How to Start a Business With Only $50 — and Sell It for $40K
When I was a life insurance salesperson, I only had to report to the office on Tuesday and Friday mornings for brief meetings. The rest of my time belonged exclusively to me — it was a straight commission job, and whether I failed or succeeded was strictly on my shoulders.
Most people might feel terror at this prospect. But, for me, it reignited an entrepreneurial fire. Once I got a taste of this freedom, I began to yearn for total control over my time, my career and my financial destiny.
As a single parent, my number one priority was to make a decent living to support my family. My son had just graduated from high school, and while he received a few scholarships, he needed additional support to pay for college.
While most people probably would have stayed with the insurance business or secured a more stable job, I decided to start my own advertising company.
With only $50 in startup capital, I built a business that supported me for 10 years, fed my need for freedom and helped my son pay for college. Here’s how I did it.
1. I Acquired a DBA
After a bit of research, I realized I needed a DBA (Doing Business As).
If I wanted to sell under my own name, it wouldn’t have been necessary, but I wanted to appear professional to potential clients. A DBA is nothing like setting up an actual business or LLC; it’s simply a way to use an assumed name rather than your own name.
Once I filed the DBA, I officially became a self-employed sole proprietor in the eyes of the IRS. It was as simple as filling out a form at my local county clerk’s office and paying a $20 filing fee.
I was responsible for paying self-employment income tax and handling all of my own bookkeeping. I made sure to keep records of and receipts for all money I spent and received.
2. I Ordered Business Cards and a Portfolio
Having business cards was my second crucial step to appearing professional in my advertising business. I ordered 500 business cards online for around $10.
I also wanted a portfolio to hold paper, pens, business cards and even my cell phone while I approached and met with sales prospects, and found plenty of good options under $30.
However, this was in the early 90s — you may simply use your smartphone!
3. I Started Approaching Potential Clients
My first and most frequent project was selling ads on restaurant menus. I’d tell the restaurant owner I would give them free menus if they let me put advertising on the borders.
(Most owners were incredulous at this offer — people don’t believe anything is free. But I was professionally dressed and confident, and often received a yes.)
Once I got the green light, I would use one of the restaurant’s menus to create my sales tool layout. I would give the restaurant my business card and also ask if they had suggestions for small businesses that might like to advertise on the menu.
I’d also ask the owner to commit to using the menus for a specific period of time, typically 12 months). That way, when I sold the ads to small businesses, I could assure them their ad would be on the menu for a full year.
4. I Created a Menu Layout with Blank Ad Space
This was the fun part. I simply bought a white poster board and cut it to the size of the menu.
I made a copy of the inside of the menu — the actual food items — and pasted this onto the poster board, leaving its outside edges blank.
In this blank outer edge, all around the menu copy, I created blank ads spaces using a ruler. And bingo! I was ready to sell ads. I followed the same procedure for ads on the back of the menu.
5. I Sold Ads and Collected Payments
I found my best prospects for ad sales from several sources:
- Asking the restaurant owner about small business owners who frequented the restaurant
- Calling businesses near the restaurant, or at least in the same town or county
- Placing classified ads for small businesses in local publications
- Talking with small business owners I knew or had previously worked with
One word of caution about selling ads: Collect your money upfront.
At your discretion, you can set up a payment plan for a client, but get a substantial down payment first. If they’re not invested, people can easily change their minds.
6. I Finalized the Menu With the Restaurant Owner
When I finished selling all of my ads, I arranged a meeting with the restaurant owner to go over any menu or price changes, and choose colors.
I only offered one color to save money, as multi-color printing is much more expensive.
7. I Outsourced Typesetting and Graphic Design
Since I was not a professional graphic designer or typesetter, I chose to hire this work out. I found a professional designer, and paying her to do the typesetting and layout for the printer saved me a ton of headaches and time.
The cost of hiring someone to do this work can vary greatly. Try looking for someone on Fiverr or PeoplePerHour, or find someone in your neighborhood. My cost was usually around $300-$500, depending on the complexity of the menu.
8. I Built a Relationship With a Printer
I shopped diligently for a small but professional printer who understood my vision and what it meant to run a small business. This partnership lasted for 10 years, until I sold my business.
I usually paid around $500-$600 for 100 printed and laminated menus. The printing took a couple of weeks — time I spent lining up my next project!
I loved the final step of my current project, though, which was delivering those beautiful, free menus to the restaurant.
How Much I Made Selling Ads on Restaurant Menus
Most menus included around 25 ads and I sold them for $150 each. It usually took me about a month to sell them all.
Design and printing cost a total of $1,000.
That’s a profit of $2,750, or around $700 a week.
Not bad, huh? I could have sold the ads for quite a bit more, but it was much easier to sell at a price small business owners could reasonably afford.
I ran my company successfully for 10 years and ended up handling many other projects, such as brochures, event calendars and business cards. I even had a few commission-only sales people working for me by the time I sold the business in 2003 — for $40,000.
Thanks to my business, I was able to support myself comfortably and help my son with college expenses. These steps worked for me — could they work for you?
Your Turn: Are you interested in starting your own advertising business?
Denise Grier is a pro blogger as well as a WordPress and SEO expert. You can contact her for help with your online business and read client testimonials at http://smallbusinesspromote.com.