Here's a 6-Figure Service Business You Can Start for Under $100
Entrepreneur's New Year’s Guide
As you go about your grocery shopping, focused on the items that you need to get, you probably don’t realize that there’s an incredible business opportunity right in front of you. Some of the people you see stocking groceries on the shelf work for that particular grocery store. There are others, however, who are stocking the shelves but they don’t work for the store. They are called “vendors.”
Some of these vendors work for large companies, such as the people who deliver and stock Coca Cola, Pepsi, Frito Lay and so on. There are another set of vendors who aren’t employees of the companies whose products they are delivering. They are independent contractors and, essentially, entrepreneurs. The company they deliver for gives them a certain percentage of their sales and a territory to deliver within. These entrepreneurs have to buy into the business and, depending on the company, that cost anywhere from $50,000 to $300,000.
Some companies that use these independent contractor entrepreneurs are companies that you don’t even realize. A few of them are Bimbo Bakeries, Snyder Pretzels, Little Debbie Snacks, Pepperidge Farms and many more. Since these independent operators are not employees, the main company they contract to doesn’t provide them anyone to cover their routes for them to go on vacation. This is where your potential business can be started. It's one that I operated for over 12 years.
The idea is to start a vacation relief service for independent business owners (vendors).
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Six-Figures at 19
When I was 19, I worked for Sara Lee Bread. Every day, I saw independent operators delivering Arnold/BrownBerry Bread for Bimbo Bakeries. One day, I asked one of the drivers to train me for free and I would do a good job running his route. Since these entrepreneurs invest so much money in buying into the business, they are very leery of letting anyone operate their business. It takes a lot of trust. He trained me and I did a good job for him several times. He then told others in his warehouse about my business and services. Two months after getting trained, I had a full work schedule for two years. I had independent operators beating my door down trying to get me to cover their routes.
The business model was beautiful. I used their trucks, their computers and all of their equipment. The only expense I had was the ink and paper to print the invoices to charge them. Since they are independent operators, they pay directly. There is no need to be involved with the main company.
I charged the drivers a little over half of what their sales were (my fee was 60 percent of their take home pay). My invoices to them were in the neighborhood of $1,800 a week. By four months in, I had to hire two employees to help me handle the work load. In Wisconsin alone, where I lived at the time, there were at least 150 of these independent route owners and that was just for the bread company. By a year in, I had five employees and we were operating in three states. Halfway through my second year I hired one more person. The business was doing $500,000 a year.
How you can start.
This is a business I started from scratch, built to $500,000 a year and sold in 2011. I focused on one company but there are many companies that use independent operators, including mega companies such as Amazon and FedEx. You can start a vacation relief service for any of these companies for almost no money.
It’s a great model and very attractive but I don’t want to paint the picture that this is super easy to get into. The biggest challenge you’ll face is getting an independent operator to trust that you won’t screw up their business. This is their livelihood. They’ve invested a lot of their money into it. Here are some action steps to get started:
Identify the company you want to start your vacation relief service for.
Research the independent operator based vendor companies where you live. Figure out what appeals to you the most. Chips, bread and snacks are all very different and will be different to deliver. Also, each pays their drivers differently. For example, you can charge the bread vendors more than the snack vendors because the bread vendors earn a higher percentage.
Talk to the Independent operators each morning as they deliver and build a relationship.
Trust is huge in getting them to hire you. Offer to train with them and cover their route for free if you have to and demonstrate your skills. If you have any connections to the Independent vendor world, that will help the most.
Get trained and run some routes.
If you show up each day and do good work, word will spread very fast. Some of these independent operators have not gone on vacation in years because they don’t trust anyone to run their business. When you get trained and show up everyday, word of mouth will get you lots of work.
Expand to other warehouses and grow.
You can start in one warehouse and then put flyers for your services in the other warehouses all over your state. You can stay with one type of company or you can expand to other industries. The opportunity is great and this type of work will always exist because we will always need food and snacks delivered to grocery stores.
I’ve have given you the basics. It’s hard to cover every aspect in a 1,100-word post but this will give you enough to get started. This is a physical business that will have you doing manual labor as you build it. You can grow it quickly and to the point where you just manage the business.
This could be a good side business that you do here and there to make money or it could be something that you grow into an empire. It’s very low cost to start and grow. As you grow, you will need to think about things such as business insurance, uniforms to look more professional, accountants, and lawyers. But, the beautiful thing is that your expenses will still be low and the profit has the potential to increase as your get better and expand.
If you have been looking for your chance to jump into entrepreneurship with low risk and low cost, this could be a great business for you.