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How To Start A Service Based Business: A Step-By-Step, No-Bullshit, Ultra-Practical Guide

If you want to learn how to start a business that actually makes money you need to understand this: despite what every fake-ass motivational fraud tells you is not easy, in fact, it’s damn hard, that’s why 90% of new businesses fail.

That means on average you’d need to start 10 businesses to hit a winner when most guys don’t even start one. The guys that do usually fail once and end up crawling back to their office job, hat in hand.

Failing in business is not fun and I’m speaking from experience here. I’ve failed in more businesses than my friends have started. I’ve failed at an online Vice magazine clone, I’ve failed at an online fashion magazine, I’ve failed at a tech startup and I’ve failed at Amazon FBA. I’m an expert at failing at business.

In fact outside of trading stocks and corporate sales, the only business success I’ve had is this one and that took three years of posting free content before I made a dime. Making money, online or otherwise, with a product based business is tough. I don’t want you guys do have to go through what I did, that’s why I’m not going to sell you on starting an a product based business.

Instead I’m going to tell you how to build a boring, unsexy business that actually makes money. I know this isn’t what you want to hear. I know everyone and their mom is telling you to build an online, location independent business, earn passive income and live in the sun. I’ll admit, I’ve been guilty of telling you the same thing.

That all changed since I moved to Thailand this year. I live in Chiang Mai, the capital city of the “digital nomad” community and no one makes any money out here. Most guys have no savings, dress like they’re homeless and have just enough income to eek by in a third world country off their poorly executed business.

Dirty Backpackers

And those are just the guys that stay. The average guy comes out here with three months of living expenses to “try and start a business”, fails and has to go back home with his tail between his legs.

Building an online business that generates real passive income in the real world is no fucking joke. Sure I’m doing alright now. I live like a king in Thailand off two ebooks but I’m making mediocre money by western standards. And that’s three and a half years in with 175,000 monthly visitors.

Sure I’ll replace my western six figure income within the next two years but that will have been 6 years into the game. I also have insane dedication, a talent for writing, packaging concepts and exceptional expertise in multiple areas that most guys don’t have. Add to that the experience of four businesses behind me, a decade in corporate America and I’ve got of advantages the average 22 year old guy coming out school is not going to have.

I’m not telling you this to sound like an arrogant asshole, I’m telling you this because I want you to have a business win right out of the gate. I also don’t want you coming out to Thailand on a hope and a prayer trying to start a business, I’ve seen way too much of that this year, it’s clown college out here. That’s ok for other guys but I don’t want that for you.

The truth is, if I hadn’t decided to build a self improvement empire from day one I wouldn’t have started a blog. I don’t even like the word blog. To me a blog is somewhere a teenage girl goes to queef out her feelings. In fact it took me years to admit this even was a blog.

The truth is, a blog is one of the worst ways to make money. To make any kind of real money it takes three to five years and that’s only if you can crack the top 0.01% of sites – and that’s a big if.

And don’t even get me started on an old school bricks and mortar business, that’s a failure factory. Market risk, high investment costs, physical overhead, employees, bank loans – a recipe for failure for all but the savviest businessmen.

The name of that game is getting your hands on other people’s money and holding on long enough to pay back your loan. That’s out of my wheelhouse, but if that’s your path then you want Dan Pena, the only legitimate business coach in the world.  You can Torrent his book How To Make Your First $100 Million here (he doesn’t sell anything and encourages you to torrent it).

What I want to explain to you is the kind of business I would have started if I wanted to make money from day one.

The kind of business where you can hit six figures by year three.

The kind of business I would have started at 21 if I could do it all over again.

The kind of business I recommend for the majority of you is a:

Location-Dependent Service Based Business

A service based business is the fastest way to make money there is. It also has the lowest failure rate of any type of business. All you need is a phone, an Internet connection and you’re ready to go. If you have a ruthless work ethic and know how to sell, you can do six figures in two to three years.

To succeed in a service based business you don’t need a degree, you don’t need an exceptional IQ, you don’t even need an average IQ, all you need is a set of brass balls and the ability to work like a hungry dog .

To understand why you should start a service based business you first need to understand the difference between a service based business and a product based business. A serviced based business, like it sounds, is a business based around selling your services to clients, eg. a service like personal training. A product based business, like it sounds, is a business based around selling a product to your customers, eg. an ebook.

In this day and age you don’t hear a lot of guys telling you to start a service based business. It’s not sexy, it’s not new, it’s location dependent and you end up selling your time for money. Many guys compare running a service based business to having a job, and they’re right.

It’s not sexy, it’s not new, it’s location dependent and it is like having a job. But, it’s not a job and that’s the crucial  difference. You don’t have a boss telling you what to do, you can work as much or as little as you want, you can take a vacation whenever you want, you can fire any client and most importantly you keep everything you earn.

The average salesman lives off 10%, that means he needs to do a million in revenue just to make six figures. A salary is nothing but an excuse to pay you less than your worth.

Now you guys know I don’t usually write about anything that’s not based on 100% direct personal experience but I’m going to stretch that experience on this one because this concept is so important and because I have near equivalent expertise.

I might not have started a service based business but I’ve worked in corporate sales for close to a decade. With every new job I was handed a phone, a computer and told to build a book of business. From cold calls, to cold meetings to getting clients and keeping clients – I’ve done it all.

Within a year I would be expected to hit revenue targets of $30,000 per month. I’ve built three books of business from scratch – I know how this game works and I’m going to break it down for you in pros and cons.

THE PROS

1) It’s Easy To Start

All you need is your phone and an internet connection. A service based is easy to start whereas a product based business takes a lot of planning and upfront capital.

My buddy started a car brokerage business and did $40,000 his first year with nothing but a telephone and an internet connection. It’s almost impossible not to make money in a service based business if you put in the work.

Selling insurance, real estate, personal training, shoveling driveways, laying asphalt – you can be operational in any of these businesses by next month.

2) You Risk Your Time Not Your Money

If you want to open a Subway franchise that’s $100,000 gone, money you’ll never see again until you sell the business, and that’s if you can even make a profit.  Any kind of bricks and mortars business is an insane risk to me, and for what? A 10% return on your investment a year? And just to get in the game you have to go in debt to the thieves in suits just to make it happen – fuck that noise.

Service based businesses have no overhead, no capital investment and no salaries. You don’t have any of the other hard costs you’d have to worry about in a bricks and mortar business. All you’re risking is your time.

In a bricks and mortar business you’re gambling with your future. I don’t envy the 25 year old sitting on a failed business, a pile of bank debt and trying to carry the weight of a personal bankruptcy looming on the horizon.

And to add insult to injury he has to go back and get a job. That kind of failure can set you back five or six years.

I want your exit from wage slavery to be clean, surgical and permanent. That means your savings, instead of going into your business become runway for your business. Your savings become padding to your income for the first few lean months.

Instead of dumping that $20,000 of savings into your business you can let it sit safely in the bank knowing that it will buy you a year of lean living on top of what you’re making from your business. That’s going to make your life a lot more comfortable as opposed to living on a razor’s edge with $100,000 in bank debt.

3) It’s Realistic

This is the one that’s going to be the most controversial. Most self help gurus tell you to reach for the stars and you can do anything. They tell you any other type of thinking is a limiting belief. Well I want to tell you that limiting beliefs are a good thing.

I have a limiting belief that I can’t fly, if I didn’t I’d be nothing more than a stain on the sidewalk. My childhood dream of being a pro NBA player is just about as realistic. You can put a gun to my head and I’ll die before I play in the NBA, it will never happen.

Being a billionaire is not realistic. You can’t be anything you want, even if you put your mind to it. Unless you have an IQ of 160 and are already a millionaire, the odds of you becoming a billionaire are abysmal, you’re better off playing the lottery.

Being a multi millionaire is hard enough, despite what the dreamsellers write in their fraudicles. Usually they’re the only ones making millions and they do it by selling lifestyle porn to the desperate.

In the real world, my most successful friend makes $300,000 a year and that’s after a decade of cutthroat financial sales, 3 promotions and ruthlessly stomping on the neck of anyone who got in his way.

Making a ton of dough is not easy in the real world, not even close.

With that said, succeeding in real estate or insurance or programming – that’s doable. Making six figures in your first few years, that’s doable. Making $250,000 seven to ten years in, definitely doable if you pick the right market and you hustle.

Those are realistic goals and realistic goals are the goals you need to set for yourself.

4) You Can Run It On The Side

If you’re not ready to make the jump yet you can still dip your foot in the water, there’s no shame in that. Sure it will take longer but when you close that first client you’ll know you made the right decision.

There aren’t many other businesses you can run while you have a full time job.

You want to start a franchise and run it on the side? Not a chance.

6) You Know You Have A Market

You’re not reinventing the wheel. By selling real estate, insurance or your skills in programming you know there’s a big market for your services. Not so in a product based business.

In my tech startup it cost us $75,000 and a year and a half of our time to get to get to market only to find out we didn’t have a market. Despite all the financial voodoo we could muster, our sales still couldn’t cover the cost our cost of advertising – an expensive lesson.

Luckily you don’t have to worry about that in a service based business, and if you start it on the side you can have your first customer even before you commit to running it full time – that’s a massive advantage.

7) You Have No Employees

The average employee is lazy, dumb, and dishonest. I thank God every day I don’t have to work with people any anymore.

Business surveys show that 90% of your stress and time will come from having to manage people. Not to mention your highest business costs will be paying salaries, insurance, medical care and all the other things the government extorts from entrepreneurs in the nanny state once known as western civilization.

Taking vacations whenever you want? Forget about it, you have grown men to babysit. Hiring, firing, lawsuits, stolen property – these are all things you won’t have to worry about with a service based business.

I love being a sole proprietor. When I want something done I find a top rated contractor on Elance – no interview necessary. On the off chance they fuck up I get rid of them and find someone else – it couldn’t be any easier.

When you have no employees and no colleagues you can make your cold calls from your bedroom, in your sweatpants with a beer in one hand and the phone in the other. Here I am right now, hard at work.

My Office

8) Huge Margins

The margins on a service based business are yuuuge.

NEW YORK, NY - JULY 06: Donald Trump attends the 2015 Hank's Yanks Golf Classic at Trump Golf Links Ferry Point on July 6, 2015 in New York City. (Photo by Andrew H. Walker/Getty Images)

The only business that has better margins is drug dealing but I’ve heard it’s tough to compete with the CIA.

In a service business your only expenses are your phone, your Internet connection and whatever you want to spend on marketing. My friend started a car brokerage with $5,000 in expenses over the course of his first year or just over $500 a month. The majority of that money was spent on Google Adwords, in face he didn’t even make a single cold call. He ended up taking home $40,000 in profit, that’s a 700% return on his investment!

Think you can get 700% a year in a bricks and mortar business?

Not even close – you’re lucky to get 10% a year. That’s why you only get rich in bricks in mortar with other people’s money. The name of that game is take on tons of debt and either make enough to pay back your loan or go bankrupt.

That is unless you’re a big company, in that case the government will just bail you out at the expense of the taxpayer.

Government Motors

The Cons

1) It’s Location Dependent

You’re tied to one location, there’s no way around that. What you can do is choose your location. Instead of trying to sell insurance in cold, run-down Detroit there’s nothing stopping you from selling it in Florida’s hot housing market.

Not only that but just because your business is location dependent doesn’t mean you have to be. Being your own boss with no employees means you can take a vacation any time you want for as long as you want.

2) It’s Tough To Scale

To make millions you need to reach millions. You can’t do that as a one man operation. Unfortunately that’s just a sacrifice you have to make for a stable, income with a relatively low monetary barrier for entry.

With that said you always have the option down the road to hire employees if you feel that’s the right move for you.

If you’re willing to deal with the extra stress and time this can seriously enhance your revenue.

3) It’s Not Fun

Building a service based business is not fun, Especially not the first year. Building your book of business whether it’s in a sales job or your own business is not fun. Pounding the phone, dealing with annoying or abusive clients, networking events, research, aggressive marketing – none of that shit is fun.

There’s a reason I didn’t start a service based business and that’s because I’ve had enough of that bullshit over a decade in sales. I can’t tell you how much I love not having to deal with clients. Otherwise I’d be an independent real estate agent in Toronto closing in on $200,000 this year.

But for most of  you young, hungry guys full of piss and vinegar, who are looking to make it happen, this is your best shot.

If you’re going to sell you might as well do it for yourself. Don’t give your most productive years to make some other cocksucker richer like I did.

The good thing is, if you come out swinging, within three to four years as much as 50% of your business can be coming from referrals or from your existing clients.

By six or seven years in you might never have to make another cold call.

Your Mission Vs. Your Business

As you know I truly believe the most important thing in every man’s life is his mission. Without a mission you have no purpose in life. A man without purpose is lost and prone to depression, drugs, alcohol or any other escape from the painful meaningless of his existence.

A man with a mission has purpose and he approaches his mission like a soldier approaches a war. Your mission is that big goal and the end of the rainbow that you’re willing to sacrifice everything for.

Now, your mission and your business are not necessarily the same thing but they should be related. Your business is the means to accomplish your mission.

If you’re still struggling to find your mission it’s because you haven’t identified your pain. The best way to define your mission on this planet is to choose an objective that solves as many of your pain points as possible.

For most of you guys that’s going to be a successful business. A successful business will solve the problems of debt, poverty, lack of freedom, lack of status, lack of purpose, lack of healthcare, lack of travel and many other things. Without a business you’re dependent on some jerkoff for the rest of your life to solve those problems, is that where you want to be?

For me, my business and my mission are the same thing – build the most effective personal development company in the world and help as many guys as I can. With that goal comes money so my mission and my business goal are one and the same.

With that said, I know selling real estate as your mission in life doesn’t sound very sexy – that’s because it’s not. This is not a guide to “living your passion” through your business, this is a guide to making money in business. You’ll never be passionate about the process of selling real estate or cold calling but you can learn how to be passionate about the money you make by linking every closed deal to a dollar sign.

Becoming a successful real estate agent is not a mission  – becoming a cash millionaire by 40 with complete financial freedom is. That kind of thinking is going to give you that burning fire you need to power through every obstacle. I can’t define your mission for you but I can show you the way.

How To Build Your Business In This Order

1) Pick A Service That Fills Demand

You’re not reinventing the wheel. You’re taking something that other people are doing, doing it better and working 10 times as hard. Your market should already be well-defined and profitable. For many of you that means you’re selling your brokerage services on the purchase of a big ticket item that’s in high demand.

In return you get a commission on the deal. You could sell real estate, insurance, yachts – it doesn’t matter as long as there is a demand for the service.

You can also sell lower priced services if you can find a market with sufficient volume and consistency. A great example of a market with massive demand would be programming services. If you’re a young guy with a brain I’d highly recommend this field.

You can even make good money with a blue collar business. That could be laying asphalt, carpentry work or plumbing. You won’t be able to make as much but you can eventually do six figures if you hustle.

2) Get Your Designation If Necessary

This shouldn’t be too hard. Some of the dumbest people I’ve met are real estate agents. You want to apply for your license as soon as possible, that way you can get the other things on the list done while the regulatory body processes your application.

3) Learn How To Sell

Selling is the most important skill in business. Luckily for you, I’ve got everything you need to succeed in my book: How To Sell. I’m not a sales trainer or your boss so I don’t have to lie to you, read the book and I promise you it will not only take five years off your learning curve but give you the unvarnished truth of what sales really is.

4) Research Your Industry

While your application is processing it’s time to get started on your research. You want to know your industry better than anyone else. Knowledge is power and if you don’t know your market inside out someone smarter will come along and take your business.

5) Set Your Income Goal For The Year

Now that you know your industry you know what kind of goals to set for yourself. On average, $40,000 is a realistic for year one, $60,000 for year 2, and $80,000 for year 3. If you want to set more aggressive goals then go for it but I prefer to set conservative goals and smash them out of the park. Whatever the goal is you need to make sure you can hit it.

6) Work Like There’s A Gun To Your Head

Now that you have your income goal you need to make that the most important thing in your life and work like there’s a gun to your head. Work like you die if you don’t hit that goal, that’s how serious it is. Remember, you have a mission to accomplish and that mission is based on your income and 90% of your income is going to come through sheer hard work.

This is a brawn business, not a brains business. This is a work harder not a work smarter business. Some of the best salesmen I know can’t write an email to their clients without it being littered with grammatical and spelling errors. This might be tough for some of you sharp guys to accept, it was for me, but keep this in mind, you’re not getting paid for your brain, you’re getting paid to do what no one else wants to do.

The difference between a good salesman and a great salesman isn’t all that much, the real difference is work ethic. If the average real estate agent is working 8 hours a day, 5 days a week and you’re working 12 hours a day, 7 days a week you’re doubling their output.

If they make 40 cold calls a day and you make 600 you’re 10xing their output – you cannot not decimate them. I used to make 400 calls a day for minimum wage in a call center, you can surely do it for your own six figure business.

For the first six months at least you should aim for 10-12 hours a day, 7 days a week so you can build up a nice big book of business quickly. Just so you guys know, 12 hours a day isn’t even 100%, giving 100% is working 16 hours a day. I’m not saying to do this but I’m telling you what you’re capable of.

It doesn’t mean you have to be cold calling all that time but you should be doing some type of research on your industry and your market. Sure it won’t be fun but it’s not supposed to be, that’s why they call it work, not super, happy fun time. Luckily you’re a tough motherfucker and not some limp-wristed little faggot and you can handle it.

Optional) Apprentice With A Winner

If you’re not quite there, or you’re in an industry where there’s a big learning curve like insurance or real estate you might need to do an apprenticeship for a few years. I can tell you with 100% certainty that this won’t be fun.

Many times in life you have to pay your dues. Unlike other wannabes who learned how to be “alpha” on the internet, that’s not how it works in real life.

You guys would not believe how much dick I had to suck in sales to buy my freedom.

Every day I had to ask 70 people I didn’t like for money. You’re born into slavery and if you’re serious about getting out then you have to approach it like Malcolm:

By Any Means Necessary

 Conclusions

Whether you’re a young guy straight out of school or a guy in his mid-30’s looking to get out of the workforce, a service based business is your best shot at success and consistent, six figure income. For all you guys who emailed me about what kind of business I think you should start – this is it. For at least 90% of you guys I recommend starting a service based business.

With that said, if you’re truly committed to massive success or you have an exceptional talent, or you’ve got the business acumen and know that the big winner is on the horizon, don’t let me stop you.

If you think you can beat the odds and build a massive product based business I don’t want to discourage you, I just want you to have all the available information. And besides if you’re truly committed to massive success, nothing will dissuade you, including this article, this is after all just one man’s thoughts.

Whatever path you choose I wish you all the best on it, as long as you have a mission and are taking action you’re on the right path.