Rank #1: PTM 031 – How to Make Money on Craigslist Reselling Washers and Dryers with Mr. Craigslist Hustle
Today’s podcast features LaJuan Stoxstill-Diggs, aka Mr. Craigslist Hustle. He knows precisely how to make money on Craigslist. LaJuan was laid off a few years ago and instead of sitting around waiting for another job to fall into his lap, he started hustling. Not that kind of hustling. LaJuan figured out how to use Craigslist to find used washers cheap and turn around and sell them for a handsome profit.
In the interview LaJuan is very candid about his techniques and how you can get started. LaJuan and I discuss his story, how to find good washer and dryer sets, how to sell them for profit, and all the little details that go into this side hustle.
LaJuan didn’t stop with his own gigs. He’s shared his knowledge with the world in the form of his popular ebook, The Craigslist Hustle. Find out all about his book and his success with selling that on Amazon.com in the podcast. Or just hit up LaJuan’s site at www.mrcraigslisthustle.com.
Listen to the Podcast
Mr. Craigslist Hustle, LaJuan Stoxstill-Diggs
Highlights from the interview:
0:45 – From laid off to mover to washer/dryer reseller
2:30 – The early days of finding and selling washers every day
3:45 – Why Craigslist is the only way to go
4:45 – What makes a good buy (i.e. what to look for in a washer/dryer set)
6:30 – Why this business is a win/win
7:15 – Making the quick offers on the washer/dryer sets
8:30 – Negotiation tips and planning your trips
9:30 – Watching the Craigslist feed, auto-refreshing, and keywords/categories to use
11:45 – LaJuan’s SUV fits three sets
13:45 – Selling separates
14:45 – Storing the washer/dryer sets and the timeframe of buy/sell
15:30 – The selling process, including the guarantee
18:45 – Volume and profit ($500) every week
20:45 – Sharing The Craigslist Hustle with the world
22:00 – Marketing the ebook through Amazon.com
23:15 – Weekly ebook sales and profits
27:00 – How this has changed LaJuan’s financial life
29:30 – Balancing time with family and real estate work
30:30 – Mistakes and successes made along the way
32:30 – What’s next
Mentioned in the Interview:
Watch the Google Hangout with Mr. Craigslist Hustle
Thank you so much for listening!
View the full transcript. Click show
Philip Taylor: We’re live. Welcome to the Part-time Money podcast. My name is Philip Taylor with PTmoney.com. I have with me today, Mr. LaJaun Stoxtill-Diggs. He’s the author of The Craigslist Hustle and the founder of www.mrcraigslisthustle.com. I’m really looking forward to talking to him today because he’s found a unique, special way here to make some money off of Craigslist with his spare time. He’s a fulltime realtor and he does this on the side. It helps to bring in some extra income for his family. LaJaun, welcome to the show.
LaJaun Stoxtill-Diggs: Thank you for having me.
Philip Taylor: What made you want to start making some part-time money and how did you get going with this particular method?
LaJaun Stoxtill-Diggs: Well, the main thing is, in 2006 I was laid off from my employer at the time so I wasn’t looking to make any part-time money, I was looking to survive so I picked up a few extra jobs with my brother who is a mover. I’d just provide him with moving help and he would give me free items. In this one particular case, he offered me a washer and dryer and I really didn’t have a need for them but he told me, “Hey, if you sell it you can keep the money.” So, I said okay. And I had heard about Craigslist but never used it at the time and I had already been burned on eBay some months back so I said I was never going to sell anything on the Internet again. But, in this case I put the dryer on Craigslist and it sold within an hour for $75. From that point I said, “Hey, I’ve got something here.” Craigslist from that point on has just been a life-saver. It’s been a great source of extra part-time income for times when I was unemployed to even now that I’m a realtor. Because when I became a realtor I said, “Oh, I don’t need Craigslist anymore! I’m a realtor, I’ve arrived!” Of course you know how the housing market took a slip a few years back? Well, Craigslist was there. Just like it was for me back in 2006.
Philip Taylor: Awesome, that’s an awesome story. So this has been a success in not only finding something that works but something that’s beneficial for you and your family.
LaJaun Stoxtill-Diggs: Yes.
Philip Taylor: Let’s back up a bit and maybe you could share with us how during that phase that you were going through, you went and got your realtor’s license I’m assuming?
LaJaun Stoxtill-Diggs: Yes.
Philip Taylor: In that initial phase before you got your realtor’s license and while you were unemployed, how many time a week were you doing this sort of thing after you sold that first dryer for $75?
LaJaun Stoxtill-Diggs: I was doing it every day.
Philip Taylor: Okay.
LaJaun Stoxtill-Diggs: About four to six hours is all that it took. And for me, I found my niche was in washers and dryers because I realized everybody needed a washer and dryer so I was always able to get my hands on a set every day and it brought in a great income.
Philip Taylor: So getting the set, did that involve your brother— or is that your brother-in-law?
LaJaun Stoxtill-Diggs: My brother. The first one did. But from that point on what I decided to do was ask him if he had extra sets but he never did, so I decided to look on Craigslist to see if anybody was giving away sets or selling sets. And I found out that people were needing to sell their old set because they were upgrading to the new front-loader sets or somebody was moving in a hurry and needed to sell the set and I got it for a good price. And I learned how to work it from that point on.
Philip Taylor: Okay, so after that initial one where you got 100 percent profit off the deal, you had to learn quickly how to leverage to become a really good buyer and then a really good seller on Craigslist. Was Craigslist the only avenue you used?
LaJaun Stoxtill-Diggs: It was the only avenue that I used. As far as trying to advertise in the newspaper… it took too many days for it to actually hit the newspaper and things of that nature, so Craigslist was the only way. I remember one time when my Craigslist account got shut down because I was selling so many items and I wasn’t able to post any more. I was sitting on all these washers and dryers and different items without being able to post them. That’s something I talk about in my book as well is how to avoid having your account shut down, because I didn’t have anywhere else to sell it from that point on. So yes, Craigslist was the only source.
Philip Taylor: Wow. Okay, so you mentioned early on about looking for the washer and dryer on Craigslist. In your opinion, when you were looking for those washers and dryers early on, or when you look for them today, what makes for a good buy?
LaJaun Stoxtill-Diggs: Usually it’s going to be the sets that have a white backing where you turn it on and off. You’ll see the ones that have the brown backing, then you’ll see the ones that have the white backing. Those are usually the ones I’m going to be looking for— with the white backing. Because it’s a newer model. And I’m also going to want to know the story behind the set such as why they’re selling it, because there are a lot of people doing the same things that I’m doing so I want to know why they’re selling it. A lot of people are moving, upgrading and this and that so the story is also going to have to check out as well. In my book I have a diagram that shows you how to go in and look at the serial number and actually check the manufacturer date because that makes a big difference as well. Name brand makes a difference to. Whether it’s Maytag, Whirlpool, Kenmore, GE, the main thing is a white backing and a good story for why you’re selling it. I don’t care if it has scratches and things of that nature because over the years I’ve sold so many sets and bought so many sets I’ve learned how to go in and clean them up and relist them back on Craigslist.
Philip Taylor: Wow. This is awesome. It sounds to me that you can kind of sniff out or tell a buyer who’s— I don’t want this to sound negative, but someone who’s uneducated about what they’re selling to a degree. Or they’re not savvy about what they’re selling or there’s a reason they’re having to sell it quickly. Maybe they just don’t want to spend the time to figure out what the true price is. Because theoretically, you’re buying this thing for $100 and you’re going to turn around and sell it for $350 to make this worthwhile.
LaJaun Stoxtill-Diggs: Correct. And at the same time, by me selling it $350, if you had gone to an appliance store that same set will cost $600. This way I’m giving the seller what they’re requesting and I’m also helping the buyer save money as well. So it’s a win-win situation for everybody. I never look into why they’re selling it for that price. If it’s a great price I say, “Okay,” and I go in for it. But I do want to know why you’re selling it. A lot of times people are ignorant about it or they just don’t want to deal with it because their new set is coming. Walmart or Lowe’s is about to deliver it in 3 hours and they need to get the old set out of the house.
Philip Taylor: Okay, early on you found these deals online, so would you go look at them before you buy or would you make the offer online on Craigslist? Talk to me about going to the place to pick it up and all that stuff.
LaJaun Stoxtill-Diggs: That’s where I made a mistake, because I would want to go and see every set that I called about. That gets old really fast because you waste a lot of gas money and things of that nature. So I learned not only to look at the pictures but to ask key questions when I called about these washers and dryers. I’ve got the key questions in my book, like, “How old is it? Why are you selling it?” You’ve got to understand that not only are other people doing the same thing I am, but others are also looking for a good deal too. At any given time there is somebody looking on Craigslist for a washer and dryer, so you’ve got to be moving really quick once it hits Craigslist. Once I learned these key questions, over time I could pretty much tell if it was a good buy within the first 5 minutes and I could be on my way to get it in the next 15 minutes. You’ve got to be ready to move at any given time when it comes to furniture, washers, dryers and electronics on Craigslist.
Philip Taylor: Okay, so would you try to make an offer by saying, “Here’s my offer. I’ll be by to pick it up,” kind of deal? That way you could group them and maybe have two or three in a row that you’re going to pick up?
LaJaun Stoxtill-Diggs: Absolutely. And in my book I have a section called, “Negotiating,” where I have negotiating tips and it talks about that. When you’re on the phone and you say, “If I can come and get it within the next hour would you take such-and-such price for it?” I always tell people to do their negotiating over the phone so you know what to expect when you get there. There have been times when I’ve been able to negotiate in person, but most of the time people just want the item out of their house. So you ask them, “If I’m there within an hour will you knock off $50 or $60?” One thing you’ve got to understand though, is that the sets that I go after are already priced at a price where I’m going to make a profit off of them so if they don’t budge on the asking price I’m still okay.
Philip Taylor: Okay. Awesome. Before we start talking about the pickup and all that stuff, let’s back up a little bit. I’m assuming that early on you were searching the current Craigslist feed in terms of searching for washers and dryers in the top 20 or so to find deals there. Obviously you’ve probably got a system now where you have some type of alert system to tell you when something new is posted. Maybe you can talk about how that’s developed over time? How do you find these deals so quickly?
LaJaun Stoxtill-Diggs: It’s funny because I did an interview not too long ago where a gentleman was asking the same question about if I had some sort of alert system. He actually informed me that there is an app on Mac, PC and on Android phones that refreshes Craigslist for you. But I started so long ago, before I even had a Smartphone, that I’m pretty much ‘old school’ and stuck in my ways so I just sit at the computer on my phone and every 10 minutes or so I’m just updating. There are apps that you can actually install that refresh every 2 minutes, every 5 minutes, but it takes 12 to 15 minutes for the new postings to show up on Craigslist. So that’s what I’m doing about every 15 minutes when I’m on Craigslist— I just refresh to see what else is on there.
Philip Taylor: Do you do any sort of special search or is it just washers and dryers for your local area there?
LaJaun Stoxtill-Diggs: I go to the appliance section because sometimes Craigslist updates it differently. A washer and dryer that someone posts may show up under the appliance section before it shows up under the keyword. You can go in and type in the keyword ‘washer’ and it’ll pull up all of the washers or dryers— whatever has that keyword in it. Where it may take 5 minutes to show up under the keyword, it may only take 3 minutes to show up under the appliance section. So I’m going back and forth trying to see what’s new. Washers and dryers are where I initially started out at and they make the most profit for me, but that allowed me to also go into other areas with furniture and cars. Right now I’m on a ‘car kick’ where I’m going to auctions every week, looking at cars, purchasing them, cleaning them up and putting them back on Craigslist. My hustle is not only washers and dryers, but washers and dryers make the most money from what I’ve found.
Philip Taylor: Yeah, yeah. And a washer and dryer can fit into the back of your truck right?
LaJaun Stoxtill-Diggs: It does. I have a Chevy Trailblazer and I found out the hard way that I could fit 3 individual sets (units) into the back of that truck. Man, I’m telling you, it paid for itself in the first month. When people see that they say, “Why don’t you buy a truck?” But I don’t need one. In my SUV, I let those seats down and just slide those babies right in there. I’ve even got a YouTube video actually showing how I fit them in there because when I pull up, the first thing people as is, “Where are you going to put them?” Then I say, “If I can fit them, will you give them to me free?” Of course, they always say no, but they absolutely fit back there.
Philip Taylor: (Laughs). Always hustling, I like that.
LaJaun Stoxtill-Diggs: Always hustling, yes sir!
Philip Taylor: That’s great man. That’s interesting how you’re finding the deals and how that’s led you to some other opportunities as well. I definitely want to talk to you about that. But, sticking with washers and dryers, you go to the house, you’ve got your SUV there— it sounds as though you do some more negotiation if you can there at the last minute. Can you get these things in your truck by yourself?
LaJaun Stoxtill-Diggs: I can. And that’s what’s so good about the SUV. It doesn’t stand as high off the ground as a regular truck with a truck bed. I’m actually just able to bend at the knees, lift and slide it right on into the bed. I had a buddy of mine who wanted to get in on the action as well so he actually went out and rented a truck. I would send him leads and he went out himself trying to pick up the washers and dryers, but it was an absolute headache because he couldn’t lift them up high enough to get them into the truck. With my SUV, it’s just a simple bend and lift and it slides right in with no problem.
Philip Taylor: Okay. One question I had was, I was down in Houston with my mother-in-law and we were moving her when we realized we were switching her from gas dryer situation to an electric dryer situation so we had to get rid of the gas dryer pretty quickly. We listed it on Craigslist… I don’t know if she sold it yet, but I just wonder if you look for individual washers and/or dryers, or do you only look for sets?
LaJaun Stoxtill-Diggs: I try to only look for sets but I do purchase individual items too. What I do is actually hold those items— sit on them. Believe it or not, you can actually find the matching washer or dryer within a week or so. I’ve found where you can actually find someone selling the same dryer that goes with the washer you already have in your garage and just sell them as a pair.
Philip Taylor: Ah, that’s slick. So you buy sets. Let’s say you’ve loaded up three during the day and brought them home. You’ve got your time and expense there but then you’ve also got this sort of ‘waiting period’ to sell them. So where do you put all of these washers and dryers when you have them? And how many would you have a one time?
LaJaun Stoxtill-Diggs: I put them in my garage. Usually what I do is take one day to buy and one day to sell because with washers and dryers I rarely sit on a set longer than two days. They usually sell within the first day, literally. Like I said, I’ve mastered the art of negotiating the price point as well as knowing how much to sell them for. I’ve had as many as six sets in my garage at one time and I’ve moved them all within a day and a half. I’ve got a two-car garage that, of course, my cars don’t ever get to see (laughs) but that’s where I put them.
Philip Taylor: That’s awesome. Can you talk about the selling process? Do you do anything special in terms of the listing? Because theoretically, this set just came off of Craigslist for maybe $100 and now you’re going to list it back on there for $350 which seems absurd. I know you’re adding a lot of value in terms of presenting a better offer, maybe marketing it in a better way, but tell me about the actual selling process and how that works.
LaJaun Stoxtill-Diggs: The way the selling process works is, I usually get the story of why the set is being sold. Take for instance, someone is moving and they’re selling the set. That’s the reason they’re selling it. So, I buy it from them. When I go to post it back on Craigslist, the main thing that I put on there is, “individual moving.” When people call me and ask if I owned the set, I say, “No, I didn’t own the set myself. I got it from an individual who is moving.” The main thing that I tell people is that if it doesn’t work the way that you think it should, bring it back to me because I’m doing business out of my house and I don’t want to do bad business. Out of the numerous amounts of sets that I’ve had, I’ve only had two units ever come back to me. The first thing I did was go on Craigslist and find a service manager to fix them and put them right back on Craigslist. So, the story people tell me why they’re selling them to me is the same story that I give to the person I’m selling them to as well.
Philip Taylor: I like that guarantee. I’ve learned to do that with Craigslist as well with certain items I’m selling. It gives people a little bit more comfort because with Craigslist you’re handing your money over to someone and you kind of just feel like… Well, that’s the end of the transaction, but I would just like to say, “Hey, if it doesn’t work out, just bring it back and…”
LaJaun Stoxtill-Diggs: Right.
Philip Taylor: That’s a good policy and it sounds like it’s paid off for you. It gives people more comfort and allows them to feel confident about making the purchase even at that price which is— even though it’s higher than you purchased it for, it’s still much lower than if they were to go down to Sears and pay for it.
LaJaun Stoxtill-Diggs: Sure.
Philip Taylor: Has anyone ever contacted you to say you shouldn’t be doing this? Or this isn’t fair or right what you’re doing? Any conflicts of that nature?
LaJaun Stoxtill-Diggs: Not at all. Actually, I go online and see other individuals I’ve sold sets to that are doing the same thing that I’m doing. Some of them have been totally dishonest saying things like, “I’ve had this set for five years,” and this and that and I’ve reached out to them to tell them they don’t have to lie about it because the set’s going to sell on its own and you don’t have to make up stories about it. Other than that, no. Even with my YouTube videos, I go through and look at the thumbs-up and thumbs down. I have no thumbs-down on my videos. People email me to thank me for the information I’m sharing. So for the most part everybody is pretty open and acceptable to it.
Philip Taylor: That’s great. How many of those would you do a week back in 2006 when you were laid off?
LaJaun Stoxtill-Diggs: I would do a minimum of about four a week, trying to get as many of them as I could. I sold anywhere from four to six or seven a week.
Philip Taylor: Okay.
LaJaun Stoxtill-Diggs: Like I said, with four, that left me pretty comfortable.
Philip Taylor: And what was your average turnaround on the sales?
LaJaun Stoxtill-Diggs: I would usually buy a set for no more than about $150 and sell it at a minimum of $300. So, easily, I would double my money at a minimum.
Philip Taylor: So you were basically walking away with a minimum of at least $600 a week. Minus your gas, you’re making maybe $500 week doing that?
LaJaun Stoxtill-Diggs: Right.
Philip Taylor: That’s an awesome extra amount of cash to help your family while you’re going through a bad situation. Were you able to kind of keep that up as you took on the realtor work?
LaJaun Stoxtill-Diggs: I was, because with the realtor work being sort of hit and miss during the times of the mortgage crisis, one thing that I did was reach out to the individuals who were selling the homes or other realtors saying, “Hey, if you know anyone that has a washer and dryer, I’ll come and get it.” That actually works out pretty good because a lot of realtors don’t know what to do with these sets. They may have a set that a client is just giving away and through word-of-mouth it spreads. For instance, at my sons school people are always asking, “Do I have a set?” Or, “Do you want this particular set? If so, then come and get it.” That’s where I actually made my money between closings was with washers and dryers on Craigslist.
Philip Taylor: That’s great. That’s awesome. Then you say, “I’m having fun doing this and I want to share these ideas with everyone else.” So, when did you start the website? And maybe you can talk a little bit about the choice to write the book. Share with me how you went from someone doing these hustles to someone wanting to share the concept of these hustles with the world.
LaJaun Stoxtill-Diggs: I never really wanted to share but people were so amazed at how I would go an purchase a washer and dryer at 8:00 in the morning and have it sold by 12:00 in the afternoon with a $200 or $300 profit. They’d ask me how I would do it and said I should write a book. Now, I didn’t get into it to write a book. But the more and more I saw that my services were needed and that other people were going through some of the same things that I went through, I took a good look at it. Around three to four years into my hustle is when I started writing the book. I’d write maybe a paragraph a night, a chapter a week at the most. It took probably about 6 months before I actually got it all together. Just a little 35-page eBook took 6 months because my focus was on making money and helping my family, but I still wanted to write the book at the same time. The book actually came first. The website didn’t come until this year in 2013 with the release of my new revision of the book, The Craigslist Hustle.
Philip Taylor: Gotcha. When you released the eBook, how did you get in people’s hands?
LaJaun Stoxtill-Diggs: With the eBook I went to Amazon which is really big with eBooks and things of that nature. I went on Google and searched how to format the book the right way and how to market it. But for the most part I just put it on Amazon. I guess people would just do key searches because I wasn’t marketing the book back then like I am now. People would find it. I’d I’d get random emails and that would encourage me even more. I’d get emails from Canada and other countries from people asking for tips and pointers and that allowed me to go back and refocus and market even more. But mainly, Amazon helped me out a lot in the initial stage.
Philip Taylor: Yeah, this was when it was getting exciting, right? You’re touching people’s lives that are countries away. That’s really cool. And potentially making some money. Did the book start selling initially or…
LaJaun Stoxtill-Diggs: Initially it didn’t sell like I wanted it to because I got out of it what I put into it. But like I said, I marketed the book more now than I did in those earlier years. Recently though, it’s just really taken off and I’m super excited about it.
Philip Taylor: That’s good. So when you say it’s taken off, can you share with us what sort of sales you’re doing on weekly basis with the book?
LaJaun Stoxtill-Diggs: On a weekly basis on Amazon, I would say close to $30 to $50 on average. That’s pretty good for just the eBook alone. I had a marketing opportunity about three weeks ago where I lowered the price and I did around 450 in sales in about a three day period, so that was really good for me. The book reached to about number two on Amazon’s entrepreneurial books so I was excited about it.
Philip Taylor: That’s awesome! Where did you learn to do all that?
LaJaun Stoxtill-Diggs: Growing up in Nashville, everybody wants to be a music artist. Back in my early years, of course I wanted to be a music artist too so I learned the art of making an album, marketing and promoting it and things of that nature. I took the same mindset with the eBook. I did a lot of Google research, just a lot of research to see how other authors became successful. I implemented some of the things they did and put it into my Amazon book as well.
Philip Taylor: That’s great. It sounds like you have a special story and something of high value to give to people at a low price. I think it’s priced at $5.99 on Amazon, right?
LaJaun Stoxtill-Diggs: The 2013 edition is, yes. And I believe my older 2011 version is $3.99.
Philip Taylor: Yeah, yeah. So someone can spend $3.99 or $5.99 and within a week turn around and make at least $100 off of a deal with your knowledge. That’s awesome. Congrats on the sales. I hope that continues. I imagine it will especially if you do, like you said, more marketing outreach. You have the website now and you’re doing things like getting on the best-seller list and things like that. I’m sure the eBook is going to continue to perform well for you. The one thing that I wanted to mention was that I think it’s good that you shared. I think you were safe to share your idea in that you couldn’t be everywhere. You couldn’t do washers and dryers in Dallas. You can only do it in Nashville and that area right there. There’s no way to really get beyond that area so it’s sort of safe to share this information because you knew the likelihood of someone in your backyard picking up this and becoming a real strong competitor for you was probably pretty low. At the end of the day it’s hard work still. It’s not like it’s super-easy money. It’s a legitimate way to make money and it makes good money, but you’ve got to learn how to sell and buy and you’ve got to go and pick the thing up.
LaJaun Stoxtill-Diggs: (Laughs.) Especially when you have to bring it down three flights of stairs by yourself.
Philip Taylor: Right, right. So that takes a lot of people out of the opportunity to do this anyway. But I like the fact that it’s honest work and it’s real money that a guy like you or me can make on the side. You know, like if something were to happen like we were laid off or find ourselves in a negative financial situation. How has this changed things for you financially with your family? I know you’re a realtor now so you probably do a lot more of your income through that area, but maybe you can talk about how this has changed your life financially and where you see this going.
LaJaun Stoxtill-Diggs: Well, even with me being a realtor it just became so addictive— hustling on Craigslist. Every opportunity I got, whether it was at midnight or 6:00 in the morning, I was on Craigslist. I’m always looking for a deal because I know that’s extra gas money, extra money for my boys lunch, extra money for wife to get her hair and nails done. It actually helps out in the interim of my house closings which usually takes about 30 to 45 days since I still need to make money between that time period, so it helps out a lot. It keeps the lights on and food on the table. Believe it or not, without Craigslist I know it would be a little bit more of a struggle as far as making extra income because I can make in one day what most people make in a week with a part-time job. Hustling on Craigslist has helped immensely.
Philip Taylor: That’s great. Have you ever thought about expanding beyond Craigslist? I know there’s a lot of Facebook groups out there now that do this sort of garage sale connection where they’re all kind of buying and selling. Have you ever thought about getting involved with that and using that as an additional outlet?
LaJaun Stoxtill-Diggs: Actually, I haven’t. And only because my main focus was taking care of my household. A lot of people ask me if I’ve ever thought about opening a business and doing it out of a storefront, but I never have because I was not looking to get rich. I was only looking to survive at the time. Even today, the main thing is to keep extra income coming into the household. My focus now is mainly pushing the book even more, so I’m really excited about pushing the book and just helping others start their hustle. If they choose to do things of that nature, then I’m all for it. But for me personally, not at all.
Philip Taylor: Okay. Maybe you can talk to us about how you balance all of this with family time and work as a realtor. How have you been able to do that?
LaJaun Stoxtill-Diggs: The main thing is just knowing everybody’s schedule. Me and my kids usually get up at about 5:45 in the morning. Once I get them off to school I’ve got a little bit of time between 8:00 and 12:00 so that’s when I’m usually on Craigslist. Then later on I’m getting them to their school functions and things of that nature so I’m back around 10:00 or 11:00 looking again. It’s just a matter of me knowing my family schedule. And my wife— the thing about her is that she actually supports me because she’s seen that it works. I’ve come up with all kinds of crazy ideas while being married these past 13 years. With some of the stuff she would look at me and say, “Uh, okay. I don’t think that’s going to work.” But with Craigslist, if I tell her I’m about to go pick up a washer and dryer, she actually knows that’s money coming into the house so she doesn’t mind it at all. It works, it works. It actually works.
Philip Taylor: That’s great. Before we wrap up, talk to me about maybe some of the mistakes you made along the way that people could look out for if they’re going to try to do this themselves.
LaJaun Stoxtill-Diggs: The main thing is, wasting time, wasting gas money. Going and trying to see every washer and dryer or every couch that was on Craigslist. Another this is, never go see a washer or dryer that doesn’t have pictures. That’s where I made a lot of mistakes when I first started out. People would just put, “Washer and dryer. Two years old. Must sell now.” And so I got super excited… “Hey, a two-year-old washer and dryer. I’ve got to go see it!” By the time you get there, you find out it’s a 20-year-old set and it’s not what they said it was. I wasted a lot of time doing that so in my book I talk about that— how to ask key questions about items, how to get pictures upfront. How to tell if someone is hiding anything from you before you purchase the item. So that’s the main thing, just being too anxious in the beginning and going when I should have stayed.
Philip Taylor: Right. What about any successes along the way. Any things that you feel you did early on that really helped to create success for you?
LaJaun Stoxtill-Diggs: Just making good and honest business deals with people to when these items never came back to bite me to where I wasn’t losing money. Like I said, just going with time and patience, and going through trial and error as far as learning how to purchase certain washers and dryers where I could make a profit and not have it come back on me. I tell people, “If it doesn’t work like you think it should, bring it back to me.” Now, I didn’t want them to bring it back to me so I’m very thankful that it rarely happened.
Philip Taylor: All right. So, you mentioned early on in the interview about getting into cars—vehicle sales. Maybe you can share with us what you see for yourself in the future? If you’re going to be using Craigslist different, if you’re going to be using eBay auto sales for that. What do you see for the future in terms of what you’re going to buying or selling on Craigslist?
LaJaun Stoxtill-Diggs: In my book, The Craigslist Hustle, I’ve got a website I use called, auctionzip.com where you’re actually able to type in your zip-code and you can pretty much find any auction within a certain radius. With cars and it being tax season, a lot of people are needing cars and they’re getting their income tax money back so this is a great time to buy cars. I go to auctions or find them on the side of the road. I go to church in a little country town and I’m always seeing cars up and down the main stretch. On Craigslist— there’s no need to put them on eBay because the cars I’m getting are just a couple of thousand dollars and I’m making a couple of thousand in return. People have that type of cash locally where I’m at. Thankfully I’m in a pretty big city so I’m actually able to use Craigslist for everything. I probably use Craigslist 98 percent of the time. With eBay, maybe two percent or something like that. When I’ve held on too long or I’m not able to sell, I put that on eBay.
Philip Taylor: Okay. Do the auctions also have washers and dryers or are they just car auctions?
LaJaun Stoxtill-Diggs: I visit a lot of auctions and a lot of them do have washers and dryers but the think with that is I rarely buy a set that I haven’t seen in use. I mean, they can tell you that they work, but by the time you get it home it’s more of a headache than you can imagine. Then you have to pay a repairman to come and fix it. I look at the set but I don’t care what it looks like on the outside, I’m looking for something that I know has been tested and is working whether it’s a leather couch, TV, iPod, iPad, anything of that nature.
Philip Taylor: Gotcha. Well, good luck on that and good luck on the book. Where can people find out more about you and read your book?
LaJaun Stoxtill-Diggs: They can go to my website which is www.mrcraigslisthustle.com. They can see different YouTube videos I’ve got as well as my book. The book is actually in paperback, The Craigslist Hustle, so I’m really excited about this. Like I said, I started out with a humble eBook, not even looking to get into anything like this. So with it in paperback, my whole family and church family is excited for me. For YouTube, you just go to YouTube and type in ‘the craigslist hustle’ and you’ll see my videos. And of course, for Amazon you just type in the keyword, ‘Craigslist’ on Amazon books and mine should be the first one that pops up.
Philip Taylor: Awesome! Awesome, LeJaun. Well, congrats and thanks so much for being on with me and sharing this unique way to make some part-time money. Best of luck to you in the future.
LaJaun Stoxtill-Diggs: Thank you very much.
The post PTM 031 – How to Make Money on Craigslist Reselling Washers and Dryers with Mr. Craigslist Hustle appeared first on Part-Time Money®.
May 03 2013
Rank #2: PTM 032 – How to Use Kickstarter to Launch a Business with Max Valverde of Morninghead
Today’s podcast features Max Valverde, founder and inventor of Morninghead, the revolutionary cure for bed head.
Max launched Morninghead on Kickstarter.com, the online crowd-funding platform and achieved his goal times six. In this episode, Max shares how he came up with the idea, how he got the product made, and how to use Kickstarter to launch a business.
Listen to the Podcast
Highlights from the interview:
Morninghead’s Kickstarter.com page
0:40 – Finally acting on an entrepreneurial “idea”, and the motivation for creating Morninghead.
3:30 – Ten second audio issue. Sorry.
4:05 – How Morninghead works.
5:40 – Going from idea to physical product.
9:40 – Raising money with the crowd-funding website Kickstarter.com.
12:50 – Using a viral video and Reddit.com to market the video.
16:45 – Ongoing sales and marketing after the “dark space” post-Kickstarter.
18:45 – Dealing with the innuendo.
21:10 – Current orders and revenue goals.
22:30 – Working as a couple on the business and balancing time.
Mentioned in the Interview:
Thank you so much for listening!
View the full transcript. Click show
Philip Taylor: Hi. Welcome to the Part-time Money podcast. My name is Philip Taylor with ptmoney.com. Today I have the privilege of interviewing Max Valverde— is that how you say it Max?
Max Valverde: Yeah.
Philip Taylor: Max is the founder of Morning Head, which is described as a cure for bed head, but I’ll let him describe it further for you. Max still maintains his full-time job, while selling Morning Head online. I know he had a big, successful Kickstarter campaign last year, so I’m looking forward to talking to him about that, about his product and about how he manages all this while keeping a full-time job. So, welcome to the podcast, Max.
Max Valverde: Thank you very much. I’m looking forward to doing it.
Philip Taylor: Awesome. Why did you get started doing this? Why did you want to do something on the side like this?
Max Valverde: I’ve always been entrepreneurial for the past 10 years or so. In college a friend referred me to the book “Rich Dad, Poor Dad,” so I was always about getting assets above expenses. My wife and I have been extra frugal over the last few years. I’ve always had this entrepreneurial gene and always wanted to start something. I had lists of ideas. Finally, last year I decided to act on one of them. I started reviewing some of them and the issue with bed head has always been something that has plagued me. I shower at night typically after mountain biking, rock climbing or working out. The following morning it’s that stressful five seconds of, “Am I taking another shower even though I showered nine hours ago or am I going to wet my hair in the sink and make a mess everywhere?” My wife gets mad because there’s water everywhere. I don’t really like it. There was really no good solution so I pinged a bunch of friends. They were feeling the same kind of pain so I thought, “Hey, I might have some legs.” I developed the product, got my hands on a handful of them and sent them out to friends and had them test them. I did some surveys. Then someone suggested throwing it on Kickstarter. I threw it on Kickstarter and didn’t tell any friends I did that. I filmed the video in about four hours or so just to see. It worked for me and it worked for my friends. Everyone liked it. But it’s such a paradigm shift with respect to personal hygiene. I didn’t know if the world was ready for Morning Head. We threw it up on Kickstarter and threw it on Reddit. It got adopted pretty quickly and a short 30 days later, Morning Head was a thing. It was successfully funded and now it’s a somewhat thriving little entity on the side. My wife will send out orders in the morning and I’ll film a video every other weekend or so. It’s one of those things where I heard someone say one time, “In order to be an entrepreneur you have to put in 80 hours a week, 90 hours a week.” I’m working 40 to 45 hours—at most 50 hours a week in my day job as an engineer. If I’m not willing to put in that extra 30 hours a week at night or on the weekends, then I’m all talk. Another 25 minutes or so… we find time. That’s the long and short of where we are now.
Philip Taylor: I got you. That’s an awesome story. I definitely want to get into the Kickstarter part of that and also the product development part of that, because this is a physical product. I don’t often talk to a lot of people who are into the physical product space. It will be interesting to hear how you actually developed it. Just for clarification, for folks who are listening, what does Morning Head actually do?
Max Valverde: Morning Head looks like a regular shower cap. But on the inside there’s this super absorbent cloth material. What you do is you add a little water to it, put it on your head and your hair is completely wet as if you just got out of the shower. If you want, I can do a quick demonstration here.
Philip Taylor: If we were rolling video, I totally would have you do it.
Max Valverde: It’s a shower cap that has this thing that’s almost like a Sham-Wow material on the inside. It absorbs water in a crazy way. It can hold six or seven times its weight in water. You put the cap on your head, rub it around for a few seconds and all that water gets absorbed into your head. You don’t get water dripping down your neck. It just wets your hair so you’re at the point where you have dried off after the shower. You can style your wet hair however you normally would.
Philip Taylor: Yeah. I can totally relate. We’ve all been there with the towel around our neck trying to throw water on our head or to decide whether to jump back in the shower. I get it. It makes so much sense. When I saw the Kickstarter campaign I thought, “Yes, that is totally a useful product.” And obviously you’re seeing success through that. Now, it’s one thing to say, “This is an idea,” but it’s a different thing to actually have a physical product in your hand. So, how did you take it from that idea to figuring out how to build this thing?
Max Valverde: One day, I decided that I was going to figure this out. I tried with different acrylic hats, like winter hats. I was putting towels inside of baseball caps and just trying all of these different things. Then I started talking with someone in the medical device industry and there was a somewhat similar product being used in a completely different way. What I found is that you never really know until you start talking to people and start asking people. If I had stayed in my own little vacuum and tried to make this completely by myself, it would probably have taken six months and tens of thousands of dollars. Just going out there and talking to people and saying, “Hey, is there a product we can use? Is there a material that already exists?” I don’t want to get into too much depth because I’m somewhat proprietary, but I got in touch with some people who are making shower caps. I got in touch with people who can make this super absorbent material and just started talking with different manufacturers and got a prototype made up. In terms of other product ideas for some of your listeners— I work for a manufacturer as well. A good way to get products made is to know what you’re looking for. If you’re making, for example, a coffee mug that’s for rock climbers that has a little rock-climbing grip on the side of it, you would send a request for a quotation out to a bunch of different manufacturers with a really tight set of specifications. “I’m looking for a coffee mug somewhat similar to the mug in this photo. It needs to have these types of specifications. I would like to have a circular hole cut in this location and these special grips here.” Also, using manufacturing language such as, “Please give us minimum order quantities, volume discounts from 1,000, to 5,000, to 100,000 units.” Make yourself seem bigger than you are. You can oftentimes talk with these big manufacturers and get things made and get a prototype sent out to you— maybe even with no overhead. If you can really show the value and say, “Listen, we know what we’re doing. The demand is there. We just need to partner with a supplier that’s ready to work with us.”
Philip Taylor: Yeah.
Max Valverde: With some of these other ideas I’ve worked on you can get prototypes made up— or at least the raw materials for prototypes made up—for free, essentially. Then you can do a Kickstarter and through your initial dealings with the manufacturer you can figure out exactly what your minimum order quantity is. They can say, “Hey, it’s $10,000 or it’s $50,000 to get this made up. But we’ll make you one for free.” Or, “We’ll make you one for $500. In order to get the volume discounts you need to be profitable. You have to order 10,000.” That will start your Kickstarter crowd-funding number and you can say, “Here’s our one prototype for the Kickstarter video but we need $50,000 to launch this thing.”
Philip Taylor: What was that number they came back to you with?
Max Valverde: For me it wasn’t that much. It was around $1,000.
Philip Taylor: Okay. So you had that and then let’s transition over to Kickstarter. Tell everyone what Kickstarter is and why you chose that.
Max Valverde: Kickstarter is my favorite thing in the whole world now. I absolutely love Kickstarter. Indie Go-Go is another crowd-funding website that’s up-and-coming. What Kickstarter is, is you set a dollar amount. In the case of Morning Head, it was $1,000. It’s the money that you need to do what you want to do with some sort of design product or project. It can have anything to do with design or art. It can be a video you want to make, a movie, a cartoon. It can be a product that you’re designing. You set a dollar amount anywhere from a $1,000 up to a million dollars and say, “I need X-number of dollars to be able to manufacture this—to be able to fulfill this product idea. Will you pre-order this or back this product for any monetary value?” It can be one dollar up to a $5,000 backing. Those backings are technically not purchases.
Philip Taylor: Right.
Max Valverde: They are simply backing. And you can give them whatever you want as a reward. The reward can be a letter saying, “Thank you for that $5,000 backing.” It can be an email. It can be a product, once that product is done. For Morning Head, for $1 to $5 we said we would send you a Morning Head sticker. For $10 dollars that would be a two-pack and that was actually what we ended up having as our purchase price. It was a pre-order. Then there was a five-pack and a fifteen-pack. Those were simply pre-orders. The reason I love Kickstarter is that we didn’t have that inventory yet. We had one or two of these things to film the video with. We hit our goal and then we had these orders. When you work with MasterCard, Visa and you work with payment processing, it’s illegal to sell product when you don’t have inventory. From my understanding of the inter-charge rates of MasterCard and Visa— Kickstarter, because you’re not actually buying something, is a really beautiful thing for the manufacturer— for the up-and-coming startup. For the person who wants to sell the knit beard things. Anyone who wants to start a little thing, start something up on Kickstarter and you really don’t need to drop that $50,000 before you know if it’s a good idea. Not only was it pre-order and these were cool sales for us, it was a way to get the project with zero money.
Philip Taylor: Yeah, and it helped market the product, right?
Max Valverde: Definitely.
Philip Taylor: So, talk about that. Obviously, you can just throw up some text and say, “Here’s our product and here’s a picture of it.” But you did something cool, you put a video up. I think that was appropriate for your product and it was a pretty viral video. It was sort of snarky. And obviously you chose the name Morning Head so you’re going to be able to roll off that and get a lot of attention. Maybe just talk about that and what you did that was special with the marketing— using Kickstarter. And how you went to Reddit and stuff like that.
Max Valverde: What I did is, I did this video in about 4 hours. I knew what the general message was but I wanted to see what had been successful on Kickstarter. I looked at some comparable products. Off the top of my head I remember the 50-dollar Follow Focus was hot then. There was this woman selling “Bio-Chemmies.” They’re these stuffed animals that were based on molecules or something. Those were two similar-priced deals so I looked at those and a handful of others. I really broke them down and wrote down all their scripts in a spreadsheet to see what their intro, middle and end was. It seemed like it was always first-person video. It was always appealing to the Kickstarter community; starting with the problem, talking about the solution and then appealing at the end saying, “We really need your help.” I tried to structure it in that same structure. I got that video made. I added a little bit of humor because I’m a bit of a ham and I have to throw some humor in there. Also, I know from my experience on Reddit— I’ve been on Reddit for three or for years now, so I’m really comfortable with that community and I understand that you have to have a little humor in there to have anything go even semi-viral. I put the video up and didn’t tell any friends or family about it with the exception of my wife. I didn’t want any patronization from friends feeling sorry for me and backing my products. Just put it up on Reddit and appeal to the community. The thing with Reddit is, Redditor’s hate non-Redditor’s or people trying to—
Philip Taylor: Market within.
Max Valverde: Market within them and use them. Yeah. They don’t want to feel used. So I structured the Reddit post like, “Hey guys, I’m one of you. This has been a long time coming so here’s Morning Head and what do you think?” I used the Reddit posts to help kickstart the Kickstart. It was on the sub-Reddit “Gadgets,” or the sub-Reddit “Shut up and Take my Money.” Those happened in the first day or two and that hit it to $1,000 in 24 to 26 hours. Immediately, it had hit its goal. The Reddit posts died off. The Reddit traffic died off. But from there, the Kickstarter community kicked in and I didn’t realize how powerful the Kickstarter community itself would be. After the project was already funded it could be found through Boston or successfully funded products. People were finding it in Kickstart— and then Kickstart took over and took it to where it ended at which was five or six times the goal.
Philip Taylor: Right.
Max Valverde: Yeah. That’s all I did—the video and then posting it to Reddit. I didn’t have to market it much at all.
Philip Taylor: Okay, and that’s— we’re breaking up a little bit, so I’ll let it catch up. Talk about making the transition from the success of Kickstarter. Then into ongoing sales and ongoing marketing of the product. How have you leveraged that? Are you doing more things, or has that been enough to sustain it, and continue to drive it?
Max Valverde: That’s a great question. There is this dark place after Kickstarter ends that I’ve identified with a lot of other Kickstarters. There are a handful of aggregators that are trying to be that light at the end of the tunnel after Kickstarter ends. Orders went from— and this is just ballpark… But after the initial rush of maybe 100 orders in that first couple of days we were getting maybe 10 orders a day while it was on Kickstarter. So, it really fell off. Those companies tried to be that marketplace. None of them are really going crazy. So it will be interesting to see who takes the lead there and who takes over.
Philip Taylor: I got you.
Max Valverde: In the last few months, starting in December, we got pretty lucky with getting it up on TV through some interesting relationships on a television commercial in Phoenix and San Diego. We’ve been running a 30-second spot in Phoenix and San Diego for the last three months, now.
Philip Taylor: Oh, nice. So, you’re spending some money there.
Max Valverde: Funny enough— don’t ask me how I got this deal, but it’s a per-inquiry commission deal. We’re partnered with the broadcast company and they’re getting a large cut of every order.
Philip Taylor: So, this is probably a good time to talk about the name. Obviously, the name would have an appeal to the consumer but then trying to work with a broadcast company like this…was that a turn-off for them? Has that been a roadblock?
Max Valverde: Strangely enough, it hasn’t. I will get an errant email once a month from someone who— I’m not going to speculate on what type of person it is, but someone who thinks that I am hurting the world with the name. My thoughts on the name are that the innuendo is subtle enough that it goes over a lot of people’s heads.
Philip Taylor: Yeah.
Max Valverde: A lot of people don’t even notice it. Then, if you do notice it, then you’re probably not going to be offended by it. I’d say 65 percent of people get the innuendo. Thirty percent of people don’t get it and 5 percent get it and are offended by it. It’s a very small percentage of people that take exception to the name. For example, one of the Kickstarter backers sent a response in saying, “Great product, love it. I use it every day. But don’t cheapen your product with this lowbrow humor.” So, I really have backed off on the innuendo a bit.
Philip Taylor: Right. Would you mind not sharing video, Max, going forward, because I think we’re starting to slow down a little bit.
Max Valverde: Sure.
Philip Taylor: Good stuff so far. We went in and out there a little bit. What are orders at today?
Max Valverde: Today, we’re getting about… Well, it fell off in the last few weeks so I’d say about 5 to 10 orders a day.
Philip Taylor: Okay.
Max Valverde: It’s pretty decent. In January we did about $3,000 revenue. I would love to hit $50,000 revenue in 2013. I’d love to do ten times that so we’ll see. It’s been streaky. We’re probably going to do a marketing spend with Hulu in the next week or two.
Philip Taylor: Oh, nice.
Max Valverde: That should be nice. Still trying to pick out which market to target with that but that would be a full-on, paid deal.
Philip Taylor: Okay.
Max Valverde: I’m excited about that.
Philip Taylor: So, investing some of the profits in there?
Max Valverde: Yeah. We’re putting everything back into it pretty much. Just trying to turn this into a self-sufficient deal and eventually outsource all of the shipping to a fulfillment center. I’m sure my wife is getting a little tired of shipping the orders. She wanted to take part. She wanted to be a big part of it so she’s actually handling all social media and shipping. It’s been a huge help.
Philip Taylor: You just stay at your job then?
Max Valverde: Yeah. Other than an interview here or there the day-to-day is not that— we’re not pushing super hard on it. I’ll push it at night. Maybe look at some advertising opportunities, maybe look at some P.R stuff at night. Other than that, it’s not a super demanding thing. My wife is a night shift nurse so she has a lot of time during the day sometimes. Her putting together 10 orders is not a big deal for her on a daily basis.
Philip Taylor. I got you. That’s awesome. You guys said that you have lived frugally so far. This extra $3,000, that’s revenue but the take-home from this has got to be helping out financially. But like you said, you’re choosing right now, to reinvest?
Max Valverde: Right. We’re reinvesting all of it back in. If we were just to say, “Hey, it is what it is and we’re cool with it now,” that would be nice.
Philip Taylor: Paying your mortgage.
Max Valverde: We’re not at a point yet where we’re happy with sales. Eventually, we’ll get it to a point where we can maybe put it on autopilot and outsource it to a fulfillment center and it’ll be a nice little beast that runs itself.
Philip Taylor: All right. Nice. Now, have you done any research into being able to gauge whether you have a bigger market for it? Or is that just your gut feeling at this point?
Max Valverde: Not really. Honestly, we have no real idea about the future. The thing is, it’s such a different thing than what people are actually doing in the mornings with their hair that it’s not something that’s just a lateral move. It’s almost like a complete 180 from how people are doing their hair. So it’s not going to be an overnight thing. Unless, maybe it gets picked up by… That’s the whole point behind the name— that it gets picked up by Kimmel or Jimmy Fallon or Conan, or someone that might monologue with it or make fun of it or something.
Philip Taylor: Right.
Max Valverde: That could give it a bit of a push. The thing is, it’s a funny, quirky thing. Maybe people will have use for it. It works for me but I just didn’t think that people would really get behind it. We probably have— if I had to estimate, I’d say 2,000 users right now.
Philip Taylor: Okay.
Max Valverde: And we have a full money-back guarantee. We’ve never had one sent back. We really haven’t had anyone complaining about the product’s use. We only had people writing in weekly saying how much it’s changed their mornings. They can’t live without it.
Philip Taylor: Awesome.
Max Valverde: A lot of people in high places. I thought it would be college kids. It’s like, bankers, engineers, investment bankers— all kinds of business professionals using this on a daily basis. It definitely has some legs. It’s just a matter of how we get there.
Philip Taylor: That’s awesome. Well, best of luck to you going forward. I’ve taken up a lot of your time today so I appreciate you talking to me about developing the product and how to work within Kickstarter. We’ve talked a little about marketing going forward. Is there any other thing I forgot to mention or ask about?
Max Valverde: No, I think that’s about it.
Philip Taylor: Okay. So, how can the guys out there get Morning Head?
Max Valverde: You know, the line at the end of our thing: “You asked your girlfriend or wife to give you Morning Head. When she slaps you, just direct her to MorningHead.com.” It’s kind of a tongue-in-cheek name but I always wanted to do a video where we show that— asking for Morning Head. It’s an excuse to see how far you can go with it. Then whenever you get the door slammed in your face, you just direct them to MorningHead.com. Yeah, MorningHead.com is where it’s at. We ship same-day or next-day and via USPS. Depending on where you are in the country, it’s with you within a week.
Philip Taylor: Alright, very good. Well, thanks so much Max, for being on with me. Best of luck in the future, man.
Max Valverde: Thanks, Philip. It’s been a pleasure and I’d like to keep in touch.
The post PTM 032 – How to Use Kickstarter to Launch a Business with Max Valverde of Morninghead appeared first on Part-Time Money®.
May 20 2013
Rank #3: PTM 030 – Going from Free to Paid Business Model with Phil Anderson of BudgetSimple.com
Today’s podcast featured Phil Anderson, creator of BudgetSimple.com, the free online budgeting tool.
Phil wanted a piece of software that would simply help him manage his money. He also had a strong desire to be his on boss. So he used his software development skills to build the tool that he needed. He shared it with the world for free and called it BudgetSimple. He has since moved from a strictly free model to free and paid versions. Phil has been able to leave his job to work full-time on BudgetSimple.
In the interview, Phil shares his motivation for creating the tool, his financial philosophy, how he developed and marketed the tool. Also, Phil and I talk in length about moving from a free to paid model. If you’ve ever wanted to develop your own online software tool I’d highly recommend you listen to this podcast.
Listen to the Podcast
Phil Anderson, creator of BudgetSimple.com
Highlights from the interview:
1:00 – Motivations for creating BudgetSimple
1:45 – Phil’s background
3:20 – Working on BudgetSimple while managing a full-time job; dealing with the launch of Mint.com
6:45 – Users, the initial premium version
7:40 – User feedback drives premium features
8:30 – Making the transition from part-time to full-time
9:30 – How did this affect your finances
11:00 – Phil’s financial philosophy built into BudgetSimple
13:00 – Using .Net and PHP to build the software
14:00 – Why Phil uses contractors for design
15:10 – Getting users through SEO and word-of-mouth
17:20 – Pricing the premium version: BudgetSimple Plus
21:30 – Dealing with the security issues with an online budgeting tool
26:15 – BudgetSimple is saving marriages!
Mentioned in the Interview:
Watch the Google Hangout with Phil Anderson
Thank you so much for listening!
Philip Taylor: Welcome to the podcast. I’m Philip Taylor. This is the Part-time Money podcast. My site is ptmoney.com and today I have with me, Mr. Phil Anderson, founder and creator of Budget Simple. That’s at budgetsimple.com. It’s really cool to talk to a fellow entrepreneur that also has sort of a personal finance element to it. I definitely encourage you to go out and check out that online budgeting tool as well as an app and some other things. Phil, welcome to the podcast.
Phil Anderson: Thanks, glad to be here.
Philip Taylor: I’m excited to talk to you about how you created this product and also about making the transition from doing this on a part-time basis to this now being your fulltime gig. That’s a wonderful success story, congratulations and I look forward to talking to you. The first question I always ask folks is, what really motivated you to start doing this?
Phil Anderson: There are probably two separated motivations. I had a motivation for working for myself and a motivation for creating the product. The motivation for working for myself is essentially because I felt like everyone I ever worked for was stupid, right? And I’d do the job better than anyone else and so the only way I could really prove to myself, if this was the case, was if I worked for myself and obviously I would be the best boss of myself. Separately I always had this interest in personal finance and people always ask me how I got out of debt, things like that, what I used to budgeting, and that’s how I created this product. Those things worked separate initially but they happen to work together in the end to achieve the same goal.
Philip Taylor: Awesome, so what’s your background?
Phil Anderson: My background is pretty varied. It’s mostly been in IT. I actually have a degree in geography and I’ve been a programmer, a systems administrator, a project manager. Above all, I like to consider myself an entrepreneur because I like to do things on the side.
Philip Taylor: When did you start doing that?
Phil Anderson: I created one of the first used car sites on the internet back in 1995. That was ausedcar.com which is actually still around.
Philip Taylor: Usedcars.com?
Phil Anderson: Ausedcars.com. There is an ‘a’ in front of that. I was one month away from getting usedcars.com. You would see a fabulous gold wall behind here because I would be a billionaire. But, ausedcars.com helped pay my college expenses to a large extent. It was number one on Yahoo way back in the day, which means nothing now. It’s just another used car site now. I think I have an entrepreneurial family. My dad and my grandpa both started businesses so it’s kind of always been expected that I would do something for myself.
Philip Taylor: So you sort of always wanted to do your own thing and it sounds like you’ve been trying to do that for a long time but you had to rely on a steady full time job as well. So talk me through the timeframe of starting Budget Simple and the interim— how long you have worked for someone else during that period.
Philip Taylor: That’s a good question and it’s actually quite a long timeframe. I was originally working for the federal government in 2006 when I had this idea for Budget Simple. Actually, a little bit of it came out while I was in Paris—I was on vacation when I thought of this. I came home and just had this idea to make online budget because I couldn’t find anything out there. There were some job script calculators your bank offered and things like that, but there wasn’t anything to budget in the way I budgeted that I found successful, so I decided to throw this online app together. I applied my programming skills and put it up there as free online budget. I didn’t really see any way of making money at the time, as you do on all the data entry manually. Later that same year Mint came out and it was like, “Whoa, this is amazing!” It does all my banking accounts for me—it’s done. They just crushed it, they killed the whole market of budgeting. So, I just let it simmer there, honestly and continued to work on my day job for the next couple of years. I think it was in 2010 that I started looking at the traffic I got since the site was still there. Every now and then I’d get email requests and I was, like, “People are still using this?” I mean, I made it in a couple of months and it’s still was kind of buggy so, maybe there was a demand for this type of software out there. Something that was not really filling the void or maybe something missing from the other things out there. So my first question was, “Is there a way I can make money from this?” Because I’d love to improve the software and make it better but I have to focus my efforts where it’s going to be worth it. Then I added the Budget Simple Plus which is essentially a premium version of Budget Simple. It’s for people that are—it helps people get out of debt. Once you are out of debt you can start building your savings and investments. I wanted to target people that were in the second tier that had already cleared their debt and just wanted to build their savings and keep their finances on track so I targeted features for that group of people. I just put a random price on it. I think when I launched initially, it was $50 a year or $6 a month. My thought was, if anybody pays for this then it’s worthwhile to somebody. Essentially, I turned that on and a couple of people start paying for it. It was really just a trickle at first, but the fact that anyone did was kind of a validation point to me that if it was valuable enough that they would part with their hard earned money, I was willing to put more effort into it. Then people started trickling in and the number of users just started rocketing. In the past two years I focussed more on it— improving it. I think used to get around 1,000 users a year. In 2010, around the time I launched Budget Simple Plus which was mentioned in Women’s Day, now it’s thousands every month. To this day I think it receives 5,000 to 6,000 users every month.
Philip Taylor: Nice! Before you went to Plus you had 1,000 users, right?
Phil Anderson: Yes. A couple of thousand. Maybe 3,000 or 4,000. There was enough to say, “Okay, there’s some people signing up for this,” but wasn’t enough to really get me excited that there was a huge business there.
Philip Taylor: And when you turned on the Plus, only two people took you up on that?
Phil Anderson: Yes, something like that. The first month or two there were only maybe two or three people. Because honestly, in the first version of Plus there weren’t a whole lot of differentiating features. There were some new graphs, some— I actually forget what was in that original one. It was really just some stuff I spent a month working on to try and add some value to see if some users would pay for them. But I removed the ads. At the time there were ads and other things like that.
Philip Taylor: Were you able to use some feedback from those initial free users to help build a Plus version?
Phil Anderson: Yes, exactly. I looked through the support emails I got and a lot of times people were saying, “I’ve been using this for years and I really love that it’s free. Thank you for doing this, but if you could do ‘X’ and ‘Y’ and ‘Z’ then I would really love it.” And I was, like, “Alright, maybe I’ll try ‘Z’,” or I would put some keywords. If it was something really obvious, like there should be a dollar sign, that’s easy. I can throw that in the free one. But, if it was something more complicated like building something that calculates your savings, maybe that’s a Plus version.
Philip Taylor: Nice, I love it. You built what the users wanted. That’s great. And you didn’t invest any more time unless it was going to be something that’s giving your return back. That’s a fantastic strategy. So when did you flip Plus on? What year was that?
Phil Anderson: 2010.
Philip Taylor: And how long before you left the full time job?
Phil Anderson: We’ll say a good two and a half years because I just went fulltime in September 2012, so just this last September.
Philip Taylor: Awesome. What was that like?
Phil Anderson: It was great. I mean, I liked the job where I was working. But again, it was one of those things where I always dreamed of working for myself. I could see the potential in the software just at the rate it was growing, and I noticed that if I spent more time improving it, I got those returns back in terms of people signing up—people paying. I just imagined that if I could spend all day, every day, working on this thing, where could it go from there?
Philip Taylor: Financially, talk about that making that decision. Did you have a lot of savings saved up? Was this going to be replacing 100 percent of your budget? Talk about it from that perspective.
Phil Anderson: Yes, luckily I have always been, I guess, an amateur financial expert because I created software to help get me out of debt and build my savings. I do follow a lot of online blogs that have these different ways of making money and things like that.
Philip Taylor: Who do you follow?
Phil Anderson: I like you, of course!
Philip Taylor: Oh, come on, whatever!
Phil Anderson: Mr. Money Moustache is a good one. Get Rich Simple or whatever— it’s good. I have to look at my feeds. I don’t remember the names of them but I follow a lot of people. There seems to be a common thread a lot these days that people believe in. Certainly one is living lean which has made a big believer in me. I have never bought fancy cars. I still drive a ’99 Honda Civic that has 170,000 miles on it. Building savings, making smart investments and things like that. So over the years I’ve built up more than enough of a cushion that I can feel comfortable doing this. I don’t feel like it’s a huge risk. It’s obviously less than the income I was making in my day job. But, I think the potential is there to be much more than that.
Philip Taylor: Definitely, that’s wonderful. What is your financial philosophy in terms of how you took your personal finance philosophy and applied that in the tool to itself? If you could say that there’s a philosophy that you have that is in effect in the tool, what would you say that is?
Phil Anderson: The core of it is based on monthly budgeting. A lot of people want to focus on pure cash flow. Budget Simple and the philosophy I have really works best if you have a little bit of a buffer so that you are not as focused on cash flow, you are more focused on month-to-month budgeting. The reason I believe in month-to-month is, regardless of when you’re paid, the biggest expenses are almost always on a monthly basis. A lot of people ask, “Can’t I do a weekly budget?” But to me it is impossible to measure your progress because one week you are paying the rent, the next week you are paying utilities and it’s really hard to measure if your spending is increasing or decreasing, so it’s always based on monthly. The key is, it’s important to track everything. One of the big differences between me and Mint— and the reason why a lot of people ask, “Why would I use your software? If I use Mint, it does it automatically,” is because I think tracking manually is the best way to really get a handle on your finances especially when you are budgeting for the first time, because the act of inputting every expenditure really should make you think about every expenditure. Those little $5 or $10 a month things that you forget about will sneak up on you and you won’t really notice too much with an automated tool. When you are inputting it manually, you think about it, “Do I really need that $10 here or do I need that $10 there?” It’s all about really keeping a close eye on your finances.
Philip Taylor: That’s awesome. You have a IT development background, so talk about how you actually built the product. Obviously it was an online version first. Now you’ve got some mobile versions as well. Talk us through those developments.
Phil Anderson: Sure. The first version I used the technology called Dot Net which was kind of used in corporations. It was just what I knew—I could do it quickly, it was something I did. When I rewrote the second version around the time when I was working Plus I switched to PHP. It helped me learn the tool. I was learning a real-world skill regardless of whether I would use it myself or not. The mobile part, which is the big part nowadays—there’s an Android and iPhone out, I did the Android one myself because I can do their apps, and with the iPhone one, I worked with a friend on a contracting basis to develop. The servers and everything else are just things I’ve experienced in the past.
Philip Taylor: Do you have any help in terms of employees or contractors, do you have any help or is it still just you?
Phil Anderson: I do. One of the key things you need to know when you’re working for yourself and running your own business is what you’re not good at. I am reasonably confident with the technical things but something I’m really terrible at is the graphical aspect of things. I guess if you were to ask me to design a webpage and draw a picture it’s going to be stick figures and graphics from 1996. One thing I must entirely outsource is the design. Right now I work with two friends that are working on part time basis to help me with the design part of things. And also I mentioned the iPhone app, that was another one. I knew the learning curve of learning to develop iPhone apps wouldn’t be worth the return I would get. right away so I had a friend develop that as well. Yes, the things I am not good with I definitely contract out.
Philip Taylor: That makes a lot of sense. So in terms of marketing early on, how did you get users? What are some of the newer things that you are doing to get users onto the platform?
Phil Anderson: That’s a good question. I kind of have a good reputation locally as being good at SEO which is search engine optimization. It’s something I accidentally became good at. It’s not that I ever learned to do it. I never do anything shady. My best advice for SEO would be to start a site and leave it there. Of course, optimize the search engine to find the site by what it is about, then leave it there. Like I mentioned, the site I launched in 2006 basically didn’t do anything for two years. I think I have a graph and I can share that, if you look at the user growth it was something like a straight line, a sharp line, a huge line, and then from there it keeps going up exponentially. So the first two years if you look at it, it looks like the site isn’t doing anything so you think, “Why don’t I shut it down?” Luckily it doesn’t cost anything it runs so I left it up. I really don’t have any good marketing features from earlier years because I just kind of put a site out there. I think I shared it with some friends on Facebook maybe, or on Myspace or wherever it was at the time. It just kind of spread from there. Honestly, word-of-mouth marketing is the most powerful marketing I have, because I’ve got a lot of people that find out about it—they love it especially because it’s free. I think maybe they feel guilty for getting something for free so they tell their friends, “Hey there’s this great software that’s out there,” so the word-of-mouth is the largest part. Since I have gone full time, of course, one of the things I want to focus on is the actual marketing, spreading it beyond word-of-mouth. From there I started with the social marketing, so we have a Facebook page, a Twitter account. If I have a Google+ page, I don’t think I use it enough because the return isn’t there just yet. But, spreading it over social networks helps to some extent in addition to contacting barters like yourself, if somebody is interested in what you’re doing. It’s kind of done basically like that.
Philip Taylor: In terms of price point, has the price changed on the Plus over the past couple of years that you’ve been dealing with Plus?
Phil Anderson: It has. It’s actually gone down. The initial price was $50 a year or $6 a month. I started thinking about it and it didn’t feel like a $50 a year product for me. While people were paying for it, I didn’t feel like they were getting the value out of it yet, but one day I still think I want to get it back to that point. I felt like this was more of a $30 product so I asked other users, “What do you think this is worth? What would you be willing to pay?” I got some ranges between $1 a month and $100 a month, they were all over the place. Essentially, the thing that seemed most comfortable was the price point of $30 a year or $4 a month.
Philip Taylor: That’s very reasonable.
Phil Anderson: The way I always tried look at it is, am I providing at least that much value to the person? We’ve had people say that using the tool has saved say $15,000 or something, so the tool to a person like that would be worth $100 a month or something like that. It’s really a combination of understanding how much value they’re getting out of it. I do plan on raising the price of it in the coming years, but I need to add the value into it before I really feel comfortable doing it. Especially because the people using it are trying to get on budget. They’re very price sensitive.
Philip Taylor: Yes, I know what you mean. How many users are there currently right now in the system if you don’t mind me asking?
Phil Anderson: It is 96,000, I believe this week. So it should be around 100,000 by the end of this month.
Philip Taylor: And I think you said, one percent of that is on the Plus side?
Phil Anderson: Right, yes. It’s close to around 1,000 users on Plus now.
Philip Taylor: What is the cycle you find for people staying with the subscription?
Phil Anderson: Well, there is a definite cycle to budgeting which is around January 1st of every year since everyone wants to budget— everyone has a New Year’s resolution for budgeting. So January is essentially our Christmas. That’s the happiest time of year. People tend to start trailing off in March or April. This is the time where I start finding out if the people who signed up on New Year’s are serious in keeping their resolution or whether there was something with software that they didn’t want to stick with. Typically, if someone is a long term user we have them for at least 18 months. If they are a short term user, it’s just a month or two. Usually they realize by the second month whether they are using it or not. But certainly it is a very cyclical trend that the early part of the year has large signups and then it trails off. Sometimes we’ll see another pick up in September. My assumption is that that’s college kids going back to school and trying to understand their finances. The software is also used in couple of schools to teach financial education, so I think that’s another part.
Philip Taylor: So, at only $30 a year, I imagine you get a lot of people in January who just pay the $30, and even if they don’t use it to the rest of the year, you’ve already taken that income in, right?
Phil Anderson: Yes and no. You get a free 30-day trial. I wouldn’t say there are a lot, but there are a couple of people— probably out of ten people that signup, two will decide to cancel from 30-day trial. So everybody has the opportunity of getting out if they are not using it. That’s because I just wanted it to be another service they are using and not another expense that they’ll forget about.
Philip Taylor: If I am going to use Budget Simple I don’t provide any of my real personal information, especially with the free tool. I imagine that was pretty easy to manage when it was just a free tool that you manually uploaded information to yourself. Sort of like a shell—no real security factor issues with it. But, I imagine when you went to the Plus where you started taking payments and it doesn’t have any sort of bank account inter-activity with them… Which I don’t think they do yet, right?
Phil Anderson: What’s that? The Plus doesn’t have any—
Philip Taylor: Does it have any kind of connection with bank accounts or anything?
Phil Anderson: No. The Plus one still involves manual entry. In May I’m launching— I don’t know if I’m putting Plus-Plus, but I’m launching another version where you can actually link your bank accounts. So I guess that answers your question of security since that’s already been developed.
Philip Taylor: Oh, okay. So, maybe talk about the legal and security issues with the first Plus, and then we’ll jump ahead and talk about the next phase.
Philip Taylor: So talk about what’s next for Budget Simple and your entrepreneurial endeavour.
Phil Anderson: Yes. The next thing I’m doing is really just investing back into the site. Right now we’re doing somewhat of a ‘rebrand’ but it’s still going to be Budget Simple. It’s going to have a complete new design that we’re working on now. Along with that, we’re going to have this new mode where you can link your bank account information. What I’ve found from the users over the years is that a lot of people come to the site looking for a budget because that’s what they remember hearing about—hearing their parents talk about when it came to organizing their finances. What they really want to know is, “What do I do with my money? How do I pay off my credit card? How do I build my savings? I have 60,000 in saving, what do I do with it?” The middle class is kind of completely unsure of that question because financial advisors don’t want to work with people in the middle class because there’s not very high margins. And the lower class… Like, if you’re really, really struggling, there are non-profits. But even those just help you get off the bottom rung. My thinking is that people want an automated financial advisor of some sort, so that’s where Budget Simple is going. We are giving you the ability to link your bank accounts. We’ll show you your current budget by looking back at three months of financial data and say, “Here’s what your budget was, where do you want it to go from there?” So, it’s still entirely centered around budgeting, but being able to do it in a more automated fashion and easing the pain of manual entry to some degree.
Philip Taylor: Sounds like you’re fired up about the business again and you’re looking forward to making big strides in the future, so congratulations again.
Phil Anderson: Thanks. It’s exciting, it’s a easy business to get fired up about because when I see the success people have with using the tool—there’s not a single day that goes by that someone doesn’t email saying something has changed their life. I remember I had a quote once from somebody who said it saved their marriage because they used to fight about finances and now don’t. So it saved somebody from divorce.
Philip Taylor: That one you need to put on the testimonial page right there.
Phil Anderson: Exactly. So it’s easy to stay motivated because I know I’m helping people in some way.
Philip Taylor: That’s wonderful. So, are there any other questions I didn’t ask?
Phil Anderson: I don’t think so. But anybody that tries out the tool, I’d be happy to get some feedback to see any way we can improve it. That’s one thing I’m really big about, providing top customer service. You know, I respond everybody within 24 hours. Features implemented are based on how the community feels. They’re needed. One of the things that we are doing right now is adding foreign currency support because there is a fairly big community evidently in Greece, ironically, that uses the software… And in France.
Philip Taylor: Nice, very cool. Congratulations. Now, where can people find out more about Budget Simple and/or connect with you?
Phil Anderson: The best way is to go to budgetsimple.com. If they want to connect with me they can use the contact tab there. Almost all those emails will get to me.
Philip Taylor: Thank you so much Phil, for being on. I am sure people enjoyed the interview and took a lot from it. Thanks so much for sharing, and take care.
Phil Anderson: Thank you Philip.
The post PTM 030 – Going from Free to Paid Business Model with Phil Anderson of BudgetSimple.com appeared first on Part-Time Money®.
Apr 22 2013
Rank #4: Side Hustle Examples and Ideas (Kimberly Palmer of US News) PTM 037
This episode of the podcast features fellow money writer, Kimberly Palmer. She just released a new book, The Economy of You. In this show we talk about her book, her business (Palmer’s Planners), and what she learned from others profiled in the book.
Kimberly is of course the writer at the US News and World Report Alpha Consumer blog. I’m honored to have her on the podcast and get her perspective on a variety of things around the idea of starting your own business or simple money-making venture.
Listen to the Podcast
Highlights from the interview:
- Why did you start your side business, Palmer’s Planners? Why should people start a side business (or make part-time money)?
- What were some of the motivations of the folks featured in the book?
- How did a side gig help your finances and what did you see it do for others?
- Where did you get your idea for a business?
- What can you tell others about coming up with a good idea?
- Tell me about your first sale (i.e. pricing, sales channels, marketing)?
- What should others do before they start selling?
- What mistakes did you make and what mistakes did you see others make in their journey?
- Did you create a business financial system? Form an entity? Do you recommend that?
- What do you tell folks who don’t consider themselves entrepreneurial?
Here’s a previous guest article Kimberly shared with us detailing how she makes money with Etsy: Make Money on Etsy
Watch the Google Hangout with Kimberly Palmer, Author of The Economy of You.
Thank you so much for listening!
View the full transcript. Coming soon! show
The post Side Hustle Examples and Ideas (Kimberly Palmer of US News) PTM 037 appeared first on Part-Time Money®.
May 09 2014
Rank #5: Start a Business with a Friend (Blueprint Proposals) PTM 036
Erin Mavian and Kym Pitlor, two friends with entrepreneurial minds, saw a need in the wedding planning market. It wasn’t in the planning of the wedding itself, but in the actual proposal. Guys needed help creating a memorable event and making it happen, and Mavian and Pitlor had the skills to help them.
So a year ago, they began a part-time business called Blueprint Proposals, a boutique service designed to help their clients propose well.
Erin and Kym were able to take their desire to work together, along with the things they did daily in their 9-5 careers, and employ them to create a business that has the potential to become their full-time jobs in the very near future.
Listen to the Podcast
Highlights from the interview:
Blueprint Proposals is based in New York City.
- How did you get started with Blueprint Proposals?
- What types of services do you provide?
- How did you structure your pricing initially and how has that changed?
- How much money have you made in your first year?
- What kinds of expenses do you have?
- How do you balance your full-time and part-time jobs?
- What insurance and legalities are involved in setting up your business?
- Why do you blog? How else do you market your business?
- What are some mistakes you’ve made along the way?
Watch the Team Up with a Friend to Start a Business Google Hangout
Thank you so much for listening!
View the full transcript. Click show
Philip Taylor: Welcome to the part-time money podcast. My name is Philip Taylor with ptmoney.com. Today I have the special privilege of speaking with Miss Erin Mavian and Kym Pitlor. They’re cofounders of Blueprint Proposal which is a boutique proposal service to help you know how to do a proposal right. So, for people out there who are looking to propose and need some ideas, need some help making it special, they’re your company. Kym and Erin, welcome to the show.
Erin Mavian: Thanks Philip. We should say marriage proposals, not business proposals because people ask us to help them with that and I say, “No, no, no, no. We do marriage proposals.”
Philip Taylor: Good, good. How did you get started doing this?
Erin Mavian: Kym, you want to go ahead? She’s on the phone.
Kym Pitlor: Sure. We’re coming up on our one-year anniversary. We launched in July of 2012. Erin and I have been long-time friends and we’ve always talked about doing some sort of business together and the idea just struck us one day with me being involved in a lot of different planning when it comes to different parts of the wedding. But we saw the lack in this certain area— of making the proposal. After helping out with a lot of friends and such it stands to reason we’d kind of combine our skills, background and expertise which melded really well together and we run with it. And so we’re about a year in the making.
Philip Taylor: Awesome. Can you explain for everyone out there, just what sort of service you provide for people?
Erin Mavian: We specialize as marriage proposal planners, helping our clients in creating personal concepts for marriage proposals. We also help clients who have the idea of what they want to do and what they have in mind. We help them carry out that beautiful proposal. Another service we offer is for clients who may not know how they want to propose and need all the help they can find, and we run the gamut with what we need to do to offer the most interesting, beautiful personal marriage proposal possible.
Phillip Taylor: That’s a really great service. I know when I wanted to propose to my wife, I wanted to do something creative that’s not really clichè, but unique and special to us. I think I pulled it off, but it would’ve been good to have a service like yours. I would’ve considered it. What would you say your ideal client would be?
Kym Pitlor: I think there’s many types of clients, but the most ideal client would be one who came to us with a great idea and just need something to put it into action. We love dreaming up great proposals and thinking of creative ideas that we hope will help people become engaged. It’s really great when a person comes with a personalized story and know what they want to do but just need something to get it off the ground. In that case, we think of ourselves as a concierge service. Oftentimes, people are in need of these services because they are not from New York City and they want to propose here and we like to run everything on the ground so they can enjoy it. We find that all of our clients are ideal because if you’re coming to us for an extent of help, that means you are putting so much time and effort into the experience that you’re an awesome person just doing it.
Phillip Taylor: Maybe give us a flavor of the coolest proposal you have been a part of so far with your service.
Erin Mavian: I’ll go ahead and answer that. We’ve had some really incredible opportunities and people always assume that because we help our clients plan and execute their marriage proposals that we are planning flash mobs, skydiving off the Empire State Building, parades on fifth avenue every week and that’s often not actually the case. Our clients are usually looking for something exclusive or extremely personal. One of the most recent proposals that we did that was incredibly special is that there are certain places in New York that are pretty exclusive, one of them being Gramercy Park. So when it comes to getting to the park you must actually have a key. Having a key requires you to live on the park itself. I think properties begin at around $2.5 million on the park, so not a lot of people actually live there. One of the greatest proposals that we had was a challenge figuring out how to get our client get a key to the park, as it was so important since his fiance had never been able to get in and that’s something that she always dreamed of, so that’s an example that’s interesting. Like Kym said, we are more of a concierge service. We take care of all those details instead of him having to stress out about how on earth he’s going to afford an apartment on the park or find a key.
Phillip Taylor: Making dreams come true. I like it. Can you talk about the price levels that you’re offering and how that’s changed over time and how you set that initially.
Kym Pitlor: Our prices vary on the client because it’s all based on the experience, but our most basic brainstorming package which is just to help someone with ideas and give you a whole personalized thing, it goes along with the timeline, all the events, the vendors to work with and that can start at $250. When we start about the full-scale proposal package, that can start at $1,000. Again, it varies. If you want a private evening or a full weekend event it can range based on the level of services.
Phillip Taylor: Plus all expenses, right?
Kym Pitlor: Exactly. And the vendors that are working with us is because of our multiple vendor relationships that we pass along to you. We have great relationships with not only locations in New York but with florists and designers and jewelers. We can get you everything that day.
Phillip Taylor: Awesome. That’s great. How many of these are you doing a week?
Erin Mavian: That number really ranges. Right now, we are in the beginning of summer and it’s definitely wedding season. Kym and I see business slow down in respect for everyone who is getting married over the next 2-3 months. Generally we’ll be working anywhere between half a dozen to two dozen clients on a monthly or bi-monthly basis.
Phillip Taylor: That’s nice. How long have you been in business?
Kym Pitlor: We are hitting our one year anniversary this July.
Phillip Taylor: Okay, and do you mind sharing what revenue you did last year with this service?
Kym Pitlor: You know, it’s hard to show an exact number because we have changed our pricing structure a lot from our undersold days of inception, but we are proud to say we came up in the green. And sometimes it takes a lot to keep a business up and running. We’ll have a better year after this year to see what our annual revenue will look like.
Phillip Taylor: So you were in the green, that’s what you can give me?
Erin Mavian: We’re not in the red.
Phillip Taylor: That’s good, that’s a good start.
Erin Mavian: It’s a good first year. We’re doing something right.
Phillip Taylor: Okay
Kym Pitlor: We knew it would take a lot to get everything set up and so we took everything slowly and set up in the right way. That was really important especially because we are doing this for our first time so we set some achievable goals, with one of them being initially break even then to move into the grid. We’re proud to say coming up in year one we came into that, so we’re looking forward to year two.
Phillip Taylor: That’s great. What kind of expenses do you have?
Erin Mavian: Overall, the overhead that we carry is fairly limited. In addition to having our website or running emails, keeping track of finances, we have a lawyer, just very basic things like that. But thankfully we’re not manufacturing anything. A lot of the research and development that comes from this is happy hour or trying out a new great restaurant with a friend, so there are definitely added benefits with that. For the most part, we really don’t spend a lot on the business itself. We additionally are incredibly lucky to have such great exposure and press for the company so we haven’t actually had to spend money on advertising. That’s been a really great support system in a way that we’ve been excited and invigorated by what we’re doing because we haven’t had to spend that much money yet.
Kym Pitlor: But at the same time we have been investing our money in our marketing, and that has been a really big part of something that we wanted to do right off. We wanted to brand ourselves. We are thankful for the industry that we’re working, that we have friends and family that is eager to help us, but that was a big part of being as well, just the legality of setting up a company.
Phillip Taylor: Well, it is a nice looking website. I’ve checked it out. Who did that for you?
Kym Pitlor: We have a silent partner as we like to say. My boyfriend also works in the industry. We have friends and family who have given their expertise to get us up and running which has been really fantastic.
Phillip Taylor: It’s a beautiful website. I noticed you guys are also in Daily Candy— and I want to talk about your marketing efforts later but before we get to that, let’s hit on income just a little bit more. When you guys were first talking to me, you said this may be something that you might want to make a full-time business out of one day. How far are you away from the type of revenue that would allow you to do that?
Erin Mavian: Kym and I both spend time looking at 1) the cost of living, being based in New York City, so essentially, with both being put together as far as our business plans, we would like to go over our revenue stream in 24 months. Now that we’re 12 months in, for the next 12 months to come, I’m really going to need to hustle. So putting in a little more time and money into that. Overall, the cost of living split between the both of us in New York would definitely need to allow us to bring in six figures in the next year, so keep that in mind.
Kym Pitlor: I think it’s really important to note that it’s the kind of business that does not have normal hours and Erin and I both have jobs that are typically the 9-5 type jobs. So we do have that luxury of having full-time wages while being able to dedicate ourselves to our current roles and still putting in a full effort, second job and the evening hours that you wish you could be out doing other things but recognize the importance. As Erin said, we live in New York and to live comfortably we need to be going in the right way. We have talked about going out and getting capital to be able to launch but eventually we realized to strengthen our slow growth is really an advantage for us because we’re learning so much and developing so much and we could have long term goals and give a respectable amount of time, but you also recognize the important stage we’re at right now.
Phillip Taylor: You’re helping to support the business, right? And you’re even loving doing it on the side. Sounds like you’re really loving spending those waking hours at night working on this business and perfecting it, right?
Erin Mavian: Yeah. As entrepreneurs, I think what’s really special is that for Kym and I, this feels so natural that the steps that we’re taking, the conversations that we have with our clients and our vendors, it doesn’t actually feel like work. And I know that is one of the greatest things about this business is that you’re actually able to live this sort of experience on a daily basis that you never have those hours of 9-5 if you’re an entrepreneur.
Phillip Taylor: So Erin, is your daytime job in construction? What’s going on behind you there?
Erin Mavian: We’re having a little construction in the hall, sorry about that.
Phillip Taylor: Hopefully they’ll take a lunch break here in a second. I have a few more questions here. We sort of talked about this, taking time to grow, but are there any competitors out there for you?
Kym Pitlor: There are, but that was one of the really intriguing things and was so enticing to start our business here in New York is that there’s no one here in New York City specifically focusing on this. There are other people who are dabbling in it, we like to say, but this is our bread and butter. That was really what we wanted to focus on. We do extend into some other areas, but we realized that we wanted to move forward with this and be the experts, so we wanted that to get a start.
Phillip Taylor: So what about event planning background? I think I mentioned this earlier, but do either of you have event planning backgrounds?
Kym Pitlor: Erin and I come from a really interesting background. I have actually been in the event planning non-profit event planning, and Erin, I’ll let you talk about your background.
Erin Mavian: So I have a background in journalism and media, and I always was working in social intelligence and consumer forecasting and trends. A lot of product development, marketing and things of that sort.
Phillip Taylor: Awesome. Well, that sounds like a good combination.
Kym Pitlor: It really is. The fact that we come from different backgrounds means we can see things from different angles. It’s really complementary beyond the fact that we know each other so well as friends, yet the skills we have from our professional lives went well together and it was really— just fit that we fell into the roles that we currently have when it comes to everything between like answering the phones, licking the envelopes and calling the big wigs to see what connections we can pull at the same time.
Phillip Taylor: So how do you take payment?
Erin Mavian: Through our website. We can take payment online. We use this technology called Stripe. For two people who are not technologically savvy, it’s really easy to set up and the service has really been wonderful to work with.
Phillip Taylor: Yeah, another entrepreneur I talked with a while back is using the same thing. I think I’ve heard of it. That’s really cool— and people can use it. Is it called stripe.com?
Erin Mavian: Yeah, exactly. Stripe.com
Kym Pitlor: And actually it’s really cool to know we used a platform called Squarespace for all of our website and it’s actually integrated with Stripe.
Phillip Taylor: Wow, that’s really cool. Square listings?
Erin Mavian: Squarespace.
Phillip Taylor: And that’s for website listings?
Erin Mavian: Hosting.
Phillip Taylor: Well, that’s nice. So it integrates well. And in terms of legal and business structure, did you guys form a partnership and what’s involved in terms of the legality or insurance of doing this type of service?
Kym Pitlor: Erin and I formed a partnership. That was important to us right away. When we knew we weren’t ready to get things set up. It’ll get much more complicated as more people find out, but for right now it’s just the two of us and we usually work in the evening. Our office is in Brooklyn, so we go often on the weekends to get things done. But otherwise, we are working wherever we can to share responsibilities and to share the company.
Phillip Taylor: Okay, and insurance?
Erin Mavian: We haven’t crossed that bridge yet, have we, Kym?
Kym Pitlor: No, we haven’t because a lot of vendors have insurance through their locations and things like that. It really helped. And what we saw was more important was client contracts and partnership agreements and that’s something that we’re looking at seeing because we are just getting through our first year milestone because we’ve learned a lot from the first year with things we’ve worked with and there’s certain things and stipulations and important things we need to include.
Phillip Taylor: I’m trying to look up the service that I use and I can’t find it right off the bat, but I use a service that allows you to purchase insurance for a very small amount of time because I run a conference, and it’s really cheap insurance, but it gives you a little bit of liability protection for just that two hour window or two-day window, but they’ll help you out there. I’ll send you the link after the show.
Erin Mavian: That would be wonderful. We’re always open to suggestions and great experiences that people have had and services as well.
Phillip Taylor: I noticed you guys have a blog. Why have a blog and, you know, why write articles and not just put yourself out there?
Erin Mavian: A lot of being accompanying and owning a brand is really giving yourself that voice and presence. So aside from us being very successful and aware of what we do it’s something that’s definitely of entertainment value. It definitely gives our clients, our prospective clients, a better understanding of our personalities and who we are, what qualifies us. It’s not a heavy sort of subject, marriage proposals, so we love to share places or suggestions or experiences or stories of other people. It’s a great opportunity for anyone to kind of see that it doesn’t have to be an intimidating, serious sort of experience, that it can be fun and light-hearted and there are people who are out there, like us, who can help you. Kym, is there anything you’d like to add because I know you like that blog.
Kym Pitlor: You touched on it, but definitely it’s a great tool for us to get the word out and just try and spread the word. If you meet people with a blog person to come to your website, it’s a really great tool. Also, so much of Erin’s background with journalism and I do semi-professional writing for some local area blogs and we recognized that we have a voice when it comes to writing and the way to engage our clients who maybe were a little iffy about our services by just the website but now have a chance to see more of our personality on our blog. It’s also made to engage women. Our services mostly go toward men because that’s the cultural norm, but we would love to have women reading our blog and it’s a way to engage women to read about us and hear about us and reading our blog because women love a beautiful story.
Phillip Taylor: So what about any other social media efforts or inbound marketing efforts?
Erin Mavian: Content exchange is really important to us, so being able to share our blog and our voice with others in the same industry are offering. We’ve been really fortunate that every time we do have a piece of media or press written about us, we’re able to share it on Facebook, share it on Twitter, Google+ has been really interesting just learning the basics. I think it’s still finding its own identity but I know from a brand perspective that it’s important to have a presence on every social media platform. Facebook has been a really great opportunity to reach our friends and family and just go from there.
Phillip Taylor: Yeah, I would imagine Facebook would be the way to go. I have a friend in the wedding film industry and you see their videos on there. It certainly has an effect on their ability to reach new clients. So one of the big wins I’m sure, was getting into Daily Candy and other publications. How did you go about getting into Daily Candy and what are the results of that? Have there been any other big wins like that?
Erin Mavian: I was going to talk about our PR for a little bit… but go for it, Kym.
Kym Pitlor: I was just going to say, one of our first goals we set up for ourselves was to use our skills for publicity. We immediately put together began seeking around for a personal contract and just relevant media sources that would be interested. We were really fortunate in our first month and to this very day, to have a lot of positive feedback of people who are interested in the concept as something that they’ve never heard before.
Phillip Taylor: Gotcha. Okay, and Erin?
Erin Mavian: Like Kym said, I also felt how we were connected, so through Help A Reporter Out which has really been a great opportunity as well, and I’ve said Kym and I share a lot of our conversations about who we want to speak with and if we’re going to reach the right audience. Through Help A Reporter Out, we’ve been able to become more selective and really be able to hone in on an audience we want to reach. So that’s been another really great resource for us.
Phillip Taylor: That is a good resource. What about any other successes along the way you’ve had that you can point to? Or any mistakes you would advise others looking down a similar path not to make?
Erin Mavian: As far as mistakes go, I think Kym and I have been really fortunate not to come across anything really major as a red flag. But at the same time, we’ve been struggling with the excitement and hope of achieving our own business. For us, we’ve avoided our mistakes through slow growth. But like I said, it’s a struggle because it’s something that we wanted to do full time. Kym, do you think there’s anything? What has been your favorite part so far other than this Google Hangout, which has been great?
Kym Pitlor: It is awesome. I love the podcast by you and it’s certainly fun for me. The best part of this thing is we do what we love, and it’s a pleasure and honor to work with someone I respect so much. And we work so well together. We haven’t had so many mistakes as we’ve had not getting ahead of ourselves and we have to constantly remind ourselves that it was just less than a year ago [that we got started], and it’s been really great and we don’t want to get ahead of ourselves. I think that’s where a lot of the mistakes could come in so patience is the key. And I’m not a particularly patient person but we’re working on the skills of patience.
Phillip Taylor: Good. Well, I hope you guys get there. And it sounds like you have a good service. Where can people find out more about the blueprint proposal and more about you guys?
Erin Mavian: Sure, you can learn more about us from our website. It’s www.blueprintproposals.com. We’re also on Twitter, so @blueprintpropos. And lastly on Facebook. If you want, you can reach Erin or Kym at blueprintproposals.com our email address. But our website’s the best way to get in touch.
Phillip Taylor: Very cool. Alright, well thank you guys for being on with us today and best of luck with business.
Erin Mavian: Thanks so much, Philip. We really appreciate the time and opportunity.
Kym Pitlor: Thanks so much!
Phillip Taylor: Yeah, thanks. And just to let everyone know who’s listening, this will be available on YouTube as well as the blog at ptmoney.com and we will also transcribe it because I know we had a little bit of technical issues with Kym not able to be on video so we’ll transcribe it and you’ll be able to get that later.
Kym Pitlor: I have to say the last thing to threaten your business is not being able to figure out Google Hangout.
Erin Mavian: Yeah, Phillip, this goes on our to-do list this weekend. We’re figuring out Google Hangout on our next visit this weekend.
Phillip Taylor: Alright, invite me because I need some help too, but enjoy the rest of your evening.
The post Start a Business with a Friend (Blueprint Proposals) PTM 036 appeared first on Part-Time Money®.
Aug 09 2013