The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future (30 page)

After Nathalie set up the tech consultancy, she had to go back to the raw foods business and make some changes. The business had always been dependent on new products and launches, and since her focus was now elsewhere, she had to reduce that dependency while ensuring that it would produce income on a more regular basis.

Across the border and a few states away, Brooke Thomas founded New Haven Rolfing, a holistic health practice. The clinic attracts a clearly defined group of clients: people who want to address chronic pain and mobility problems. (No one comes to see Brooke when they’re feeling great.) By the time they arrive at New Haven Rolfing, many have gone through a long list of other treatments that haven’t helped. Brooke is a testimony to the treatment she provides—she became pain-free through Rolfing after twenty-three years, having lived her whole life to that point with problems related to a birth injury.

Before she moved to Connecticut, Brooke operated similar businesses in California and New York. With each move she learned a little more about what to do and what to avoid. Opening the same kind of business in different cities was insightful. After moving to New Haven, she had filled her client list within four weeks, and then she took on a partner to manage additional appointments. A single mother with a young child, Brooke works part-time but still earns more than $70,000 a year from the practice.

Repeated success in different cities involved getting to know other care providers, and Brooke noticed that some were more business-savvy than others. By using her real-world experience, Brooke created Practice Abundance, a training program for other wellness providers. Offering a series of support modules and a community forum, Practice Abundance was a business course that focused strictly on ways to improve a practice. Other resources took a very traditional approach. In Brooke’s words, “they assume that everyone wants to get an MBA, when the reality is that most of them just want to run their practice better.” Brooke had diversified to two groups of people: those she served through individual care, and her fellow caregivers who could benefit from non-MBA business advice.

Both Nathalie and Brooke found a way to reach two different audiences: a core group and a related group. As a business grows and the business owner begins itching for new projects, he or she essentially has two options for self-made franchising:

Either option is valid, and both can be rewarding. For the first option, it may be helpful to think of the “hub-and-spoke” model when building a brand, especially online. In this model, the hub is your main website: often an e-commerce site where something is sold, but it could also be a blog, a community forum, or something else. The hub is a home base with all the content curated by you or your team and ultimately where you hope to drive new visitors, prospects, and customers.

The spokes, also known as
outposts
, are all the other places where you spend your time.
^*
These places could include social networking sites, the comments section of your blog or other blogs, actual meetings or networking events, or something else. You can see how this works in the image below:

The goal for each of the outposts is to support the work of the home base, not usually the outpost itself. It can be a trap to spend too much time with any of the outposts, because things change, some outposts become less popular over time. You also own the content and work you create in the home base, whereas most of what happens in an outpost is “owned” by another company.

One path to franchising yourself is to team up with a trusted partner. This doesn’t mean you completely merge your business with that person; in fact, the easiest and most common way to partner with someone is to create a
joint venture
. In this arrangement, two or more people join forces to collaborate on a single new project. (Karol and Adam’s “fire sale” project, described in
Chapter 8
, is a joint venture.)

In other arrangements, an all-new business is created that is jointly owned by the partners. That’s what Patrick McCrann and Rich Strauss did. They were both high-end performance coaches for athletes and decided to team up to create Endurance Nation, a training program and community for triathletes. They divide responsibilities on the basis of what they’re each good at. Patrick calls all the new members on the phone to welcome them, and Rich crafts an online training plan for them.
^†

However it’s structured, the goal of a partnership is to grow beyond what each person can create on his or her own. Ralf Hildebrandt operates an international professional services firm based in Stuttgart, Germany. Here’s how he explains why 1 + 1 can equal 3: “My rule of thumb is that a successful partnership (or any type of collaboration) should create a combined business which is at least 33 percent larger than the sum of what the two individuals could achieve on their own.

“People are often inclined to think that distributing work to a few others is what partnership is about,” Ralf continued. “But that is just subcontracting. True partnership must create more than just a divided list of tasks.”

Courtesy of Pamela Slim, a coach, author, and expert on partnerships, here’s an abbreviated list of decisions you should make at the beginning of any joint venture:

Check out the One-Page Partnership Agreement for a simple way to spell out basic agreements between two parties.

Jamila Tazewell followed a common path after graduating from art school: She waited tables in New York City while dreaming of something else. Fortunately, waiting on tables was the only waiting she did—she also took action to start a business. She started by making “outlandish handbags” and unique wallets. “I was convinced I would magically become an accessories star overnight,” she says, initially assuming that a fashion house would see her products
and offer to distribute them. “Then I saw I could actually sell my handbags and wallets myself. That’s when I decided to pursue the opportunity further.”

Jamila headed west to Los Angeles to sell her accessories full-time without relying on a waitress job to pay the bills this time. It worked, but only just barely: She did everything herself, and the business struggled to find its feet. She was glad she no longer waited tables, but as with buying someone else’s franchise, Jamila felt like she bought herself a job.

Three years in, Jamila was ready to make a change. She hired a local seamstress to make the product under her supervision, a move she describes as “challenging but necessary.” After that, she brought in someone to do the printing and shipping as well. This was a big step that required “a brutal process of trial and error, but getting the product out of my home office was incredibly liberating. It felt like my child was finally old enough to go off to boarding school or something.”

Interestingly, this perspective is not universally accepted. Several other topics covered in the study resulted in a wave of similar responses. Many members of our group spoke of bootstrapping and limited business plans in the same way, and the connection between freedom and value was a key theme for almost everyone. But there was one topic that resulted in a wave of divergent opinions. That topic was employing contractors or “virtual assistants,” also known as
outsourcing
. On this topic, input ranged from “love it” to “hate it” to “it’s complicated.”