I recently spoke with April Maclean and a group of students about sweaty businesses, acquisitions, and what I look for in investment opportunities. This conversation perfectly combined my experience owning and consulting sweaty startups and my current focus on real estate deals, primarily self-storage.
Sweaty Startups as a Launchpoint
The first time I started running a business, a friend and I bought boxes from Home Depot because we saw an opportunity to make some quick cash moving college students. We made $50K our first year and $150K our second year doing the bulk of labor ourselves, from hauling boxes to driving trucks. After our first year, we started to hire employees, and once we got large enough and developed operational prowess, I got the cash to invest in real estate.
If I were starting out again, I would still start a service business to get the ball rolling. There are a ton of businesses I love that are low risk, don’t require cash, and you can trade your time for money. There’s so much opportunity out there if you look up from your computer and think about how you can go out and make a thousand dollars.
Sweaty businesses are great because, frankly, the competition is awful, and that makes things easier for you. Too many entrepreneurs are selfish and want to do something that they have fun with, but passions and hobbies and fun work mean there will be a ton of competition and you’ll be fighting for paper thing margins.
Capitalism doesn’t care what you want to do, it will reward you for adding value to the world. Not many people want to haul junk, mow lawns, or move boxes, but that’s what people need and that’s what few people do incredibly well. At any successful business, the CEO isn’t doing things they love with their time; they’re solving problems, having difficult conversations, hiring, and selling, no matter if the business itself is sweaty or fun.
The Opportunity in Self-Storage
I fell into self-storage and I ran with it, and I would absolutely do it again. Self-storage is an easy business in that there’s little ongoing management needed when you own units that nobody lives in and require little upkeep. I think every entrepreneur should gradually transition from working in hard businesses to easy businesses.
I lived in Boston when I started buying properties in Ithaca, Pittsburgh, and other areas in the northeast. If you want to acquire, make a radius of one to two hours around you and pick up the phone and call owners. They will hang up, they will tell you to f off, they will be mean to you, but life is sales and this is your first step to success.
There’s still money to be made in storage; many people who own commercial real estate are aging, they aren’t tech-savvy, and they can barely write an email well. There are dumb people making really good money in their business, and you can capitalize on that. We’ve had success targeting facilities that are charging below-market rent that allows us to grow revenue from day one, all because the owner hasn’t raised the rent in twenty years. Don’t overcomplicate things, businesses can be very simple. Focus on making the business you’re running the best and most profitable business it can be and you can scale to a very comfortable profit.
Get Out and Go
Too many entrepreneurs are obsessed with TAM and how big a business can be, to me that’s the wrong question. The right question is how much money you need to live the life you want to live. Most people haven’t done the work to figure out what they want to do and how they want to live their life, but that should be step one. Success isn’t achieving a billion-dollar valuation, it’s achieving your life goals.
There are a thousand ways to win in entrepreneurship, and there’s no roadmap to success. You can’t just listen to me or read a few business self-help books and find success, you need to get out and learn from experience. As you get the experience you’ll work less and make more money, but that isn’t until you’ve learned the ropes.
There is so much information overload when it comes to entrepreneurship because reading and listening are easier than doing. No book or podcast is fully applicable to m journey, and it won’t be to yours either. People continuously consume but don’t apply what they’ve learned if they don’t get out there. Making money is hard, it takes time and energy and not fun work, but you can do it by looking up from your computer.
Three Key Takeaways
- Service-based startups still provide massive opportunity and minimal competition to succeed as an entrepreneur
- Too many people overcomplicate businesses, but they can be made simple by focusing on your key priorities
- Reading and listening to other entrepreneurs is great, but you’ll learn the most by gaining experience and applying what you’ve heard from others
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