May 19, 2020
Joe Cochran had a rough start in life, but eventually came out on
top. Through perseverance and a hard struggle, he finally has a
success story. Tune in to hear our chat with Joe and learn about
his process, his early struggles, and why he finally decided to
sell his company. Topics:
- The emotional rollercoaster of being an entrepreneur.
- His early struggles.
- Launching his business with $5000 in credit.
- Sacrifices Joe had to make to keep his business afloat.
- Siphoning vs. reinvesting.
- How he ran his initial campaign.
- Which accounting resources he used on a tight budget.
- His competitive nature and how it drives him.
- Making the decision to sell.
Transcription: Mark: Joe, we've
had the opportunity to work with some pretty amazing entrepreneurs
over the years and I never get tired of hearing about these success
stories, especially for people that have gone through some of the
dark periods of life that come out through the end. And often we
get to be a part of the process when that reclamation, that coming
back from some difficult times in their life comes to a head and
comes to that real big victory point of an incredible exit.
Joe Cochran is one of these stories.
Joe: Yeah, he had his first child two days after
his 17th birthday. I think that changes somebody's life forever. He
didn't quit. He stayed in high school and he says his girlfriend at
the time does his homework, helped him cheat to graduate.
Mark: His girlfriend helped him cheat?
Joe: Doing his homework, yeah, she did his
homework. He helped in graduate high school.
Mark:
True love, I love it.
Joe: Yeah, he worked full
time. He just got out and hustled and went through some dark times
after that in terms of business with his father, major debts,
substance abuse, and came out the other end of just fighting and
launched an Amazon business in 2016 when he had about $40,000 in
debt. He thought through it and came out the other side in January
of 2020 with a seven-figure exit. And as he said at the beginning
the podcast interview, he said he felt like an incredible burden
was lifted off his shoulders. So it's a great story; great success
story. A lot of golden nuggets in there throughout the whole
interview that I did with him and just one of these inspiring
people that you just got to listen to the whole thing.
Joe
V.: Hey, folks.
Joe
Valley, here from Quiet Light Brokerage, and today we've
got another episode of Incredible Exits. This one is with
Joe Cochran. Joe and I've been working together
for I think I want to say, a couple of years Joe, in the process of
planning your eventual exit or as I like to call it, training. You
came to me as a referral from our good friend Mike Jackness in
EcomCrew and I think you were living in one state when we first
chatted and eventually moved to another. And then I think we closed
the transaction in January of 2020 is that right?
Joe
C.: That's correct.
Joe
V.: All right. Well, welcome to
the Quiet Light Podcast. The first question I have for you;
normally, by the way, I ask people to introduce themselves and give
a little background but I want to actually just know how you felt
when you finally closed this transaction. I shouldn't say finally
because you weren't under LOI by the time we listed it to the time
we sold it was 45, 60 days something like that. How did it feel? I
don't want to know about the money and that kind of zeroes and this
is a seven-figure exit but how did it feel when you finally had the
money hit your account and you knew that this was real and the
transaction was closing and assets were transferred?
Joe
C.: Yeah. So, I mean, that was
kind of a roller coaster, to be honest. I think since I started the
business all through the business to selling the business and even
shortly after selling the business, emotional roller coaster. I
just think as an entrepreneur, it's probably one of the hardest
things to do is manage your own feelings and emotions around your
business and what's going on. I would say the second that I signed
the paperwork, it felt like the weight of the world kind of lifted
off my shoulders because a big part of my why was always to be able
to provide for my family and kind of have a security if you will.
That was something that is always very important to my wife and I
as far as something that we strive for. It’s just having financial
security and things like that so it was definitely that
life-changing feeling. But shortly after, other fears and worries
crept in. It was short-lived, but it did feel great.
Joe
V.: Yeah, life of an entrepreneur,
it's not necessarily just because you sold the business and you've
got some money in the bank that you don't stressing about other
things. It is what it is. So your big why was to be able to provide
for your family; we didn't talk about this. You haven't given me
permission and cut if we have to but your story is interesting. You
ended up becoming a dad while in high school if I recall correctly.
Is that right?
Joe C.:
Yeah, I got my high school sweetheart pregnant when I was 16 and
had my son a couple of days after my 17th birthday.
Joe
V.: Wow. And you finished high
school, kept working, provided for your newborn family at the age
of 17. You were working and going high school at the same time,
right?
Joe C.: Yeah. I
basically cheated my way through high school at that point because
I was working 30 to 40 hours a week going to school as little as
possible. My girlfriend at the time was doing my homework for me,
helping me through. And it was important to my family that I
finished school and it wasn't as important to me that I do, but
just felt like I needed to finish that. That was my junior year
when my son was born.
Joe
V.: How many years ago was that,
Joe?
Joe C.: Well, I was
17 when he was born. I'm 41 now.
Joe
V.: Okay.
Joe
C.: I don’t try to do math in
public.
Joe V.: When I do
I usually get around but I would say 23, 24 years-ish.
Joe
C.: Yeah.
Joe
V.: So you went from…
Joe
C.: It’s a bit easier this way,
how old is my son? He's 24.
Joe
V.: I was hoping you were going to
just go there. Yeah. We’re doing math instead. So you’ve gone from
a situation that is the worst fear of parents that you're becoming
a dad a couple of days after your 17th birthday to 23, 24 years
later, you're having a seven-figure exit of your own business. The
weight of the world lifted off your shoulders. You're able to
provide for your family, which is very, very important; a great
success story. Let's talk about your path to it. I'm going to
shorten it a little bit because we just talked about that and I
know that you went to work into sales and eventually with your dad
in the hot tub parts business, pool parts business, and eventually
exited that. But then you started this brand that you built
primarily as an Amazon business. Talk about how you came up with
the idea of selling on Amazon and building your brand and what that
path was like a little bit.
Joe
C.: So when I was working for my
dad, we started to get into the Amazon business model in his
business probably around 2009, 2010. Somewhere in there we dabbled,
didn't really jump into it seriously until closer to the end of
that business cycle. But we had kind of been playing with ideas. We
started our own brand at one point in the fireplace and arts niche.
And so I had some experience there, but I just wasn't ever
passionate about any of the products my dad and I were selling. I
was passionate about business. I was just a student of business. I
studied all the time at marketing, sales, e-commerce in general and
so when I realized that he was going to sell the business and I was
essentially going to be out of work and need to define and figure
out an income, I started really focusing on what kind of business
would be right for me? If I was going to start my own thing what
would be the best model? How can I get into it inexpensive, because
I didn't have much money, matter of fact I have a pile of debt. And
it just ticked all the boxes for being I want to work from home,
start small and scale and potentially exit in a large exit. So I
wanted kind of all those things; I needed all of those things and
it just ticked all the boxes for me.
Joe
V.: And you're 41 now, how old
were you when you started the business? I'm going to make you do
math again.
Joe C.: So I
started a business in 2016 so it's been like four years ago.
Joe V.: Four years ago.
Okay, and how much money did you have when you launched the
business in terms of cash? I know that you had a pile of debt at
the time, but how much money did you pull together to make your
first order?
Joe C.: So I
had about $5,000 on credit card that was available.
Joe
V.: You did it with $5,000, you
had a pile of debt and you took $5,000 on a credit card to launch
this business and four years later, you got a seven-figure exit. Am
I doing this right?
Joe
C.: Yeah.
Joe
V.: Wow, incredible.
Joe
C.: I've had about $40,000 in debt
personally. We have just started making progress with paying off
credit cards and stuff because we started doing Air B&B and
kind of renting out bedrooms in a house that we were renting. And
so by doing that, we had started to make some progress in paying
off our debt and like any good entrepreneur person as soon as I saw
the light at the end of the tunnel I decided I’d took on more debt
and started our business.
Joe
V.: Was it a success out of the
gate; did you immediately start selling and say oh boy now I've got
an inventory problem, I’ve got to buy more and keep up?
Joe
C.: Yeah, so I have the; I don't
know what to call it, good luck also good sense that I did develop
a product that really spoke to my target market. That was kind of
easy for me at the time because I was my target market. And so I
simply created the solution that I thought was amazing. When I
showed it to my friends and family, they all kind of agreed that it
was amazing. And so it was kind of like I knew the product was
great and I knew how to create the offer because, again, I was the
target market. So I literally was able to craft a story that really
hit home with my ideal customer. And so when I launched, it was
hockey stick growth. I mean, in the first six months we broke a
million dollars in revenue.
Joe
V.: In the first six months,
incredible. For those listening on audio, we decided not to mention
the brand or the buyer and things of this nature just for
confidentiality purposes. But if you want a hint, go to YouTube and
watch the video or go to I think it's Quiet Light Academy on
YouTube or go to the Quiet Light website ant take a look at our
podcast. There's a hint in the background; a big giant silver one
way back there somewhere in the video at Joe's home office there.
Let's talk about the how; okay, you had hockey puck growth, you
said in the first six months you did a million dollars in revenue
by creating a product that solves your own problem in a niche that
you knew very, very well. How did you get to know and learn about
Amazon; what resources did you utilize to become that person that
knew how to create the right photos or videos or ads and things of
that nature?
Joe C.: I
basically do what I've always done, which is tried to cheat. And at
first, I bought several courses, which kind of worked. Yeah, so the
first course I really bought was the Amazing Selling Machine. And
then for a short time, I decided I was going to create an
information product and I started thinking about doing uninvolved
course on e-commerce because of course, that's what I had
experience in for the previous 12 years. I came across guys like
Andrew Youderian from eComFuel. I came across as Ezra Firestone
from Smart Marketer, and somewhere in there, I think in eComFuel I
was put in a Mastermind with Mike Jackness and a couple of other
guys. And so that was sort of my network and I bought all their
products and I just dug in and followed and studied everything I
could.
Joe V.: So for
those listening a lot of times from the thousands of entrepreneurs
I've talked to that sell physical products in e-commerce, they’re
part of a Mastermind group. And I think it's critically important
that you connect with peers either on the free Facebook groups to
start off with and understand that free means free and the quality
of information that's shared there is not going to be as deep as a
Mastermind group like eCommerceFuel or Ecom Crew or Smart Marketer
or Ezra’s Blue Ribbon Mastermind group but there's a lot of
podcasts that you can listen to as well. Mike, at the time, did he
have Ecom Crew podcast, or is that something new since you met him
in 2016 and connected with him in ECF, which is eComFuel?
Joe C.: Yeah, so that was
new for him. He was starting to work on the project but didn’t have
the podcast yet and it was just kind of an idea in the background
that they’re working on. Mike was still very involved in his
e-commerce business or businesses at the time.
Joe
V.: Okay, cash flow; what I see is
when you've got a hockey puck growth, there's always a cash flow
problem. How did you manage to keep up with the inventory needs,
which is a cash flow drain on the business?
Joe
C.: Yeah. So my first order I
think was $1,500. I placed that order. Well, when I received that
order and launched the product, I did a really dumb thing and went
on vacation to my parent’s house here in Florida, which I now own
and in right now. But so I came here and within the first couple of
days of launch, I could see that I was going to run out of
inventory very quickly. So I placed my second order for $1,500 now
the vacation was five days and that happened on day one when I got
here. So like I literally launched the product day two or day three
after launch I came here. I stayed here for five days and by the
end of that week I had to place a second; a third order. So like I
was here on day one when I realized I was going to have to place
another order and by day five I realized that wasn't going to cover
it and I’m going to have to place another order and I didn't have
any money. The first call to my wife for that first follow up order
was like hey dear I know we just opened this new credit card for
this business and we just spent 1,500 bucks but I think it's going
to work. We need to place another order, send me another 1,500
bucks. And she was like yeah do whatever you think.
Joe
V.: Awesome.
Joe
C.: And I'm behind you, so cool.
So then by Friday when it was time to come home and I realized this
isn't going to be enough, I had to make that call again. And I
said, hey, you know…
Joe
V.: Wait a minute; hold on, for
all those people listening in the audience I want to just ask a
question that they're asking. You're on vacation in Florida without
your wife.
Joe C.: Yeah.
Joe V.: Why?
Joe
C.: Well, it was just to see my
family. My mom and dad were here and we were both working and we’ve
had this kind of Air B&B business at the house. We have two
dogs and it’s just difficult for us to both leave at the same time.
She couldn't get the time off work. I wasn't working at the time.
Essentially I have my own business so it was just yeah say hi to
Mom and Dad, hangout for a few days, go fishing the whole time.
Joe V.: Fair enough.
Joe C.: She wasn't that
into it anyway.
Joe V.:
All right so that third order, what did you do?
Joe
C.: That third order I was like,
hey, the last order is not going to be enough. We’ve got to place
another order and we're going to have to like triple down. We're
going to need to spend like five grand on this next order and we
don't have it. So can you call the credit card company and see if
you can get our limit raised? And she did. And she got it raised to
like 10,000 and so I was able to place that third order; so really
having no money coming back in yet. I mean, we're starting to make
sales. I don't think I ever got my first payout at this point,
though because it’s bi-weekly from Amazon. So I went from 1,500 to
7,000, $8,000 in and now I'm thinking, well, I don't know how I'm
going to place the next order. And so by this point, I had been
communicating a lot with my manufacturer. I placed three orders now
and they could see that my orders were growing and so I just called
them and I said, look I need to place bigger orders but I'm going
to need some sort of terms. I can't operate without terms. You told
me that I had to place a few orders before we could talk about that
and I will say I planted that seed from day one. So I planned on
the product being successful. I didn't just hold and not do
anything. So from the very first interaction with the supplier, I
asked for terms and they said no. And I said, okay, that's fair but
what do I have to do to get terms? And they said, well, you need to
place a few more orders, we need to be comfortable with each other
and I said, perfect, fine, no problem. So it was a natural process
at that point. I placed three orders. Yeah, it was a short period
but I placed three orders. I showed that I was serious and so I
said, look, I'm going to need new terms or I'm going to have to
find another supplier and it really was kind of that. I don't want
to be threatening but it was kind of like hey if you're not going
to give me terms, I'm going to go somewhere else. And so they came
back and gave me 30-day terms.
Joe
V.: So you were able to actually…
Joe C.: Yeah, so it was
kind of ridiculous, actually. What they are giving me was 30-day
terms and I was able to renegotiate and say, yes, 30 days from the
day I received the product.
Joe
V.: That solves a big cash flow
problem right there.
Joe
C.: Huge. Because most places will
give you 30-day terms, but it's from when they shipped the product.
Joe V.: Right.
Joe
C.: So I wanted it from when I
received it. And I wanted it from when I received the product in
full. And I say that because I was doing air shipping so I would
receive shipments in bunches. So I might place one big order and I
might receive 10 shipments over two weeks before I get the complete
order. So I kind of knew that I was working the system a little
bit, but they were happy. I was paying on time and so we were able
to kind of grow using that structure. But it was only about a month
later before we got into another big cash crunch because the size
of the orders were growing, the volume was growing, all the money
was going back and inventory as you know and it was to a point
where 30 days wasn't enough. I needed to buy more than 30 days’
supply to cover everything and it was like round two of the next
challenge as the business grew…
Joe
V.: How did you solve that? Was it
just living off your wife's paycheck, doing Air B&B, and
scraping dollars together and living a conservative financial life
at home? How did you do it?
Joe
C.: Yeah so I have reached out to
friends and family. I asked for money. Everybody told me no. I
start reaching out to other investors, people that I knew that
would maybe do hard money loans. All of them that agreed, which was
I think, one or two said they’d do it but they wanted 50% of the
business which I wasn't willing to give up any percentage of the
business. And so I just kind of scrambled. I think at one point I
sold my car and we just continued to scrounge and scrape.
Joe V.: I love that. I
love that you sold your car; that you got to do whatever you got to
do to feed the business and feed that cash flow problem. That is
brilliant. How long was it, Joe, before you were able to take any
money out of the business for yourself or did you in that three or
four year period?
Joe C.:
I did and probably looking back, it was one of the biggest mistakes
I made. It was siphoning money from this company versus
reinvesting. I think we could have been talking about a much larger
exit had I reinvested versus taking the money but the bottom line
is I needed the money. And my goal still was the hardest thing. So
hindsight in 2020 that's fine but at the time my goal was financial
security and not to get too far into the story but when my dad sold
his business and when we had to basically move on from there, we
sort of lost everything. We built our dream home. We had all the
toys. Of course like good Americans we had overextended ourselves
as well and gone into a bunch of debt to have all of that stuff.
But when he said he was selling his business, there were no job
opportunities in that area that we lived. We lived at a small
northern Michigan town, there were no jobs, and I knew we were
going to have to move. So we sold the house. We sold everything we
had essentially. We packed up what was left into a moving van and
we moved to Raleigh, North Carolina, without having any clue what
was in Raleigh other than my wife had lined up a job with one of
those suppliers that we had bought from the last business. So we
were sort of starting over, but we had sort of lost everything and
to be completely honest it wasn’t the first time I lost everything.
It was the second time that I completely lost everything and went
into pretty significant debt so it was a big driver for me; it was
to get financially free. And to me at that point, I was also
following a guy named Dave Ramsey, I was following his debt
snowball and so my number one focus was get out of debt. And so I
was pulling money out of the business to pay off cars. I didn't buy
myself another car until I could pay cash for one. I didn't buy a
house until I could a big down payment down because we were renting
at the time. When we bought a house, we bought a five-bedroom house
for me and my wife and we rented out three bedrooms. And so we just
kind of continued that path of doing whatever we have to do and it
was super uncomfortable living with people really sucks and it's
really tough on a marriage. And running a business is tough but you
just keep working and finding your way through it.
Joe
V.: Now I understand why the
feeling; and this is why I ask about how it felt when you sold the
business when it's finally done and you said the weight of the
world was lifted off your shoulder because you've gone into debt,
the wrong way two times and you've got Air B&B to strangers
coming to your house and taking up three bedrooms while trying to
run a business and survive a marriage as well. So congratulations
on fighting through it all and doing whatever it takes to succeed
because that's the bottom line. You know I'm mentoring a couple of
entrepreneurs from a local college now and they're 21 and 22 years
old. And one of the conversations I had recently was that they need
to file for a business and incorporate and one said it's $300 and
they don't actually have the money for that and I’m like suck it
up. Look around your run and sell something. You can scrape
together $300. You're not going to ever become an entrepreneur if
you can't do what you did, which is anything you have to do to
survive and sell your car and credit card loans and whatever it
takes to do it. And you did smart; you had a business that was
already taking off so that's good. I want to talk about two things.
I want to talk about the first few days of how you put together a
launch and how you learned to do that and launched the business but
I also want to talk about your goal. So let's talk about the launch
first. What marketing techniques did you use or put together and
what would you recommend to others in order to put that initial
campaign together? Did you spend money on advertising, did you just
do organic traffic, did you do outside traffic; what did you do?
Joe C.: Yeah. So it wasn't
what I would consider very sophisticated. I was, again, kind of
fortunate that the market that I went into was not highly
competitive. The listings that I was competing against were very
poorly created in Amazon so my listing from day one just crushed
everybody. And it was just before this particular market got a lot
of competition. As a matter of fact, my product is what launched
the competition in this category and now there are thousands of
competitors that are highly optimized and it's very challenging to
get in to. But when I first started it was very easy to beat all of
the competitors in that space. And so all I really did was run ads.
I ran some Facebook ads, but mostly it was just Amazon ads.
Joe V.: Facebook ads to
the Amazon store or to a specific keyword or something like that?
Joe C.: Yeah, mostly
Facebook ads went to my own website. I did have a Shopify store and
I had some Google ads that were going directly to my Amazon page
and I had the Amazon ad platform and Amazon ad platform was the big
driver. The Google ads did a little bit. Number one, what they
really did, though, is they helped the page get a ranking for the
keywords that I was targeting.
Joe
V.: Get ranked on Amazon or in
Google?
Joe C.: In Google.
So after we launched that product, it was maybe two months until
our Amazon listing was the number one listing for our target
keyword.
Joe V.: I got
you.
Joe C.: So there were
strategies like that that I learned so that was conscious. I didn't
do anything super sophisticated with the launch, though. I didn't
have an audience. I didn't build an audience beforehand. All things
that I think are necessities now with the competition being so much
higher than it was then.
Joe
V.: Yeah.
Joe
C.: But yeah, at the time it was
not a super sophisticated launch. Essentially what drove the
revenue was the Amazon ads in their network just going direct to my
page.
Joe V.: And in a not
necessarily highly competitive space at the time; it is now because
you created the niche or the better niche as you will. All right,
let's talk about your goal. You and I, I want to say we first
chatted in 2018 and you were living not in Raleigh at that time,
but you were living on the coast of North Carolina. How important
is it in your opinion for an entrepreneur to learn about again, get
trained on what it takes to sell your business; that exit path, and
to set goals? How important was it for you and how important is it
on the priority list of things to do for entrepreneurs, in your
opinion?
Joe C.: Yeah, so
I think the best time to think about when you're going to sell your
business is the day you start planning to launch a business. And
the second-best time to do that is right now if you haven't done
that. So the earlier you can start the better. And a lot of people,
in the beginning, it's difficult because you have so many other
fears; fears that the business isn't going to be successful, I’m
going to launch it, and I’m going to get traffic and so many other
things in your mind that’s taking up space. It's hard to think
about how I am going to sell this business down the road but you
don't have to put a lot of time in the beginning, you just have to
know that eventually, that's where you want to go. And so when you
know that and if you know how to structure that business for sale
then you're just going to be starting off on a much better place.
So I got the privilege of watching my dad go through a sale and I
did get to listen to him complain about all the things that were
going on with the sale like oh we had to clean up the books. And
that took three months to get the books cleaned before they can
even move forward with the due diligence properly. And there were
so many aspects that were kind of snags for him to actually get
that exit. So I kind of have the benefit of watching what he went
through and realized day one, I need a CPA. I need somebody who's
going to watch this money because I know I'm not organized enough
to do it. So literally, I launched the business within the first
couple of weeks when I saw I was going to be a successful product I
hired a CPA. Could I afford to? Not really but I knew I had to do
and I know I really couldn't afford much.
Joe
V.: What did the CPA do for you?
Because I always say the bookkeeper manages your books on a monthly
basis, the CPA files your taxes. In this situation what did the CPA
do for you?
Joe C.: Yes,
so the CPA did a combination. My wife ended up eventually taking
over the books when she was able to leave her job.
Joe
V.: Did you use QuickBooks or
Xero?
Joe C.: QuickBooks.
Joe V.: Okay.
Joe
C.: Yeah, and we kept pretty
simple. So it was the CPA was more important of just setting up
QuickBooks for me so when they charged the fee it was ridiculously
cheap, really. They charged a fee to just set up QuickBooks and
then once it was set up, my wife could do the bookkeeping. So they
weren't expensive in the beginning. I still couldn't afford them
but it wasn’t expensive. And so I remember like literally at that
time I was like whoa they’re going to charge me 50 bucks a month or
something. I don't know if this is a good idea we can't afford
that. We have to go elsewhere when I say we can’t afford it. That
was my mindset, my frame of mind. But I was happy I did it. It
helped us get started on the right foot. The QuickBooks was really
pretty clean from day one. The business was not complex anyways so
it was I think a good move. But the more complex you are the more
important that is. And just those small things like planning to be
successful is hard when you're not successful yet. But it
certainly, I think in my case, paid off to start that way. So a CPA
or a bookkeeper or somebody that can help you if you're not good
with it was important. If you’re great with it, you can do it all
yourself. That's fine. But you're going to be doing many other
things you got to figure out where it makes sense to spend your
time.
Joe V.: Yeah, I
think it's really important to do that bookkeeping part because
like you say it snags at the end. If you wake up one day and
decide, okay I'm ready I want to sell my business but you haven't
done your bookkeeping, guess what? You're not ready to sell your
business. You've got to do that bookkeeping and get it done right
in order to exit the business.
Joe
C.: You might be ready to sell but
your business isn't.
Joe
V.: Right. Yeah, so if you've got
a seven-figure business, even if it's six figures, if it's only
$100,000, there's someone out there in the world that has worked
very hard to save $100,000 and they are going to buy your business.
They're not simply going to look at your merchant processing
account or your seller account and say okay, yeah, here's the
money. You really need to have your financials together; vendor
invoices, cost of goods sold, all of this stuff, cost of goods sold
on an accrual basis people, really, really important stuff that has
to be done in order to exit without those snags. You can always
sell, but you're going to be able to sell for more if you do what
you did which is 18, 24 months in advance we started having
conversations. And each time the value kept going up that we had
conversations. Let's talk about that for a minute because I always
say let's reverse engineer your path to success. Set a financial
goal and a happiness goal; happiness goals and setting financial
goals. Thank you, David Wood, for the happiness goal. I think it's
really important. Yours, Joe, was a huge burden off your back that
made you happy and you go fishing now and enjoy it without thinking
about the debt that you had because you don't have any. So
happiness goal, financial goal, and then reverse engineer a path to
that. Sometimes it’s 12 months, sometimes it's 24. You can't do
that successfully without knowing the value of your business today.
You can't do that without having good financials. So it all is
interwoven together. But your financial goal, if I recall, moved.
You set that goal and then you moved that goalpost a little higher
or further down the road. Can you talk about that path? Because you
had I think you said $40,000 in debt when you started this business
and then you took more debt out eventually. Did you pay off your
debt while the business is growing and that's the money maybe you
shouldn’t have taken out because you followed Dave Ramsey's
program, which I think is brilliant too, by the way, and then what
was your mental process for setting that exit financial goal and
once the value of the business was there did we list it or did you
move that goalpost further down the road? I honestly don't recall
the details.
Joe C.: Yeah.
So starting the business, the goal was man this would be cool if I
could pay a car payment or something like that and we got to that
part pretty quickly. And then, of course, again, you move the
goalposts constantly, right? So, man, it’d be cool if we could make
a house payment. And then it became, man, it'd be cool if we could
pay these cars off and pay off our credit cards and boy it’d be
really cool if we could pay off our mortgage and over that first
two-year span, we accomplished that. And so when I started talking
to you, I don't think we can quite pay off our mortgage yet but we
were debt-free otherwise. We were just working on our mortgage and
that is the money that I was pulling out of the business. And so
when I started talking to you and started talking about exit, it
was actually during the time that we had had a big hiccup in the
business, a big stumbling point and I was frustrated and I just
wanted to be done and I didn't know how I was going to do it. But
after speaking with Mike first, he recommended I speak with you.
And so that was kind of our first introduction and you stomped on
my heart. You said you're not ready. Your business is in a very bad
position right now.
Joe
V.: It must have been trending
down at the time.
Joe C.:
It was trending way down. This was essentially right when the mass
competition came on board. I went from having no competitors to one
or two to hundreds. And I’ve come to find out a big part of the
reason for that is that Amazing Selling Machine used my product as
an example in their course.
Joe
V.: Oh wow.
Joe
C.: And I reached out to them and
said, hey, what the hell, guys? You know I'm one of your students,
right? And they were like, oh, we didn't have any idea you were a
student of ours, sorry, we won't do that in future releases but
what's done is done, you know. And so they're like the biggest
Amazon selling training course out there.
Joe
V.: Yeah.
Joe
C.: Literally overnight we just
had hundreds of people copy our product and hit Amazon. And the
business started to tank as far as our revenues it really started
to go down. I was burned out at this point. I was frustrated. And I
was hopeful for whatever reason, I was going to be able to still
sell for some big number. And you were like no, it's not going to
happen. If you sell right now, you're going to give it to somebody.
Joe V.: Yeah.
Joe
C.: What you told me was you'd be
better running it into the ground then you’re just not going to get
what you want for yourself.
Joe
V.: That’s right. Take as much
money out as you can and let it inaudible[00:38:34.4] Yeah,
those are hard conversations when I'm telling you that, being
relentlessly honest as we say at Quiet Light and not tell you what
you want to hear.
Joe C.:
But you know what if someone was my, I guess, drive that was what I
needed to hear because I realized again if I wanted to hit my goals
of having that financial security, I couldn’t just give up. And so
that turned me around. That turned me from being down and being
depressed to being pissed off and realizing you know what, you've
gotten this far, you can beat these guys that are just starting and
you've got two years off. Figure it out, quit worrying about what
everybody else is doing, and figure out how you can win. And so, I
mean, it was literally I think we hung up the phone and that shift
in my mindset happened and I just went right to work on how am I
going to fix this, how am I going to beat these guys? I'm very
competitive. I played hockey my whole life growing up. I’m just
super competitive. So when that shift happened from kind of loser
to, hey figure it out; yeah, we were able to turn it around. And so
it took about six months to get back to that number one position
and back to where the revenue was decent. That took about another
six months before we were where I felt we should be in terms of the
revenue. And to your credit, you reached out every quarter or so to
check in on me and that was always super helpful because it just
reminded me of the goal. And so sometimes it's just so easy to get
caught up in everything that's going on in your business that it
was great to feel like I had some people in my core. Mike was
another one that I could reach out to at any time and he would jump
on a call and talk me off a ledge or give me some input. So having
those resources to be able to reach out to when things aren't going
well is just; I don't know how else to put it, it's just super
valuable. Yeah, so it took about a full year to really; it took six
months to basically turn things around, it took another six months
to gain back what we had lost in sales and get back to where it
felt like we could potentially exit. Then we had another call and
you said okay, good, now you need to run it for another year.
Because I was like oh great, we're back, now we can sell it and
you’re like hey man, you need a trailing 12 months at this level if
you really want to sell it. So you crushed my heart again.
Joe V.: I am sorry about
that.
Joe C.: But the
reality was; no, it's fine because things were good. And so I was
up and I was just like oh yeah okay, fine. I can run it for another
year. Maybe I can even grow it a little bit. So that's what we
really focused on and pushed through. And so you started that
question really with what kind of got you there and what made the
decision to actually sell? And that was literally hitting like the
10 month part period where for 10 months nothing went well. That’s
literally what made me realize we need to list this in because you
told me, hey, you need a trailing 12 months of solid numbers and
then you’re good. At 10 months I was like, holy crap we're two
months away from that. There's nothing in the forefront that makes
me believe that we won't hit that. Let's call Joe. So I reached out
to you and boy, what an interesting time to make that decision,
right? Because look what happened just a few months later.
Joe V.: Yeah, we closed;
we’re recording today on April 13th, 2020 folks and we ended up
listing the business in mid-November, headed under LOI within two
or three weeks, chose to close in January for tax purposes. Good
for you, Joe, because you had moved to Florida, partial tax year
down there, no taxes on state level and then, a grace period of
another 15 months before you had to pay your taxes for the sale.
Yeah, and then COVID hit. So I think in your niche sales probably
went up though but still, the world is incredibly unstable and
maybe better of peace of mind that you sold versus holding on.
There are a lot of folks that waited and now have to wait even
longer to see relatives come back. It's a tough situation all
around.
Joe C.: And you
know it doesn't matter that your business does well in these times
because if you can't get inventory or you can't get inventory on
Amazon, you’re still not making sales so there are so many
challenges. And the other challenge is that I lived with; lived and
breathed every day, day and night I mean, so that decision to sell
was based on a lot of things. But yeah, it was definitely the right
time and it worked out well for me and it gave me the freedom to
now look back and say okay, what did I do, what made that
successful, how can I repeat that in my next business, and how can
I do it even better maybe? For me better means a better lifestyle.
I don't want to do it again and work the way that I worked and
worry the way that I worried before. And surprisingly when you have
some money in the bank, a lot of those worries do go away. A lot of
things do get easier and so now the big thing is make sure you
don't make a big, stupid mistake because you’ve got money to spend
and go about it like a clean start up again and remember what it
takes to do that and then start from that.
Joe
V.: Great advice all around, I
love your story, Joe. What is your next adventure, any clues or
hints that you can give us? Because if anybody out there is in the
audience that might have an interest in it or can contribute to it
in any way maybe they'll reach out.
Joe
C.: Yeah. So what I kind of took
away from my last business is that being passionate about the
products for me is important. Some people are just passionate about
business and so they don't have to really be passionate about the
product so much. In my last business, I was passionate about the
business, but I was also passionate about the product. And even
more importantly, and this is just through self-reflection that I
kind of realized recently I was passionate about my customer and I
was passionate about that customer getting success. And so for me,
it was realizing that it's not just the business, it’s not just the
product, and it's not just the customer. It was kind of a
combination of those three things that I think helped push me
through the hard times. Because there were so many more ups and
downs that we didn't even get into that if you're not passionate
about something within that, you're going to struggle. And for me,
if I wasn't passionate about all three of those things, I might
have faltered. So as you said I'm a fisherman and I'm looking in
that market and seeing where I can contribute my value. And so I
just registered a new trademark last week and we're starting on
working on those offers and seeing where we can beat the
competition.
Joe V.:
Excellent. Well, I look forward to having you back on the podcast
and telling that story of your next exit although you've just
started; you’ve just begun. Thanks for sharing your story, Joe.
It's amazing going from being a dad at the age of 17, 17 in two
days, if you will, to a seven-figure exit 24 years later,
supporting your family and getting a big burden off your back and
living debt-free. Congratulations. It's been a privilege working
with you and an honor to know you. I look forward to getting out of
Florida and maybe go fishing with you someday personally.
Joe C.: Absolutely. Well,
I appreciate all your help as well and I look forward to being
back.
Joe V.: All right
man, talk to you soon.
Resources: Quiet Light Podcast@quietlightbrokerage.com