re going to be at whatever else they’re doing. And then they’ll come back to me with questions and I’ll just do it again. I’ll spend five.

Phil Singleton: That’s like us as business owners. You know pretty much everything that you’re doing. The process, you’ve gone through it before. You know how to change stuff on your website. You know how to add a blog post, whatever, all that stuff.

John Jonas: Yeah. You want to modify WordPress, fine, talk someone through it. Here’s how we do this. Or you have your Shopify store or whatever, hey, here’s how I do this thing in Shopify. Whatever it is. Open up Snag It, start talking your way through it. It’s so much easier than writing an email and trying to describe every little thing. Or when you are writing an email, take a screenshot and draw an arrow on it so people know exactly what it is.

Phil Singleton: Love it.

John Jonas: It’s so much easier to do that. I do that.

Phil Singleton: I actually use, I use one called Loom, you got Loom US, it’s the same thing sounds like. You go in, do a browser plugin and just screen capture stuff.

John Jonas: Yeah, I do it probably 10 times a day. And that’s how I communicate with people. And everything goes into a project management system for me.

Phil Singleton: So sweet. Last but not least, I always like to ask people that have successful growing online businesses, what kind of things are you doing for marketing for yourself? Obviously you guys know something or do your own kind of SEO. You rank for certain special keywords that you’re doing so that helps. Is there any other things that you guys do for marketing. I’m sure it grows and there’s some, I got to you by a traditional offline referral. Somebody else had heard about you or was happy about it and they were like, hey, check this out and I did and here I am.

John Jonas: For us, that’s one of the biggest things that we have is we just get a lot of word of mouth. But outside of that, one of things I learned a long time ago and this was with that very first person, I do everything. We implement everything we know of, everything we hear of, I just don’t do the work. I just get other people to do the work. We’re implementing everything. I don’t really know what it is that’s working super well.

Phil Singleton: You guys are just trying it all. Last, last question is, of your team members, 26, 27 of them, what does that look on a day, what does, just give me a breakdown of the percentage wise. Are 10 of them customer service? Are they in general, a lot of them just multi-tasked, multi-talented people. You got graphic designers, what’s it look like?
John Jonas: Yeah, I think we have five programmers, I think we have four customer service people, I think we have five or six admin people, no there’s probably more than that. People that are working on data security. We do a lot of work in Online Jobs to make sure, not to make sure, to try and have a clean set of worker profiles. We get scammers. We get people from India. We get all kinds of stuff and we spend a lot of time trying to clean that up. We have a bunch of people that do a bunch of things to clean that up.

Phil Singleton: Got you.

John Jonas: I have a couple front end webmaster kind of people, HTML, CSS. I have a couple designers. I have a girl that does HR. She does recruiting. I have a couple social media people, content writer. I have a project, kind of a project manager. She kind of helps oversee a bunch of different things. What else do we have?

Phil Singleton: You’ve got one or two right hand people. I’m sure that one initial hire is one of them.

John Jonas: Yeah, he definitely is. He manages all the admin backend people. And I could ask that guy to do anything I want. He’d do it. I have a Facebook ads person. A couple of people that write content. We have a pretty widely varied team. They all work from home, they’re all in the Philippines.

Phil Singleton: Sorry, I’m going to wrap this up, I really appreciate you spending this much time with us. So much great info, I know we’re going to have a lot of people interested in this particular episode. What would be the range is usually starting from whatever, two to three, four, $5 an hour to I’m sure it can go up from there. People that have had more experience for other type things. In a general sense, what are we talking about for people with a couple years of experience out of school maybe? I think the person I hired is probably in her early, mid 20s versus maybe somebody that’s in their later 20s, has maybe different degrees. What are we looking at for those types of hires and stuff? What would be a web designer versus kind of a general just virtual just assistant, general assistant? What kind of?

John Jonas: I’ll just kind of change the paradigm here. I have no hourly people. I don’t know how much anybody makes hourly. My people are all full-time. They make between 400 and $1,600 a month and so at the upper end of that I have a really good Facebook and Google ads person or a designer who’s amazing or a couple really good programmers. In the middle end I have these, I have good content writers would be in the middle of that. Good front end people. On the lower end of that I would have probably customer support people or some admin people. At 400, she’s an admin person. Most of our people are probably between 550 and 850 a month.

Phil Singleton: And what would be a let’s say a talented graphic designer? You guys have really great stuff on your website. That’s obviously probably part came from your team, no?
John Jonas: Yeah, 1,500 bucks a month. You can hire a really good graphic designer between a 1,000 and 1,500 bucks a month.

Phil Singleton: Somebody who know what they’re doing with WordPress and stuff like that? Making a WordPress side.

John Jonas: Somebody who knows what they’re doing on WordPress between 500 and $800 a month. A video editor would be 700 to a 1,000. A good content writer would be 550 to 950.

Phil Singleton: Content, that would be a big one. That’s the one thing. Is that really even possible? Your stuff, it looks like you do have a content writer. I forget her name but there’s some really good posts you have on your website.

John Jonas: Yeah, stuff on the onlinejobs.ph.

Phil Singleton: That’s all from your team from the Philippines, right?

John Jonas: That’s our team, yeah. A lot of it’s well, they started posting it is as them but a lot of it was posted as me and I don’t know that I wrote anything.

Phil Singleton: Right.

John Jonas: They wrote it, yeah.

Phil Singleton: But content writer, around a $1,000 a month.

John Jonas: Yeah, you could, I would be less than that, yeah.

Phil Singleton: For a good something that would, even if I have to edit.

John Jonas: It just depends on how you recruit. You do a good job recruiting, it’ll be 700 bucks.

Phil Singleton: Are you looking for somebody that has, how easy is it to hire people in this kind of a system that have maybe secondary degrees or even English type stuff. Is that what you’re looking for for this kind of stuff? That’s why I’m asking so much. Is your marketplace more kind of people that are coming in in that early 20s range that are looking for experience? Or is it all over the map?

John Jonas: It’s all over the map. It’s all over the map. Here’s a couple things. In the Philippines, almost everybody you find will have a degree. That’s just across the board.

Phil Singleton: That’s a baseline.

John Jonas: That’s a baseline in the Philippines of you’ve gone to grade school, middle school, high school. If you have a high school degree in the Philippines, basically the only thing you’re qualified to do is be a nanny. It’s socially you’re kind of an outcast if you only have a high school degree. After that you have a college degree of two to four years, two to five years of college degree and basically everybody you find is either going to have a degree or they’re going to be working on a degree.

Phil Singleton: Got you.

John Jonas: That is just a matter of how much experience are you hiring for? For my, what I would recommend to people is, you’re hiring someone to do something you’re already doing. Unless it’s a technical position, unless it’s programming, design, webmaster, WordPress, whatever, unless it’s a technical position, you’re going to hire them for their English because you can teach them how to do social media. You can teach them how to write content. You can teach whatever if their English is great. Hire for their English skills and then worry about the specific skills after that.

Phil Singleton: Thank you so much for doing this John. This was so awesome. It was one of my favorite episodes. This is going to be I think a great one to kind of promote. I’m sure we’ll get a lot of downloads off of it. Tell us where we can follow you. I know the one thing we’ll have in the show notes is onlinejobs.ph. Is there any particular social media place where you connect with people more? Is it LinkedIn, Facebook, something else, let us know and we’ll make sure that we let people know how best to follow you.

John Jonas: You can follow me on Facebook. I’ll be totally honest, I hate Facebook.

Phil Singleton: Me too.

John Jonas: And if you follow me on Facebook you’re probably going to see …

Phil Singleton: A post a year, something like that, like mine.

John Jonas: No, you’ll see regular posts I think. It’s just not done by me. But if you want to get in contact with me, I’m contactable. If you use the contact desk link on onlinejobs.ph, it doesn’t come to me but if you say, “This is for John,” or you say, “I have a question for John,” I will be the second person to see it. They all know just to send it to me.

Phil Singleton: Awesome.

John Jonas: And I’ll respond.

Phil Singleton: Awesome, awesome, awesome. Well I’m definitely going to type up some notes and let people know that this is one of these things where I actually tried and I’m very, really excited about honestly. I’m like, in my mind I’m imagining a much bigger team over the next months and year so maybe but then you also kind of temper it. You want to make sure that one step at a time. Works out. I can definitely see the potential here for me but for lots of other people. Hope a lot of the people kind of check this out.

John Jonas: Sweet. Love it.

Phil Singleton: All right man.

John Jonas: Hey, thanks for having me man.

Phil Singleton: All right, have a great rest of your week and Happy Fourth of July.

John Jonas: Talk to you later.

Phil Singleton: See you.

Elaine Pofeldt is a freelance writer, editor, and ghost writer who has recently worked with publications including The Economist, Fortune, Money, Inc., CNBC, Crain’s New York Business, Forbes, and many others. Entrepreneurship, small business, and careers are her specialties. She is also the author of a new book, which we’re going to talk about today, The Million-Dollar One-Person Business.

She helps corporate, non-profit, and private clients write and edit proposals, newsletters, blogs, RFPs, reports, white papers, academic articles, and books. Elaine also helps her online editorial clients create inviting high-traffic websites, drawing on her experience on excuse me, Fsb.com to five million page views a month and the number two site in Google after the USSBA. She founded and ran a national businessman competition for fortune, small business and now advises clients on creating and improving contest on their own. She experienced appearing as a guest on TV outlets such as MSNBC and CNN.

You can connect with Elaine and learn more about her and her awesome book here:

• The Million-Dollar One-Person Business
• Elaine Pofeldt on LinkedIn
• Elaine Pofeldt on Twitter
• Elaine Pofeldt’s column on Forbes

 

Meet Elaine Pofeldt

Phil Singleton: Hi Elaine and welcome to the show.

Elaine Pofeldt: Thank you so much Phil great to be here.

Phil Singleton: Alright this is going to be really exciting because as we were talking in th green room so to speak, before we started recording, Elaine wrote one of my favorite books of last year, probably going to be of all time called The Million-Dollar One-Person Business. So as I was explaining to her when we first connected this morning, I think it’s one of the most awesome book titles that I’ve ever heard of and it’s one that’s inspired me I think the first time in my life to buy a book within seconds of actually hearing the title.

So I can’t wait to actually dig into this because as an agency owner and somebody who aspires for this kind of business model I really thought this was exciting and I love the content of the book. But before we actually dive into that I would just like to hear Elaine about your background and those first steps out of school or what have you that got you into the business role.

Elaine Pofeldt: Oh, sure Phil. Well I came into the business world by accident. I started out as a general assignment reporter after I graduated from college. I was an English major and I worked in Jersey City in Patterson, New Jersey for small newspapers covering police stories, city hall that type of thing. Then after about seven years of that I started to feel a little burned out by all the bad news. So I wanted to do something light and fun and I got a job as a fashion features editor at Women’s Wear Daily.

It couldn’t be much more different than my beat of covering the Hudson County Jail. But it was fun and it introduced me to the business world. I found that I really liked learning about the business side of the fashion businesses even more than covering a runway show. So I wound up going in that direction and I had the opportunity to go to Success Magazine which covers entrepreneurship and then I went from there to fortune small business online which is what you were referring to FSB.com and then I went over to fortune small business magazine for a while. Then they brought me back to the website to help build the traffic some more.

Elaine Pofeldt: Then 11 years ago I went freelance, so now I’ve written for a variety of business publications all in that area of entrepreneurship and careers.

Phil Singleton: Excellent. Thank you for giving us that background and it sounds like at one point whatever that was 11 or 12 years ago you went into the business side of covering stories and content and have never gone back.

Elaine Pofeldt: Oh, absolutely. Well the coverage at fortune small business was very much focused on the business side and even some of the stuff I did at Women’s Wear Daily was and Success Magazine of course was also I formed my own business 11 years ago. So I now have the understanding of what it takes to stay in business for a pretty long time and you manage cash flow and all the nitty gritty aspects of running a business that you learn on the job when you start your own business.

Phil Singleton: The one thing I’m going to ask, I want to dig into the book here really in a couple minutes. But since we already started talking about this a little bit you’ve been writing, you’ve been a journalist you’ve been a writer for some time. The Internet’s changed a lot. I’m assuming some of the things when you first got into the writing world so to speak maybe a little bit more emphasis on print publications and then maybe that shifted some. Can you talk a little bit about how that changed for you personally in the way you write and where it gets published and distributed.

Elaine Pofeldt: Oh, its changed completely Phil. You’re completely right about that. The whole journalism industry has been disrupted. It’s had good and bad changes I would say. I came up in a system that was print oriented and there was a level of rigor to journalism that I think a lot of younger journalists had not experienced. I’ll give you an example. If I wrote a story for fortune small business there might be a line editor that would edit it. A top editor of the magazine and three copy editors before it ever went out to the public and so you have a lot of great training that came with the job. Now what’s happened a lot is papers are basically gone. A lot of stuff has shifted online. But with that shift it doesn’t seem like the industry has been able to really find a good profit model. So where I think a lot of publications have gone is to go ultra lean in terms of staffing.

Elaine Pofeldt: So there are times when I’m publishing things where maybe there’s an editor somewhere in the organization who’s looking at it just to make sure there’s nothing glaring, but I don’t have any contact with that editor on a daily basis. So it’s very much you’re sort of out there winging it and you do your best. Luckily I do have very good training and I know how to do things. But that’s what’s evolved so you have to bring that quality control to your own business and do the fact checking even if they don’t ask you to do it and that sort of thing. Sometimes I have sources who laugh and say I’m the only person who ever contacts them with fact checks and I think that’s probably because there are not that many internships anymore. There are very few staff jobs anymore and there are few opportunities for young journalists who are entering the field now to really learn how to do things in that way. Fortunately there are still a lot of very experienced people doing it so they bring that training to the work.

Elaine Pofeldt: In terms of where I get published it’s definitely much more online these days. In the last year or two you’re on the cutting edge Phil of a big trend which is podcasting which has been a wonderful trend because it’s brought a lot of news waste to the whole discussion of whatever topic it is, in this case entrepreneurship. I find that a lot of the hosts of business podcasts are business people like yourself and they ask very, very smart questions. So I really enjoyed seeing that. Now on one hand maybe if a radio veteran listens to them there might be some things that they look at that they would do differently because they have a certain training. Similar to how I feel with written journalism. But from my point of view as somebody who is part of this whole dialect I’m so excited to see all of these new voices and some of them maybe would have not had the inroad to the media. It’s very much a who you know business that goes way back to your early career and it can be hard to break into. So it’s nice that people can just break in if they have something to say and they can build an audience, I love it.

Phil Singleton: Totally fascinating and as you’re talking I want to get right to the book as soon as we can but I have another question I just have to ask you because of your background and how you’ve seen this shift online and the way that you’re explaining how things have changed being published today. It also makes me think of somebody who for myself often times we’re trying to do for our clients is almost treat their websites as a marketing and a publishing platform. So some of the things that I’m doing writing my own books now, I’m publishing. I’ve got a podcast for many of the reasons you explained.

Phil Singleton: But I actually started to produce our own local magazine. So but one of the things I’ve noticed as looking at content as a publishing platform is how tricky it is for some of these online media sites or online publications where you’ve got this gray area. I don’t know what you want to call it. I’d love to hear your take on this where and I’ve seen this, I’ve been reading about it a little bit more as I get into this publishing model about native content. You had the print model before. There was so much checking, so many tiers as you were mentioning before and it was physically separate. But you know now when we publish things online you’re part of a whole system of things. There’s online ads, there’s people commenting. There’s things being advertised within editorial content. There’s people trying to get an SEO or a Google advantage and get links and stuff. So it’s so much more complex just I think in the way things are presented and distributed in the type of technology that’s embedded in new content, versus the simple way of there was literally a physical firewall on content.

Elaine Pofeldt: Oh, yeah.

Phil Singleton: In a newspaper or magazine. So can you comment on that kind of stuff because this is where it really fascinates me the things I’ve never really thought about before because I’m coming at this as an SEO person and here now I’m trying to play with my own almost media publishing platform. I’m seeing this myself and it’s really making me think, wow I can see how people struggle a little bit with the advertising model because it does get a little bit tricky.

Elaine Pofeldt: Oh, it does. Well when I see the publications doing is they’ll clearly label it. I’m talking about bigger publications they label it when it’s advertising. I write some content and what I notice is they label it. It’ll say this is our custom content and a lot of them have gotten very sophisticated about it so they won’t just publish anything like the old editorials of the past. Just aren’t done where it was a pay to play kind of thing. It’s very much when I do it I have a lot of discretion as to who to interview. There are people in the stories that did not pay anybody at the magazine. The publication for an ad that they don’t discuss that with me if an ad was purchased or not. They want me to go ahead and do the best possible story because what the advertisers are realizing is no one wants to read some hokey ad you know? They will read a good article that’s topical and related to what the advertiser is in the middle of doing. So maybe somebody might buy an ad. There still are some print publications.

Elaine Pofeldt: The way I see this done is they’ll buy a full page ad somewhere in the publication and then that supports a section on a certain topic, let’s say it was accounting and then as the writer I’ll be asked to submit story ideas about accounting, similar to being a journalist. It’s almost exactly the same. Then go out and report it. It supports the section itself but there’s nobody leaning on and you saying you have to say this.

Phil Singleton: I mean that’s great to know at least from the bigger and more popular ones and of course they’ve got the reputations and things. But you do see I mean gosh some of these ones that offer a sponsor are clearly marked. I think some of these smart advertisers that are doing it, they’re not producing the good ones anyway. Aren’t producing advert tutorial type content. It’s actually they’re getting it…if the sponsor post even it’s not written by a journalist. It’s provided and information provided by a company. It’s almost like the really good ones are truly trying to provide really good educational content that has value versus something that’s so promotional.

Elaine Pofeldt: Yeah you’re right.

Phil Singleton: Some of those look like they’re so good and then sometimes they’re so good it’s almost like wow is this editorial content or did somebody pay for that? So I pay attention to it a lot more. It’s great to get your insight.

Elaine Pofeldt: Well it’s interesting that you raise that as far as the commentary and that sort of thing. What I found is for awhile a lot of publications were so happy to get the content that they had pretty relaxed standards and then what happened I guess it was the beginning of 2018 when the Huffington Post kicked all the contributors off the site. It seemed like that touched off a wave of scrutiny where I saw a lot of the publications were cracking down on ad content basically. It wasn’t necessarily to “advertisingy” it was more just boring.
Phil Singleton: Lower quality stuff.

Elaine Pofeldt: Yeah, not true thought leadership and they really raised the bar in terms of thought leadership and I do some editorial work for people who have been trying to get published and they don’t understand why the publication won’t take it. Now I was a senior editor so I worked with some of the toughest editors in business trials so I know why the editors are taking something or not taking it. I can give them some guidance. Now some people don’t want to take that guidance. They just want to say whatever they think is interesting without regard to that feedback. But a lot of people say oh, you know what I just don’t know this field so thank you so much for that feedback and they will adapt their content to make it readable. That’s why it’s so similar to what you see on the journalism side because it has to be. They don’t want to junk up their sites with poor content.

Elaine Pofeldt: Now with smaller publications sometimes they have less sophistication. Not always there are some excellent very small publications. But. We see that very, very blurry line it’s usually going to be the smaller ones that maybe don’t have an experienced staff or don’t have the budget to bring that rigor to the whole process, similar to on the editorial side.

Phil Singleton: Interesting. That does sound like you mentioned, I mean the Huffington Post thing it seems like a lot of these larger online media sites really did look at their contributor platform and like you say some of them shut things down completely and redid them. Looked at them with new eyes and then changed and it sounds like it went through almost like a quality upevil and kind of got focus back on the basics and now we’re all getting a lot better quality from the sites. There was great stuff on Huffington Post that got passed around and I’m sure there were probably some diamonds in the rough that came from little known people that once in awhile got something that went viral. But it got really spammy. So I’m being more harsh. You’re being nice about it, but some of these things really got spammy. A few of them got called out probably from people trying to abuse it from a Google standpoint and it just gets stuff in there for either exposure or traffic or back links and then that got really cleaned up which was good because on some of these sites I think it was really starting to become a problem and people are putting content up for the wrong reasons and it dilutes everything.

Elaine Pofeldt: Well you’re a professional too in the field so I can look at things too and I can see when something is put up for that reason. It junks up the whole site. In terms of protecting their brand I think a lot of the publication said we really don’t have enough of a team to police this to the level we need to so it’s easier just to get everybody off the platform and only have paid contributors. It kind of went full circle in a way.

Phil Singleton: Right I’m so happy it did because it got a little crazy for a few years there and it really cleaned up. Thank you for your perspective on that I really want to get to the content and the topic that really excited to reach out and so happy to have you on to discuss it today which is your book. I thought, the first thing I said like I mentioned at the top and then earlier is the title is just so awesome. Probably personally the best book title I’ve ever seen from a business standpoint because it probably just spoke to me and how I’ve always wanted to run my business, what I’ve aspired to. One of the other things I just personally see in terms of technology and maybe some of the agency and digital type businesses that are run because a lot of things we’ve seen I want to give you a little bit of a preface about why I think your book is important to me and how it resonated with me and kind of dig into some of the things that you wrote about and why you wrote about them.

Revenues, Employee Counts & Venture Capital Do Not Equal Success

Phil Singleton: But, one of the things I see personally is all of us that are in business these days are trying to figure out ways to elevate our authority and trust and expertise and get that out there. One of the things a lot of businesses do especially startups but agencies and other digital types of companies as well is trying to put stats out there which are a lot of times they are related to things that I think don’t necessarily relate to true business success. So, let me give you an example of that. You hear a lot of times people here in my town other places that explain to you they’re being really successful because the number of people they’re hiring. Or because they’re revenue is X amount. But at the end of the day it really relates to the way businesses today are and how profitable are you or how much of that revenue are you bringing in that actually you get to take home.

Elaine Pofeldt: Exactly, yeah.

Phil Singleton: Right? A person or agency that makes a million or two million dollars a year but the owner’s only bringing down 100,000 dollars net is a lot different than a mutual person that we know Chris Parker he’s got a whole website business where he brings in around a million dollars a year and it’s just him and his wife. So obviously his take home is huge. Big difference in lifestyle and these kind of things and I think your book speaks a lot to that kind of a new lean business that’s highly mobile and allows you to live a lifestyle and go out while still bringing in large revenues and being able to take home a lot of it. To me that’s what really excites me about business in general ’cause I know there’s a lot of agencies out there that’ll say oh, we do three million dollars in sales but we’ve got 100 employees. Well, you’re struggling. I know I’ve seen this happen all the time in my town and other ones where you start building up the beast, the number sounds really good but then it gets really tough and it gets to be a lot of heartaches in there sometimes.

The average small business in the United States their leading income is less than 50,000 dollars.

Elaine Pofeldt: Well I’m glad you brought that up. I’m sorry.

Phil Singleton: Sorry?

Elaine Pofeldt: That’s such an important topic and I’m really glad you brought that up because with the title sometimes people say why did you focus on revenue and the reason I did was because when you look at the average small business in the United States their leading income is less than 50,000 dollars. So they don’t even have the revenue to be making much of a profit or to live on honestly depending on where you live in the country. I mean there are lower cost places where 50,000 dollars goes a lot longer way than it would say in Manhattan, New York. But I want to get people thinking more about moving the needle on the revenue but you also do have to move it profitably and that can take some figuring out. That’s why there’s so many case studies in the book because there’s not really a cookie cutter as you know because you run a business and I know the same thing. You have to experiment. What worked one year doesn’t work quite as well the next year because something changes with technology in your field or whatever it may be. Something comes more labor intensive, less labor intensive. So it’s a constantly changing thing.

Elaine Pofeldt: But what you take home is important as far as profits too. There’s a point where you get to where the business can be so profitable that you could be paying out so much in taxes that it’s hard to regress. So sometimes what business owners do is make a decision to actually try to lower the profits a little bit so they’re not paying so much in taxes by reinvesting the business or maybe they have a spouse who is helping out with the bookkeeping but they’re not paying that person so they might hire the spouse and then put the money that the spouse earns into a solo 401k or something like that. Rather an IRA I should say. So sometimes you have to look at those types of things too because it’s complicated the whole thing with profit. What people have on paper isn’t necessarily what they’re really capable of bringing home in the business. They may be in a high tax state and make certain decisions that would actually depress the profits because they almost have to as a matter of survival.

Phil Singleton: Excellent. Let’s take a couple of steps back though in terms of what motivated you to write on this topic? I mean obviously you come from business we talked about your journey as a journalist. But this particular topic I mean how did it, why is it exciting to you? Why is it important and how did it come about?

Elaine Pofeldt: I write a blog for Forbes and I was down to my last couple of days of the month, I write five posts a month and I ran out of ideas so I started Googling for inspiration and I came across some statistics from the U.S. Census Bureau for the non employer business. Now that’s a wonky term for businesses that have no W-2 employees. So the owners might work there but no one else. So it could be one person, generally it is one person. Sometimes it might be a couple of spouses. Friends, that sort of business. Anyway I noticed that the numbers of those that were bringing in between one and 2.49 million were going up and they rose 35 percent as of between 2011 and 2016. That was the most recent year we had the census data for and I thought that was pretty interesting. I got very curious about what they were doing and I started looking at the census data and I was able to see which industries they were in.

Elaine Pofeldt: So I published a post about this and then people said well we need to know a little more about this. I need to start a million dollar one person business. Are they doing E-commerce what are they selling and I couldn’t find this out from the census bureau because they won’t give you that type of personal information about the people who fill out the form. So I wrote to the readers and I said if you’re one of these businesses please write to me and tell me what you’re doing because people are curious. So they wrote and I wrote this post about five of them and went very viral. It was I think 340,000 page views now.

Although their numbers are going up  (one-person business millionaires) they’re still a needle in a haystack.

Phil Singleton: Nice.

Elaine Pofeldt: It touched off a whole series of profiles as I found out about these folks. Although their numbers are going up they’re still a needle in a haystack. There’s about 36,000 of them in the whole country out of maybe 25 million non employer businesses. So these are the Olympic athletes-

Phil Singleton: Unicorns, yeah.

Elaine Pofeldt: Yeah. So there are people who just don’t want people to know what revenue they get. They don’t want to go public with that for privacy reasons. All various concerns they might have. So you can’t always get them to do an interview. But the ones that would do an interview I profiled and then over time an agent noticed these and said this would be a great book and it was kind of in the back of my mind that in these posts it was hard to bring them altogether and because I was the only person writing these types of profiles I had some observations about what they had in common that I could share at a high level and go a little deeper into the profiles than you would with a blog post. So that was how the book came about and it came out last January.

Phil Singleton: It’s so awesome too. I remember when I got it, got on Amazon came the next day or whatever it is. I basically tore through it. I started actually reading it again around just slower this time. I didn’t bring it to the recording studio here. It’s sitting on my nightstand still. I’m halfway through it, the slow read. I know we talked about some of the people that you profiled and at least in general. I know there’s towards the beginning I think there’s a couple but there’s at least one E-commerce one in there for sure. You explained some of the backgrounds on some of them an overview. I obviously want get people to… I think everybody should buy the book and read it especially if you’re… I think this is the dream of a lot of people these days is to have something, a lean company that can run from home, home part time and be able to do things to where you can have the freedom to have a lifestyle and actually be able to experience life to the extent that you can.

Phil Singleton: I know that all the people in the book are like that, it’s like a child and they’re doing it 24/7 and even if they are or claim they have a lifestyle they are probably working a lot harder sometimes on the book than they are playing. But I still like our audience to hear a little bit more about the diversity or the types of businesses that were in there.

Types Of One-Person Millionaire Business Owners

Elaine Pofeldt: Oh sure Phil. Well there are six main categories I focused on and just for a little background there are some categories where people tend to go over five million. But I did not focus on those because they’re still niche and require very specific talents and skills. One of them is finance, so they’re hedge fund managers. I didn’t do that because how many people can become a hedge fund manager. That’s very sophisticated skill. Then there are people like actors, actresses people with very unique talents. I guess we could all go to acting school but we might not make five million dollars a year as an actor. So I eliminated those and I focused on the ones that I felt were most relevant to the general worker out there. So the categories were E-commerce and I’ll give you some specific people after I run through this quick list.

Elaine Pofeldt: Manufacturing which sounds really odd for a one person business but it’s actually growing. Informational content creation, so that would be things like people who have webinars. It could be people have a teachable course any kind of informational product. There’s professional services so this could be attorneys, accountants, engineers, architects who can command high prices basically for what they do, they’re that good. Personal services firms, so this could be people like fitness coaches, nutritionists. Often these types of folks will have contractors working under them. They have a methodology that they teach and then they train other people to use it. I had one person who was an eyebrow stylist who trained other eyebrow stylists to use his method in the book. So it could be something like that.

Cory Binsfield – Real Estate

Elaine Pofeldt: Then there’s real estate. There is one entrepreneur I profiled Cory Binsfield who started out buying a single duplex. He was a financial planner but he was just getting his business off the ground. Reinvested the money from that duplex, the rent money into the next property and now 20 years later he’s got 116 properties, or he did as of the time in the book. He’s probably up to like 120 by now is my guess and may throw off one million dollars in revenue. That’s something that’s accessible to all. So I’ll give you a few examples.

Camille and Ben Arneberg – eCommerce

Elaine Pofeldt: In terms of eCommerce there are Camille and Ben Arneberg they started a business called Willow & Everett it’s an Amazon store and they sell housewares and they’re a young couple. They had recently gotten married. He was in the military and she worked in corporate social sustainability but she felt like she was not really a corporate person even though she cared about social sustainability. So they wanted to create a business they could do together. What they did first was they’re both very athletic. She’s also a personal trainer. They said let’s do something related to our shared interest in running. So they started selling running compression sleeves and they decided after a short time it wasn’t really selling what they’re inventory was. So they decided to change gears, they thought about their other interests and they like to entertain people and buy cool coffee mugs and wine decanters and that sort of thing.

So they ordered I think it was like six or seven products from a private label manufacturer in India and put them up on Amazon. They had about a 5,000 dollar budget and they had saved while they were working and they rationalized that a college course would cost that much. So they were going to view this almost as a college course, even if they lost every single dollar they would have learned something, they were committed to being entrepreneurs and once they put them up there they did a horse race. Some of them didn’t sell as well as others so they discounted the ones that did not sell and reinvested that money into the inventory that was selling and ordered more. That was how they built that business. Now they’ve expanded to several other businesses. They’re selling baby products on one site and pet products on another one. They just sold a business. They kick started that business with another couple.

EThey sold maps for people who use standup desks so they don’t get blood clots by failing to shift and that one was just acquired by somebody Richard Jailichandra who was the Chairman of Click Bank, a giant marketplace for informational products. He’s trying to acquire about 100 million dollar one person businesses actually. So they were acquired by him. So that’s one example.

Megan Telpner – Professional / Personal Services

Another example is Megan Telpner she’s a nutritionist. She was working in advertising in her 20s went on a trip to Africa, got very sick. She was diagnosed with Crones Disease and she didn’t like the treatments that were being given to people with Crones disease and she wanted to heal herself with health and wellness and nutrition. She went back to school, became a nutritionist and stopped working in advertising altogether and she started blogging about her views on nutrition which had a very strong point of view that not everybody cared about the role of nutrition and healing and over four years she was on a panel like this. She blogged every single day and built up a following, very gradually through hard work. These are not overnight success stories.

They started selling a product called the three day green smoothie fast and this was 11 years ago so it was a pdf file basically. She sold it to her email list but her email list was not an email list in a CRM system it was just the people in her email. So this 10 dollar product she saw people bought it so she sold it to some more people. This led to other products like courses, eventually and then she started something called the academy of culinary nutrition where she trains people in her entire system of cooking. Along the way she wrote two cookbooks for Random House called the undiet, easy ways to cook nutritious foods. So that was how she built her business. Now she’s also gotten into coaching other people in their businesses, people like nutritionists who are trying to build their business. So she’s an example of professional service, personal services. But it’s a hybrid because she’s selling informational products.

Rebecca Krones &  Luis Zevallos – Manufacturing

Elaine Pofeldt: We say informational products people think it’s going to be a webinar that then tries to sell you some other thing and what I found with the ones that have sustainable business it’s a real value in terms of what they sell. She has a big following among nutritionists and they really trust her as far as what she’s teaching about nutrition. So I think that’s really important is a real value there. Then another example would be Rebecca Krones and her husband Luis Zevallos, they are in food manufacturing. They sell honey online and they’re doing what a lot of people are doing with manufacturing which is using a co packer. They had the good fortune in that her father is a beekeeper and he sells the bees to commercial farms but he wasn’t doing anything with the honey and she did some research and she found that a lot of people were worried about the origins of their honey at one point there was a scare that adult aerated honey was on the market. It has bad things in it and so she knew where the honey came from and so they put up a site for tropical trader factory foods and they didn’t want the responsibility of bottling up the honey and putting the labels on.

Elaine Pofeldt: So they hired a firm called a co packer that does all of that so that it can be sold commercially. There was another woman I came across after I wrote the book who her product is called Booby Bars it’s a nutrition bar for new moms to keep up their energy level and produce milk for their babies. She was a neonatal intensive care nurse. No business experience whatsoever. She was a mother of three, she was running this volunteer group helping the moms and she started baking these bars for the women and they were so popular that the women started offering to pay her because she was making them in such a large volume. You know how people always say you should turn that into a business. This is really one place where she did and she went to a co packer because as you scale up you really can’t make the stuff in your kitchen because of food safety rules.

Elaine Pofeldt: She was able to get the product into Walmart. (Laughs).

Phil Singleton: There it is, there’s your big break.

Elaine Pofeldt: And she told yeah, you’re a marketer and branding guy. She was worried about the name that Walmart would find it too direct but she said they didn’t even bat an eye. They were fine with it and she went on Shark Tank and she’s done really great with the business. So there are a lot of ways you can do these things.

The Millionaire Next Door

Phil Singleton: Yeah so fascinating the diversity and like you say that’s my favorite thing about the book is it’s in some ways one of my very favorite books but before yours is on the list now too is The Millionaire Next Door.

Elaine Pofeldt: I love that book.

Phil Singleton: You know about how the things that you perceive them to be aren’t and how people live high consumption of lifestyles. Some of that I felt some of that, I don’t know if you intended it, but I feel like when I read some of the stories and the way people are they’re hardworking people that are just trying to go after passions and then they’ve got experience and all this kind of thing for people trust them and they’re just working hard. They’re probably also a lot of them are probably just inherently smart people and maybe low consumption I’m guessing. But it felt like that kind of similar type of small business where you had that blue collar work ethic in terms of them really putting the time and effort behind it and then just turning it into something real. Was the feeling that I took away from some of it. I don’t know that that was necessarily your intention but it really struck me there and I thought that was really interesting.

Elaine Pofeldt: That’s interesting that you took that away. I agree with you about that. I think these folks are very hardworking. They’re self motivated. You have to be to run a successful one person business ’cause there’s not a boss there cracking the whistle. Every once and awhile someone will post something like what do I do about motivation. And if you really are not motivated it’s very hard to run a one person business. You can get external motivation by getting a coach or a system of accountability around you, similar to people with exercise right? You have people that are just at the gym at five in the morning no matter what it could be a blizzard. Then you have other people have a personal trainer. They both maybe equally as fit, but these folks have put their motivated themselves or they’ve put the systems in place with a coach or someone like that to keep them on track. It’s not always easy to run a business. These are not get rich quick type of people.

Phil Singleton: Right.

Elaine Pofeldt: I’m not interested in telling those stories because they are not sustainable and I’m more interested in people creating lasting value. Giving something back to the community. It doesn’t mean they have to be almost a nonprofit. But giving something to their customers that makes their customer’s lives better I think is really important ’cause we’re at a point in business where it’s easy not to go in that direction. We see a lot of bad examples of business. So I don’t want to tell those stories. I want to tell the ones of the people that are doing things right and that are working hard.

Phil Singleton: You have to have two pieces of it too. You can’t work hard on something, make a successful profitable business and still on your lifestyle and be making bad decision where you’re maybe squandering the fortune that you’re making. Even to some extent I mean just running my own business there’s some people that take chances with some of the reinvestment money that they make and you got to basically be doing all that stuff which to me then feeds into that work ethic. These people really must be able to not only work hard and be pretty smart in terms of how they’re making money but also kind of how they’re saving and reinvesting in their business. You almost have to have all of those pieces. I think, I’m guessing I don’t have research on it.

Elaine Pofeldt: You do. There is a certain amount of R & D that they do. Some of them like Alan Walton in the book who runs a spy camera store online called SpyGuy uses profit for his accounting and I noticed that a number of them do that where you put your profit away first and you set aside a certain amount of money to do the reinvestment because that’s one difference between these businesses and the sort of scrambling freelancer is that there is a strategy behind it. The owner does step back a little bit and think about okay what is the purpose of this business. Is the business helping me in my life’s biggest goals? Do I have time for my family? I started this business so I have time. Do I actually have it? They set back a little bit and think about the purpose of why they’re doing it all and they do realize the importance of keeping it fresh and sustainable. So you have to do R & D. Even I do R & D in my writing and contact business because there’s new stuff coming out all the time. You can’t know if things are going to work until you try them.

Elaine Pofeldt: Sometimes it costs you money.

Phil Singleton: Right, right.

Elaine Pofeldt: That’s another thing I have to point out which is sometimes folks are thinking about leaving their job to start a business and they can maybe do it without risking any money. These folks have really taken the risk out of things to some extent because they’ll start the business on the side and they do small experiments to test what worked.

Phil Singleton: Was that pretty common that they had the foot kind of in the other boat a little bit and grew it enough to step away?

Elaine Pofeldt: It’s pretty common. Not in all cases. A lot depends on the stage of life. As people who have kids and dependents and things like that often have to start it on the side because it’s very hard to save up enough money to create the perfect circumstances to start a business. The average American has trouble saving 400 dollars, right? So when you think about six months of living expenses, six months of business expenses all the conventional advice which is correct, I mean who can do it. So the way around that is you start it on the side and as it builds up revenue you finally can jump from the job and go into it full time. But you do have to be willing to risk some money because there is some risk to running a business and if you want zero risk at all in your professional life and financial life this is not for you.

Common Success Trait: Ambitious, Self-Educated Risk Takers

Elaine Pofeldt: It’s for people who are willing to take very smart calculated bets on themselves. Ben and Camille they were committed to learning what it took to being entrepreneurs. They knew they wanted to be entrepreneurs. So even if these products didn’t sell they were willing to bet that 5,000 dollars. Now a lot of people don’t have 5,000 dollars but over time you could save up or you could have fewer products if you wanted to be in E-commerce. But there’s going to be certain elements of people might not buy it. That’s the thing you have to be mentally prepared for. It can be stressful for people who are used to going to their job and then in two weeks they get a paycheck whether or not their efforts were successful they would get paid. If they’re really unsuccessful for awhile they might get fired. But basically the money is guaranteed, it’s not in a business.

Elaine Pofeldt: But these are folks who thrive on that and they understand it. But I wouldn’t say they’re extreme risk takers. They’re not like Elon Musk. They’re kind of mildly risk takers and that’s why I thought their stories were so appealing cause there are a lot of people in corporate jobs who are just starting businesses who have that same profile who don’t necessarily don’t want to be the highest rollers in town. But they are willing to take a little gamble on their good idea and on the chance to have the better lifestyle and maybe they’ll decide how much they’re willing to risk. Similar to like if you want to Las Vegas you decide alright that’s it. I’m going to bet this much and that’s it. They kind of take that attitude and then they can go into it with the spirit of fun. But they do put things in place so that they don’t have to end it prematurely.

Elaine Pofeldt: Sometimes it might be that they have a spouse or life partner who has an income coming in or I’ve seen cases where people downsize their lifestyle. I’ve seen this with older entrepreneurs. Sometimes they own a home and now their kids are out of the house and they want to start a business and they might sell the house and move into a rental. Then they have money to invest in a business. I didn’t focus in this business in this book too much on things like franchises. But there actually was one franchise case study in there too so that’s an option too. In that case it was a uni-shipper’s franchise.

Phil Singleton: Yeah sometimes that’s even a bigger up front gamble because it’s a bigger investment.

Elaine Pofeldt: But you can do it. You can get to one million and what he did was he used an outsource back office service so he didn’t have to have all the employees that you would normally have in a franchise and then he eventually liked the back office service so much he acquired it. So there are ways even with that you can learn from these entrepreneurs about how to keep things very lean. But going back to your point about the Millionaire Next Door these are not wasters of money. They’re not people who have to drive a Maserati. I’m not saying anything against someone who wants a Maserati if you like sports cars, but they’re not living for other people. They’re living for who they are and what they want and sometimes they do go on nice trips or I haven’t been to many of their homes so maybe they have really big homes. I don’t know, but the impression I have gotten from them is that their lifestyle focus and they want to build a sustainable lifestyle.

Phil Singleton: Fascinating. I want to wrap this up with just, I should know this but I don’t, first book that I read from you. Was this your first book or?

Elaine Pofeldt: This is my first book under my own name. I’m a ghost writer so I’ve written a handful of books for other people but this is the only one I can really mention here.

Phil Singleton: So just out of curiosity any things that you’ve learned? I’ve written a couple you went through a traditional publisher which is great. We did ours through several different partnerships that I had co-authors and what not. Direct publishing, but I’m just curious. Seems like every time I’ve gone through a book writing process I learn something new. Is there some things that you’ve learned that you would have done differently just in the process? I’m just kind of curious just as somebody myself might write another book again and I know every time I’ve gone through one I was like wow that was a good idea I wish I would have done that a little differently. Just curious if you had anything that you learned from it that you might do differently in the next book?

Elaine Pofeldt: You know there’s always something that you learn you’re so right about that Phil. One thing I found was very valuable was I had events around the book where I would bring together the entrepreneurs from the book and do panel discussions. Sometimes I would get invited to do key notes and I did do some. But I really I liked the more collective approach. So folks would come and get to meet the people from the book and that was extremely popular. Sometimes we’d have two or three hundred people at the events.

Phil Singleton: Wow, that’s great.

Elaine Pofeldt: I think there was something really nice about it not being filtered completely through me. So people could see that these are real people just like themselves and hear it in their voice and there would always be somebody…if you’re a person in the audience maybe you would relate to one person in particular a little more because of the same industry. They’re your same age or your both women or whatever you have in common with them. That was really something that I enjoyed and I thought was very positive for the book and I would definitely do again. I didn’t know to do that when I did the ghost written books with the ghost writing clients but it’s something that I’m now suggesting to others that they do that if they have a case study driven book.

Phil Singleton: Right.

Elaine Pofeldt: The real people plus you can do it regionally. So I did it in San Francisco, Toronto, Chicago, well I didn’t have a panel in New Orleans but I did go. I did it in Austin, Texas. I’m in the New York area do I did it there and I wound up keeping in touch with a lot of people I met at the events. Thinking of something like that that you could do that really brings it to life and makes it about not just you but the subjects of the book. To me that was my biggest takeaway. That that was very, very helpful and I would also record these things in Facebook lives so it enabled me to bring that message to people around the world who would never be able to come to an event in New York. If they were India or somewhere like that necessarily. But they could at least learn the message of the book and there’s always more to say on the topic. So I was never worried that once people were exposed to it then they’d never read the book. It’s a topic that’s evolving by the minute. Like we didn’t even know people could do this a few years ago.

Phil Singleton: Right.

Elaine Pofeldt: So you learn a whole lot in the next few years.

Phil Singleton: It’s interesting ’cause I think at the beginning of the book or somewhere towards the beginning its like there’s only a matter of time before there’s the billion dollar one person company.

Elaine Pofeldt: Yeah that’s evaluation. Yeah it was funny that was a VC and I was talking with someone else about this yesterday, who knows? I mean I don’t know where it could go, but I’m hearing about bigger and bigger revenue businesses. We’ll see what the profits are as you pointed out in the beginning. But just the fact that they can raise the revenue so much without a big team. They often have a team of contractors and that sort of thing. But that’s to me that’s very freeing for people ’cause there’s a lot of people that don’t like managing people. They just, they’re fine with managing-

Phil Singleton: Well this gets so much easier now to build a system and then specifically hire people out as a gig or a contractor as part of your system for something specific. So you build this machine up and it’s like yeah I can totally see it. As long as it doesn’t strip all the profit away from it and you find a way to add a lot of value and then be able to decide and stop somebody from building something really big and scalable.

Elaine Pofeldt: Oh, no and these folks are very good at hiring contractors. One of the things I learned from Sol Orwell who’s one of the entrepreneurs, he pays a lot for his web designer. I don’t remember if he was on or off the record what he pays her so I don’t want to say it but it was what you would consider pretty high fee. But he found that really good people can get done in one hour what it’s going to take a mediocre person six or seven hours to do. Excuse me, and so that’s one rule of thumb that I’ve used in my business. I try to find the best professionals I can even if their hourly rate is high because these folks are so busy they don’t want to pad the bill anyway. They’ll bill you for one hour and in that hour all the knowledge that they bring is so valuable that it’s not worth trying to find somebody who’s charging the rock bottom price who’s not going to be as good generally.

Connect with Elaine Pofedlt (and Please Buy Her Book)

Phil Singleton: Great, great, great advice because I think we’ve all learned the hard way. Shopping around ends up wasting a lot of time and gives you a heartache. If you just find the experts and then pay them a fair rate you’re likely to get the best return on that. Let’s since we’re coming to the end of this time wise, I’d love to tell our audience one where we can buy your book and two, where the best place is to follow you online for your content.

Elaine Pofeldt: Sure, well the book is available on Amazon, Barnes & Noble, all major book stores. So I hope you do enjoy it and they can reach me at TheMillionDollarOnePersonBusiness.com It’s the title .com. No numbers, all spelled out in words or they can write to me on LinkedIn or Twitter under my full name. I’m sure it’s in the show notes so I won’t spell it out it’s a mouthful. But I do invite people to write to me, I really love hearing from other people in ultra lean businesses and I do write back and I love hearing about what your questions are because it helps me as I’m writing to become a better journalist and think about what were the unanswered questions I didn’t address so I can address them the next time.

Phil Singleton: So great Elaine thank you so much for spending the time. It was absolutely fascinating. Thanks for writing such a great book and then for agreeing to reach out on LinkedIn come to our show and share such great insight and some of your background with us. Personally I thought this was one of my favorite ones so I really appreciate it.

Elaine Pofeldt: Awe, thank you so much this was great. You ask really awesome questions. It was really a pleasure.

Phil Singleton: Alright. We’ll see you soon.

Elaine Pofeldt: Thank you.