This is Part 2 of my new Services Arbitrage free introductory training series. If you have not read Part 1, go do that now – Introducing Services Arbitrage: The Perfect New Business For Non-Experts Looking For A Laptop Lifestyle Income Stream (10-minute read).
Most people don’t know this, but when I was younger my ‘bedroom’ was a small caravan (sometimes called a campervan, RV or motorhome, depending on where in the world you come from).
This picture is a pretty good representation of my setup at the time, with my caravan at the back of my mother’s house (including the overgrown grass)…
The reason why I had to sleep in a caravan was because my mother’s partner had two sons who were about to come live with us. We simply didn’t have enough rooms in the house for all of us, nor enough money to upgrade to a bigger house, so the adults decided a secondhand caravan in the backyard would solve the problem.
I was the eldest of us three boys, so I got offered the caravan first.
I won’t lie, at 14 years old I thought having my own ‘pad’ would be awesome. It came with a key to the door and was separate from the main house, which screamed independence, exactly what a teenager wants.
At first, things were great. As the months went on though, I discovered that my bedroom was incredibly hot in summer (Australian summers are long), cold in winter and not soundproof (everything from cats fighting, to cars racing down nearby streets, neighbors yelling and trains rattling by would wake me up).
On top of this, as I grew taller, what was once a comfortable bedroom, became cramped. I had to carefully navigate my head to avoid bumping into cupboards and shelves, I barely fit in my bed, and I was severely lacking storage space.
By the time I was 18 years old, my caravan was no longer the cool pad I thought it was when I first moved in. On top of the practical comfort issues, I was embarrassed about where I lived. I couldn’t imagine ever bringing a girl back to my room!
I Need To Make Money
I can recall many an evening squished into my caravan sized bed, staring at the low ceiling, thinking about how much I hated the situation I was in and how much I wanted to change it.
Needless to say, the key missing ingredient as I saw it at the time was lack of money.
I daydreamed about having piles of cash and all the things I would change in my life. I’d move out, get a real bedroom, buy nice clothes, a car, cook and eat the food I wanted when I wanted, and be able to invite the ladies back to my place ready to show off how sophisticated I was (hah!).
These thoughts were a catalyst that pushed me towards becoming an entrepreneur. I didn’t want a job, I wanted the kind of money you can earn only if you’re the boss.
The tricky part was figuring out how to start a business and start making money…
7 Years Of Not Having Enough Money
I wish I could tell you that immediately after this desire to make money hit me, I went out and built an amazing business and made a lot of money.
The truth is I was far from ready to achieve these goals. I didn’t know what kind of business to start, I had no skills or experiences or contacts or role models or mentors or any person around me who could at the very least push me in the right direction.
Instead, I did what most of my friends did and went to university.
While my degree itself was mostly a waste of time and money, going to university did change my life in one important way – I received internet access for the first time.
Throughout the four years I spent at university studying and the three more years I continued to go to campus to work casual jobs, I spent time working on my various websites.
Slowly but surely by combining casual job income and money I started making from a website selling Magic: The Gathering game cards, I earned enough to move out of my mother’s house and became an independent young man.
While that was a positive step forward, I never really made much more money than I needed to live. Rent and food ate away at most of my income, and the rest I squirreled away in a savings account with my bank.
The years after graduating from university were especially difficult. My friends had gone on after graduation to take full-time jobs as financial managers or engineers or computer programmers, earning $50,000+ a year salaries.
To me working eight hours a day at a job to make $50,000 a year sounded like a bad deal – I had ambitions to earn much more – yet here I was struggling to break even $25,000 a year from the collection of income streams I had at the time.
The Money Secret Is Revealed
As depressed as I often was during this time, I didn’t give up on my dreams of making more money.
Once I graduated from university I finally had time available to study what I really wanted to study – how to succeed as an entrepreneur and become independently wealthy.
I bought and read books like the One Minute Millionaire, Think And Grow Rich, The Richest Man In Babylon, The E-Myth, and biographies of the entrepreneurs behind companies like Starbucks, Hershey and Cadbury Chocolate, Ebay, Google, Napster, Paypal, Realestate.com.au and many others.
These books made me excited about the potential of my own businesses, yet for many years I still felt lost and confused. My self-esteem was low, I didn’t know what kind of business I could make work and I spent way too much time thinking about my failures rather than building new successes.
However, slowly, book-by-book, my confidence grew. I started to see the patterns and connections. It became apparent that business was not some kind of magical way to make money. It wasn’t something special only available to a select few people who were born lucky or in the right place at the right time.
One day it all just clicked…
The combination of the experience I was having with my small but revenue generating website, and all the books I was reading, led to a sense of certainty that I never felt before.
I knew the secret behind business success and for the first time in a long time, I felt joyful about my prospects. In fact, I felt so confident I started to feel like there really was a secret I had learned, a kind of awareness I had built-up that most people on the planet never get to see because they never look for it hard enough.
Two Missing Ingredients
One of the strongest memories I have from this flashpoint in my life was when a high school friend who had moved to Melbourne was visiting Brisbane. I was still struggling financially, but because I felt like I had cracked the business code, I couldn’t stop rambling on about how I had figured out how people get rich.
Here’s a snippet from our conversation (not word-for-word of course, this was a long time ago!)…
Me: I’m excited, I’ve figured out how to make a lot of money
Friend: Ah-huh, and what exactly is this secret?
Me: Well, you have to create a business that can make money when you’re not working
Friend: And how do you do that?
Me: You tap into leverage using a system that makes money without you being part of that system
Friend: Right… (takes sip from glass, eyes glaze over)
It seemed so simple. The key to big money was leverage and systems.
All the stories I read about businesses that became hugely successful involved two variables –
- A Business Model that tapped into some form of leverage, which could grow using a system that excluded the owner (in other words, a business that could run by itself)
- An Entrepreneur willing to put in the hours during the startup phase to set up that system
At the time I was definitely an entrepreneur willing to put in the hours, but I was putting them into business ideas that didn’t have the kind of leverage I now knew I needed.
Leverage was key, because it meant I could make a good financial return without my own labor increasing. Prior to this, every job, project and business idea I pursued was capped to an hourly wage, the amount of money I could make was limited by how hard I worked and in some cases, the money completely disappeared if I stopped working.
Consequently, I didn’t make much money, which made me feel like a failure. As a result, I acted like I felt – jumping from project to project, still failing to make money, reinforcing this feeling of helplessness, resulting in more random behavior.
It was a cycle, and not a good one.
With Clarity Comes Direction
With my new-found awareness of leverage and systems, I started to make changes…
First of all, I stopped jumping from project to project. I knew this behavior was detrimental to my goal of making more money.
Next, I made the decision to sell my card game website. This project didn’t have the kind of leverage I was looking for, plus I was no longer interested in the product I was selling.
I ended up finding a buyer who took the website off my hands for $13,500, which I immediately put into my savings account. The money wasn’t exactly life-changing, but what did matter was I no longer had to think about the website. I was making mental space for something bigger.
That left me with one focus – to grow my latest project, an online editing service.
This business, called BetterEdit.com, was based on what I now call the ‘Services Arbitrage‘ business model, a structure specifically built with leverage, systems and scale in mind.
My new business could grow without my work increasing because we could hire new editors as demand warranted. The basic idea was also incredibly simple. Although I needed to learn how to position and market my business to bring in customers, I was delivering a straight forward service that only needed a website and email to work.
For more details on what exactly the Services Arbitrage business model is and how you can get real leverage with it, go here (10-minute read):
- Introducing Services Arbitrage: The Perfect New Business For Non-Experts Looking For A Laptop Lifestyle Income Stream
Finally, I Start Making REAL Money
For the next few years I focused 100% on my editing business. I was excited to prove to myself that I did not just conceptually understand the key to making money from a business, but I could make it a practical reality in my life.
Things grew slowly at first. However because I was consistent and focused, thanks to the power of compounding over time, my efforts were rewarded.
By compounding I mean each month I built on my work during the previous month. After the first year we had a handful of customers, some of whom continued to purchase our services the next year. Each year we added new customers, I improved the performance of the website and tested new marketing methods.
After a couple of years of full-time focus on my editing business, I looked back at the financial results and for the first time I had generated over $100,000 in revenue. I realized I could quit the casual jobs I was still working because for the first time in my life, I was supporting myself completely with the proceeds from my business.
In fact, things were good enough that I could complete the final step in my plans. I could become completely free…
Removing Myself From My Business
Thinking back to those days ‘living’ in a caravan, I had two dreams –
- Money: Enough money to break out of my current situation and become the boss of my own life
- No Job: I hated the idea of having to be somewhere for eight hours a day, working for a fixed income
Can you see the conflict here?
I wanted money, yet the most common path to money was a job.
I seemingly wanted the impossible — to earn money without having to work for it!
Thanks to this unconventional thinking, I looked to non-traditional paths to make a living. Becoming an entrepreneur seemed the obvious choice, but that wasn’t a complete solution because entrepreneurs often end up working longer hours than employees.
I wanted to create a business that was a freedom-vehicle. It had to make good money, AND it had to be capable of running without me.
I stumbled around for a good five years, but at last with my editing company built on the Services Arbitrage model I had created something that generated good money.
The final step in the process was actually a lot easier than I thought. By this point my only task to keep the business running was sending emails back and forth between editors and clients, and making sure the money went into my bank or Paypal account.
I was happy with that arrangement until one day on a trip to Sydney. I spent the entire day in and out of internet cafes to make sure jobs were processed correctly and on time. It was stressful and disruptive, interrupting everything I had planned to do in Sydney.
I wasn’t working long hours, but I was still trapped to a role I had to perform to keep the business operating. The crazy thing was the role was incredibly simple, something I could have easily outsourced earlier, yet I had chosen not to because I didn’t want to let go of control.
After the Sydney experience, I was ready.
The timing turned out great as I had a friend who was about to become a mother looking for a stay at home job. I spoke to her about the work, offered her a starting pay rate of $15 an hour, which she accepted.
During the following month I trained her how to handle editing jobs and email customer service. It didn’t take long before she could handle the work without me.
From that point forward there wasn’t much for me to do. I kept an eye on sales to see how much money came in (I really got a kick out of those days where we made a couple of thousand dollars and I did absolutely nothing), occasionally stepped in to handle something only I could handle, but mostly I was free.
Tasting True Freedom
It required a tough seven years, from those frustrated caravan days as an 18-year-old dreaming of making money and living independently, to struggling through university and early projects as an entrepreneur, to finally setting up a business built on sound principles, that delivered a consistent and reliable income stream, without my involvement.
As a 25-year-old I felt I had turned a corner. My editing business continued to bring in consistent income, I was starting to save money to purchase my first property, and because I had learned about and tapped into ideas like leverage and systems, my business was running without me.
All of this experience raised my confidence as an entrepreneur and self-esteem as a man. I didn’t have nearly as many sleepless nights, I didn’t think about jumping to new projects nearly as frequently, and I walked around with a sense of lightness about my future.
Plus of course, I had a lot of spare time!
In fact, it was because of all the spare time that I decided to start this blog, which led me down an entirely new business path in the years to come.
I also did a lot of fun things, like travel overseas, buy new clothes, cook my own meals at home, play tennis, go to movies during the day, visit my mother and father, go on dates with girls (and not be afraid to take them back to my place because I no longer lived in a caravan!), and make friends with other entrepreneurs.
Would You Like To Learn How To Do This Too?
Today I spend a lot of my time coaching and training people how to start online businesses using business models focused on freedom.
This also includes training people how to start Services Arbitrage businesses like my online editing business.
Coming up next, I’m going to break down what it takes to make a Services Arbitrage business work, including key insights I gained from the seven years of running my editing business.
If you have not done so already, make sure you sign up to my free introductory training series so you never miss any of my updates:
Enter your email and I’ll send you links to every free training resource I release, a fantastic starting point for you to learn how to follow in my footsteps.
If you are ready to take things to the next level, you want to follow my step-by-step training and get access to me as your coach, join my membership training community, the Laptop Lifestyle Academy, which includes access to my brand new Services Arbitrage course.
I can’t wait to work with you to grow your own freedom-vehicle online business.
P.S. Part 3 in this free introductory training series is now available – 7 Steps To Launch A Passive Income Business Selling Services Online