Millionaire-The Rest of the Story
Millionaire story-In Part I we saw Rick and Debbie lose their jobs at the same time and they decided to start a business and within 2 years they were millionaires. Here is the rest of the story. If you did not read Part I, you might like to read it first.
Sales and Growth
Year Employees Revenue Est. Net Profit
2008 53 employees $1,100,000 $275,000
2009 70 employees $2,100,000 $525,000
2010 102 employees $2,580,000 $645,000
2011 125 employees $3,350,000 $837,500
2012 128 employees $3,500,000 $875,000
2012 Sold for over $2,000,000
All the sales information was provided to me except the estimated net profit. Rick did tell me the average annual net profit of his company was 28-30%, while the industry average is about 8-10%. This does not surprise me since the company was run by a husband wife team which was very cost conscious. Plus the company was in a higher end niche market of the security business. I estimated the net profits at 25% of the total revenue. Of course some money was used for living or whatever they wanted, but still added up. If you include the sales price, they made about $5,515,750 in 4 years from an initial $100,000. Even after taxes they must have made about $3,600,000. If they lived on $200,000 a year, they were able to save about $2,800,000. I know there are many assumptions, but still that is not bad for 4 years.
Help and Advice
As was mentioned earlier SCORE was instrumental in getting American Eagle Sentry started with advice to Rick and Debbie. SCORE was along for the whole ride with advice in the business plan phase, their growth phase, and even in the exit phase. SCORE assisted with the business valuation as well as their evaluation of the right broker and the bids to purchase their company. They helped with assistance and advice right through the final sale in 2012. To be fair, the biggest initial assistance was the SCORE business plan outline that Rick used to do his plan. Most of all the rest of the SCORE help was through a mentor who was also their neighbor. He was always there when needed to lend any advice that he could. When I asked Rick what his free advice to anyone wanting to start a business he said, “Entrepreneurs must have a plan and always persevere: don’t give up. Success in life is the result of how you react to adversity.”
I mentioned the consultant above doing the research that lead to the American Eagle Sentry website. The paid consultant was Diana L. Garren, the owner of True Perceptions Inc., which is based in Atlanta, Ga. Although Diana has many clients in many different fields, what is very significant is that Diana is a consultant that specializes in developing businesses related to private investigation, security, and attorneys practices. If you are going to pay a consultant make sure they are experts with experience in your specific business. There is a place for consultants, in this case although Rick had extensive experience in law enforcement and security he had no sales and marketing experience. He had heard Diana speak a few years before; he was impressed and called her for her ideas. She was a big part of Rick and Debbie focusing on a niche market instead of being a generalist security company. This made American Eagle Sentry different and set them apart from the crowd. Diana also designed the sales/marketing package and an e-mail marketing plan mentioned above. Together this allowed Rick to give the sales/marketing package to help educate potential clients and his e-mail program allowed him to stay in touch with all current and potential clients. Diana reminded them that you must have a professional image including an email address: not “something @ yahoo” or gmail. Potential clients today research your company and you must be represented professionally. This added to their credibility. You should research any consultants you plan to hire and have a specific problem you want them to solve. In this case it really worked out very well.
What if they had not had the $100,000?
Some people may say this is a great story but I do not have $100,000 to start, or the credit to get a line of credit. You don’t need your own money or good credit to start a business. As I have said before I was bankrupt and had no money. I raised $203,125 to start my business for a small percentage of my business. Rick and Debbie could have done this if they had not had some savings. It was a couple of years before we could get a line of credit, but our suppliers allowed us to float payment until we were paid. The Stalys essentially did the same thing by getting paid in advance with the discount program. If you have a good plan, you can find the money you need. Sometimes a little creativity helps too.
Unemployed to millionaires in 4 years with their own business, you can do this too. When Rick and Debbie sold their business in 2012, they bought a 43 foot motor coach to travel around America. It was a wild ride with their business, but in just 4 years they had achieved their financial security, paid off all debt, and built a dream cabin in Tennessee. Rick was 58. They were close to hitting the road when Rick was offered an Undersheriff position in Flagger County, Florida. It was big surprise. Debbie could see the excitement in his eyes. This was a chance to be in law enforcement again, maybe his last chance and it was a very important position. He was second in command of a 265 person law enforcement agency. He told Debbie, “I’ll do whatever you like if you really want to start our road trip that is fine with me”. She looked in his eyes and said, “Our road trip can wait, you go have fun.” So as of January 2013, Undersheriff Rick Staly put on a uniform again to serve and protect. He told me, he never realized that having the money they have made from their business made him enjoy his job more than ever. It gave him a sense of empowerment, he was more relaxed, and he was as happy as he has ever been.