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The Story of My History In Business – Part 7 – Getting My First Clients
This is the next installment in an ongoing series where I talk about my history in business, starting all the way back when I was a child to now, my mid-forties. Feel free to read parts zero, one, two, three, four, five, and six if you haven’t yet to get some context. We last left off when I had, finally, just quit my last corporate job and started my own business full-time… October, 1996
-By Caleb Jones
I rented a small office in the cheaper part of downtown Portland, Oregon. The office was on the second story of an old house that had been remodeled into shitty little offices for artists, since artists were the only ones poor enough to afford these crappy offices. I was the only non-artist in there of course. There was no parking, meaning you had to parallel park on the street, often several blocks away. Not fun when you’re carrying computers and servers. There was also no elevator; fine if you were an artist or attorney, but for a computer guy regularly carrying heavy computers and servers to and from your office (computers were really heavy back in 1996), not good. I definitely had not planned ahead. I didn’t care. At least not yet. I was too excited.
I used an old scuffed-up desk that my dad was going to throw away and bought two cheap folding tables from Costco. I then made my second mistake; I purchased a very expensive laptop and my own server. I figured, again incorrectly, that since I was a computer consultant I “needed” to have the “best” laptop and my own server. I borrowed several thousand dollars to buy this equipment and ended up rarely using either one. Man, I was a dumbass. All of this would bite me in the ass later. For my next mistake, I allowed a friend of mine at the local chamber of commerce to talk me into buying an actual phone system for the office. All I needed was a single, cheap phone line for both voice and internet (we had dial-up internet back then), but I was an excited, young dumbshit, so I purchased an expensive, small-but-fancy multi-line phone system thinking I would need it “someday” (which I never did).
Despite a decent amount of book knowledge about business, I was completely ignorant of the core maxim of brand new businesses: cash flow is king. Low monthly cash in (income), with higher monthly cash out (expenses) is what kills new businesses. It’s what causes most guys to eventually throw their arms in the air in defeat and go back and get a corporate job. Your goal should instead be as cheap, cheap, cheap as humanly possible when you start a new business. I would, later in life, go on to start multi-million dollar companies with just a laptop, but again, I didn’t know this at the time. Instead, I was stupidly increasing my debt (meaning monthly loan payments) and needless business expenses that jacked up my monthly payments, making it that much more difficult to get the business needed to stay in business. Loans on my computer equipment, payments on my phone system, my monthly office rent, not to mention the gas of driving 35 minutes one-way to and from my office every day when I could have just worked out of my home. Stupid. But exciting! I didn’t know any of this was stupid yet. I was just pumped to be a business owner. Then I started doing things correctly. I worked fast. It only took me about a week to get everything in place, and then I started cranking. I whipped up a spreadsheet where I calculated what I minimally needed per month, added a hunk for taxes, then divided it by $50, which was my standard hourly rate for computer consulting work at the time. That was my next mistake: charging by the hour instead of a retainer or flat fee projects. Later, this hourly rate would make me a lot of money while simultaneously blowing my brains out with stress and overhead.
I wasted no time. I got on the phone and told all of my current clients (what few I had) plus several of my old clients that I was looking for more companies that needed help with their computers. I told my parents and uncles and other local family members the same. Out of all these calls, I got one new client, and a small one at that. Crap. Not enough Next, I sat down and brainstormed a list of literally everyone I knew and had ever known. I don’t remember how many names I came up with, but I think it was about 80. (This is a technique I still teach to this day.) I looked up all of their phone numbers, if I could, and put them down.
Next, I grilled all of my close family members and friends for anyone they knew who either owned their own businesses or who were closely aligned with anyone who was. From this, I got another big hunk of names and phone numbers, I think about 30 or 40.
Armed with my big list, I would drive to my office at 8am every morning, pick up the receiver on my stupid, expensive phone system, and call people. I used some techniques I had learned from several books on telemarketing I had read. It was scary. Sometimes my hand would shake as I picked up the phone and dialed the numbers. My heart would beat out of my chest. Often I would just sit at my desk and stare at the phone and sweat in fear. On really bad days, I would spend time screwing around on my dial-up internet connection reading nerdy websites (which was pretty much all the internet had back in 1996) or playing a little Diablo on my computer. It was brutal, but eventually, I worked through the list. Most people were very nice, even the ones who rejected me. A small percentage of people were rude or angry, which just made me even more scared. But I knew I could never go back to the prison-life of being an employee, so I kept trudging forward.
Over the months, I started getting referrals and word-of-mouth business too. Not a lot, but enough. Through all of this work, I finally hit my goal. I don’t remember exactly when I hit my goal of paying my bills, but I’m pretty sure it was around the spring of 1997, less than a year since going full-time. I was sooooo happy! I was now an honest-to-goodness business owner, actually making enough to pay my bills (although barely) as a full-time, self-employed computer consultant, something many other men I had known had tried and failed.
It was still rough though. I had to be ridiculously careful of every penny I spent. Sometimes I was late on my bills. At one point I even was behind on my payments for the stupid phone system, causing them to call and harass me. I finally paid them what I owed and returned the phone system back to them, getting just a single normal phone line like I should have in the first place. I was paying my bills, sort of, and I felt good about that, but I still felt poor, something I promised myself years prior that I would never feel again. It was at this time that I made the biggest mistake of my entire life; I got traditionally married. This would disrupt my business and all my hard work in ways I couldn’t even imagine. I’ll talk about that in the next installment. Want to talk to other guys working on Alpha Male 2.0? Join the new Alpha 2.0 Forums HERE and/or join the Alpha 2.0 Facebook Group HERE. They are both FREE to join!
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Eric C Smith 2019-05-16 08:08:23
Its amazing how much you value even taking out driving and gas out of your expenses. Lots to learn here from you. thanks.
bluegreenguitar 2019-05-16 13:57:22
Despite a decent amount of book knowledge about business, I was completely ignorant of the core maxim of brand new businesses: cash flow is king.This is a hard lesson to learn - one that I am still learning haha. I always want to get the cool gadgets, even before there's the cashflow.
Caleb Jones 2019-05-16 14:27:33
I always want to get the cool gadgets, even before there’s the cashflow.I think we all have that problem to some degree.
American 2019-05-16 19:50:34
Love these stories. Separately, why do you have the hyperlinks to the prior installments of this story colored black like the ordinary text? Standard operating procedure is to color them blue or red.
Caleb Jones 2019-05-17 09:35:20
why do you have the hyperlinks to the prior installments of this story colored black like the ordinary text? Standard operating procedure is to color them blue or red.Any time you report any problem or aesthetic suggestion with this blog, you must include what browser and device you are using, otherwise I am completely powerless to fix it. So let me know. Also let me know if you've messed with your own color scheme in any way. I am looking at this article right now using Firefox on a PC and Chrome on an Android and in both cases the hyperlinks you're referring to look perfectly bright blue, not black.
American 2019-05-17 17:22:35
Regarding the hyperlinks. For whatever reason, today all the hypers are blue like they should be. I didn't change anything on my end. I guess I can chalk it up to one of those IT things that happen out of nowhere.
Fanguy 2019-05-17 23:55:49
TonyOutOfNowhere 2019-05-18 06:18:09
Hey BD, What service did you actually provide for your clients (what do you mean when you say "computer consulting") if you could explain a little? And do you think, did they choose you because of the superior value you brought to them over other consultants, or is it because of some other thing (persistence, acquaintance...). Thanks!
Caleb Jones 2019-05-18 11:07:01
What service did you actually provide for your clients (what do you mean when you say “computer consulting”)On-site network support. Basically I was the "computer guy" who set everything up and fixed all the computer problems for companies who were not big enough to afford to hire their own full-time IT guy.
And do you think, did they choose you because of the superior value you brought to them over other consultants, or is it because of some other thing (persistence, acquaintance…).80% of it was customer service and friendliness. The biggest complaint, by far, and I heard it a lot, about computer consultants is that they're hard to work with because they're either really nerdy and socially calibrated (weird) or they're just assholes. I focused on being really, really nice to everyone, and it worked. I also did whatever I promised and didn't waste people's money (that was the other 20%).
TonyOutOfNowhere 2019-05-19 00:23:32
80% of it was customer service and friendlinessDo you think that this is applicable to other industries and niches, or was it specifically the case for yours at that time? I seem to remember your advice for businesses who just started that they should focus most of their energy on customer service (aside from sales and marketing of course). Do I remember correctly?
Caleb Jones 2019-05-19 10:56:18
Do you think that this is applicable to other industries and niches, or was it specifically the case for yours at that time?With niceness, many, but not all. With customer service, yes, all.
I seem to remember your advice for businesses who just started that they should focus most of their energy on customer service (aside from sales and marketing of course). Do I remember correctly?Yup.
Phero 2019-05-20 08:34:20
How efficient was your service to them? Of course we all strive to be at 100% but it just isn't possible due to factors beyond one's control. What then would you say is the minimum level of efficiency for max client satisfaction and retention?
Caleb Jones 2019-05-20 14:11:45
How efficient was your service to them?Extremely so. One of the best in the city.
Of course we all strive to be at 100% but it just isn’t possible due to factors beyond one’s control.Correct. Read this.
What then would you say is the minimum level of efficiency for max client satisfaction and retention?90% is achievable, but 80% puts you at the upper echelons of all business owners on the planet.
joelsuf 2019-05-20 22:01:05
On really bad days, I would spend time screwing around on my dial-up internet connection reading nerdy websites (which was pretty much all the internet had back in 1996) or playing a little Diablo on my computer.I deal with this a lot. Even though I just write stuff for people, I get discouraged a lot and that's when I start dicking around. It's been affecting my productivity a lot. What can I do to stop this?
Kevin 2019-05-20 22:03:47
I like this post a lot It is the calm before the origin story of black dragon! In the next installment please include how you developed your mission And something about the professional help you got on real estate and taxes ...the lessons if you will In this installment would a part time job helped with your cash flow or just delayed your business from finally taking off?
Caleb Jones 2019-05-20 22:50:53
In the next installment please include how you developed your missionNo. That would come many years later... there will be several installments before I get to that.
And something about the professional help you got on real estate and taxesSure. Coming soon.
In this installment would a part time job helped with your cash flow or just delayed your business from finally taking off?In this case it would have delayed it greatly. I never even considered that as an option.