entrepreneurs

Entrepreneurs: Having a job vs. owning a business

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Here’s a question worth pondering:  Do you work for yourself, or does your business work for you?  There’s a major difference between the two.  Allow me to explain.

Many entrepreneurs set out to create a business but get derailed somewhere along the way and wind up with a job.  They get stuck trading their own time for money.  Lori Grenier – of Shark Tank fame – aptly noted that “Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week.”  Ouch.  If you love freedom, working for yourself is far more appealing than working for “the man”.  But if you’re not careful, you might just miss out on the very freedom you were originally seeking.  If your business wouldn’t survive if you stepped away for an extended period of time, then it’s not a business after all.  It’s merely a job.  It could be a high-paying job, but it may not provide the freedom you’re pursuing after all.

I’m guilty of this in my own business.  I’m hesitant to give up control over certain elements of my book enterprise, and this has certainly limited the growth of my company.  In 2017, my wife and I plan to switch gears and outsource as much of our business as possible.  Our end goal is to stop physically sourcing books on our own, and instead rely on partnerships, technology, and hired help to grow our top (and more importantly, bottom) line.  We plan to continue sourcing books on our travel adventures, since it funds our trips and allows us to save money on taxes thanks to business expenses and deductions.  But we’ll be sourcing on our own terms, rather than regularly hitting thrift stores and library sales to put food on the table.

Here’s our road map for creating a business instead of a job:

Phase 1 – Start Up.

Phase 2 – Scale Up.

Phase 3 – Step Back.

Phase 1 – It’s important to jump into the start-up phase quickly.  Far too many business plans are abandoned before they ever see the light of day.  Why not test your business model on a small scale without investing too much time or money, until you settle on a profitable strategy to pursue further?  It’s the concept of “ready, fire, aim” instead of being crippled by “paralysis by analysis” and never getting started in the first place.  We started our book business with a simple “100 book weekly challenge”, which was the catalyst that proved the Amazon FBA model could work for us.  There are other articles on this blog – and many other exceptional blogs and YouTube channels out there – that explain in detail the start-up process as it relates to selling books online.  In this post, we’re going to focus more on what to do AFTER your business has crossed the starting line.

Phase 2 – Once you have proven the initial business concept, it’s time to see if the idea is scalable.  For example, if you can find 100 books in a week and earn x dollars of profit, can you find a way to snag 200 books a week and earn twice the profit?  What about 500 books per week, or perhaps 5,000?  At what point will you run into limitations?  Will you run out of hours in the day, capital to invest in more inventory, or sources to find books?  Will you bump up against your inventory storage limits?  As you encounter these limitations, you must find creative ways to solve these problems to keep growing your business.  Rinse and repeat until you have achieved your goals.

Speaking of goals, one concept that is rarely addressed is the power of enough.  Too often we are focused on growing and scaling our businesses with no clear end goal in mind.  Sadly, the quest for more is an insatiable one.  If you don’t have specific goals for your business, how will you know when you’ve attained them?  How will you define success?  If your goal is to earn a few extra grand each year to help pay off debt, save for college, or go on a dream vacation, then STOP scaling when you have achieved that level of profitability.  If your goal is to quit your day job and replace your current income, then STOP building your business when you reach your goal.  At this point, consider switching your mindset from one of growth to one of maintenance.  It requires a significant investment of time up front to scale your business, but once your business is “big enough”, seek out ways to extract time from your business rather than extracting more dollars. Your time is the most valuable asset you have, and it is a non-renewable resource.  I don’t know about you, but I’d rather have more time than more money.  Proceed accordingly!

Don’t get me wrong here – growth isn’t bad and money isn’t evil.  But if you lack clear goals you will struggle to ever be fully satisfied with your business success.  You can always re-negotiate your goals with yourself, and establish new targets.  Once you have achieved enough, however, focus on ways to remove yourself from your business.

Phase 3 – As outlined above, the ability to step back from your business is what separates those who can work ON their business from those who work FOR their business.  Can you outsource pieces of your business and still earn a profit?  If so, you can effectively buy time for yourself while simultaneously establishing residual income.  Not a bad trade-off!  In order to step back, you must be willing to give up some level of control in your business.  For many people, this is easier said than done.

One point worth clarifying here: I’m not talking about merely increasing efficiency.  For example, you could save time by investing in software to help you list books more quickly.  That time savings will certainly be helpful in scaling your business, but your business would still be dependent on YOU to continue growing.  I’m talking about hiring a prep company or an employee to list your books for you so you can remove yourself entirely from the equation.  Efficiency is great, but outsourcing is better – if your goal is to build a business instead of creating a job for yourself.

Alright, it’s time to step down from my soapbox.  But I do hope you’ll take the message of “enough” to heart!

soap box

So where do we go from here?  This post focused mostly on theory and strategy, but we’ll dive deeper into practical tactics for scaling your business over the next few weeks.  Check back often as we take a closer look at online arbitrage, hiring scouts, and selecting a prep company.

Do you have other ideas related to scaling your book business?  Comment below to get the discussion started!

16 Comments

  1. Cale bas always sage words of advice-see too many “book sellers” that cannot define their business model-your matrix for thinking about such is very helpful.

  2. Caleb,
    Great post! I’m currently working full time and have started a book business in addition so time is definitely important. I’m interested to hear what advice you have about hiring a book sourcer relative to training and pay. I just don’t have enough time to go out and find the books that I know are out there in my area!

    • There are pros and cons to hiring scouters. But if you want a hands-off business it’s a great step to consider. You’ll have to be able to train them well enough to go out and find their own books. You can do that yourself or check out Bryan Young’s “BusProof Business” course where he shares white label videos you can use to train your scouts.

  3. Hi Caleb,

    I really appreciated your post. I have just completed my first year as an amazon seller so I find it very timely.

    Happily, I made enough money in the 2nd half of last year to continue on with enthusiasm . Mainly because of books!

    As I start this year I have made up my mind to focus primarily on book sales. I have set one BHAG (Big Hairy Audacious Goal). In 2 years moving out of my apt into a RV to be completely mobile. I want to travel!! (More then I currently do)

    This year I put together two goals to start with. 1. Outsource all my book purchases to a prepping company. 2. I’m have set an ever increasing monthly goals for purchases. I monitor each month results where I track # of books sold, my ROI % and % previous months new listing that sold within 30 days. The money by those sales fund the next month purchases. You can’t achieve without keeping your eyes on your goals!

  4. I started my book business with thrifting, auctions, and estate sales. I’m looking at the next phase, which for me is going to be eFlip. How much capital do you think it would take to make a good start with eFlip?

  5. Caleb,

    Thanks, as always, for such great information to process and create forward moving thinking.

    Bonnie

  6. Caleb,

    In theory you are correct. But let me give you in brief my experience as a previous owner of 3 companies with an annual turnover of €35M and about 92 employees.
    It’s true that as a business owner you work a lot more than your employees. I worked 80 hours/week during 26 years. I also wanted the freedom to enjoy life from the hard work I did. Well, the only way you can do this is when you sell your business or when you have people (family) who are doing your work. So, after selling my company (3 years ago), I decided to take a sabbatical year. I got bored. I started to visit auctions and and buy/sell stuff. I soon figured out that to do this right, I had to get a big warehouse and employees. That’s when I started to read about online sales and I ended up with Greg Murphy and Caleb Roth. I soon realized that I didn’t want to have Greg’s business model (nothing wrong with it). I stumbled upon another bookseller by the name of Guusje (must be Dutch) and “cherry picking” is my business model. We are now 15 months later and I have a monthly turnover of €7000 with a ASP per book of €23. I do this with my wife and we spent about 25 hours a week between buying, prepping and selling. I also wonder when will be my breaking point of staying where I am (and considering the book selling as a hobby) or scaling my business to a 2 to 3 people company or more. If I decide to do the latter, then I will have to work again 80 hours a week because even outsourcing means you still need to be on top of your “employees”. I used to be a textile man, importing garments from the Far East. I still get a monthly commission on sales the customers I presented about 3 years ago to some Chinese suppliers. Then my customers wanted to cut me out of the deal and the Chinese suppliers agreed but they still pay me the commission without me working for it. (I have a solid contract) but guess what ? The last 2 months I received no commission because economy in Belgium for garments is so bad. Well, if I would have the samples like I used to work and visit my customers, I would have gotten sales. Not like the “good old days” but as a salesman I would have sold some garment or 2. So in this example where I outsourced my customers to my Chinese suppliers, I can tell you that because I have no samples and am not able to visit the custumers (and agressively sell them garments), it is the first time in my career that in 2 months I sold nothing. And why ? Because I am not on top of it anymore. But I hope Caleb, you can prove me wrong. 🙂

    • Hey Jose, interesting thoughts and perspective. The work involved in hiring someone is more than just doing it yourself at first, but if you hire wisely and get out of the way, you’ll make up for that time fairly quickly. It shouldn’t require extra time on a weekly basis if you set up good systems. Why do you think that you’ll end up working 80 hours again? Start with hiring a scout, train them on how to find products like you do, and then turn them loose. If that works, then hire another, and another. Scale in this way. If it creates more work for yourself, tweak the model and try again!

  7. I have a “side gig” of ~5 hours a week working for a friend of the family who has a small business that earns him about 100k a year. He has one product which he acquires wholesale and about 100 SKUs. He’s been at it for 5 or 6 years. He also does some MF through Amazon, but not a lot. He has a small warehouse (for a while it was a storage closet in a legal office) and one other employee besides myself. His business runs like a well-oiled machine: we pack and ship daily (an hour or two a day), take inventory as needed, and he orders a pallet once a month or so. We ship with ShipStation. His web store is run through Shopify, I think. Another contract worker handles. customer service from her home. The amazing thing is I don’t think he has set foot in our warehouse since last August. To me that says if you invest in the details upfront and employ the right people, it is possible to be very close to hands-off. Now, this is not my own business model at all. I am an FBA bookseller and currently do all the work myself. My current goal is to scale to the point that I can have a small warehouse space and similarly automate, but I am currently perfecting my sourcing and don’t have nearly enough capital. It’s good to have goals, though!

  8. I started mid 2016 and enjoy this business but am now in a situation where I am working FOR my business. I came across a deal for gaylords and took the plunge thinking I could go through them myself. Now I am paying for the storage of gaylords since I don’t have a warehouse as I move the gaylords one at a time. If I only use Amazon as a selling venue, I am ending up with most of the books as not sellable. If I start to list on eBay, now I am evaluating there also for profitability which takes additional time.
    I should have walked into Phase 2 instead of jumping but I am looking back and evaluating my options.
    Just sharing an experience.

    • Thanks for sharing! Gaylords are tough for the solopreneur, and with the increased fees it’s harder to skim a bunch of profit off of the $8 FBA titles. Keep evaluating, work through the gaylords you have, and then figure out which direction you’d like to go.

  9. Thanks so much for all the great information! What do you do when you run out of thrift stores?? I struggle to even find 100 books a week.

  10. I agree with everything you said 100%. I am still in the beginning stages of the the business. I have been selling books on Amazon for about a year and a half, but got serious about it about 6 months ago. It started as a hobby to stay out of trouble and kind of ran crazy from there.
    I had my girlfriend quit her job to source and list. I than tried to find people to source for me, but they would do it for a couple of weeks than just disappear. I take full responsibility for that I assume I did not give enough guidance. I still work a full time job and am not to the point to wear I can quit.
    So I rethought the business and now I have started buying in bulk. I am not to the scale of Greg Murphy by any means not even close…lol. This solved my sourcing problem, but then caused new problems. Now I need to get them list and find ways to make money on the book that have no value on Amazon.
    So now I am getting ready to hire my girlfriends daughter, finding recycling companies, finding books stores to buy the extra books, and working Sundays to sell more books at the local flea market. Kind of crazy right now, but in the next year to year and a half I should have people and systems in place to take some time off.
    The ultimate goal is to is to make enough money to keep our children employed and have a legacy. At the same time making enough money for me to vacation and enjoy our family.

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