Post: #1

You can easily build a business making mid 5 figures by running a business but instead of doing the jobs yourself you send them to another company who provides that service but has bad marketing or just needs more work. I only have experience this with US based businesses so that's what this info will be related to. Some things it would require:

• Google voice number. You can setup hangouts to receive calls over wifi or forward to your cell in the US. That way you can separate personal from business calls.
• A service based business you have some knowledge of such as any construction trade, tree service, moving companies, towing companies, locksmith, the possibilities are endless.
• Ability to create a website better than the competiton that looks legit
• Marketing skills and an address for google maps and other listings
• Some sales skills (can be learned fairly easy)
  

What do I pick?
Your city and industry would have to be picked very well. You want something where there are many people searching for that type of business. You want an industry that's large enough to where there is high competition so you can target the smaller companies that need the work. If there is no competition they don't need you.

How do I generate phone calls?
To generate phone calls you need the best google position and the best google maps position. This is done by having a great domain name, a great website, and great marketing. You need to generate as many links as possible, do the most google maps citations, and add as many relevant pages to the site as possible. This is done slowly and if you execute it right you will outrank the comptition in no time. There is much more to it but SEO would need an entire post on its own.

How do I sell the customer?
You have to call around in your market and compile price lists. Ask them any questions you can think of so you can steal some of their sales pitches if they are any good. You charge the customer a little bit more than your comptitors and it gives you room to make more money.

What do I do after I make a sale?
You want to call around to different people in the market to find the perfit fit for you. Sometimes you can get them to give you "wholesale pricing" which gives you room to charge the customer more and also make a commission on their normal price. This will be a learning curve to find the right one because many people are dirtbags and will screw the customer or not pay you.

What's an example of how I make money doing this?
An example would be me having the #1 listing for moving companies in Houston Texas. Companies might charge something like $80 an hour for three guys. You could quote the person $90 per hour and if you book the job and have a company to offer you wholesale pricing of $70 per hour you just made a $100 commisison on a 5 hour moving job.

I'm sure there are some things I didn't cover but if anyone has any questions post them here and I will answer them. This is not a get rich quick scheme, this is something that will take lots and lots of hard work but can generate a steady income by living anywhere in the world.

Post: #2

This is exactly what I do.....

Post: #3

So this is basically a lead generation business?

Post: #4

Kind of, but instead of selling leads you are selling jobs. It's more work but also more money and you have more control over it to build it up to something generating more money over time.

Post: #5

Love this business model.

I've recently started this myself with a partner. We contract the work out to people on freelance sites (upwork, for example) who charge us $10/per for some sort of work. We then gross up that work (website design, SEO, FB Marketing) by a certain percentage.

It's a fantastic business model because you hold no inventory, and you're simply the intermediary between the contractor and the business. I find that small-businesses are the best to target with this kind of business model, however. Often these small-business don't know where to start when it comes their marketing - target these businesses, offer them x amount of free leads, and they become valuable customers.

A good strategy is to offer discounts on front-end services (Website building), and earn most of your revenue from the backend stuff (as I said above, SEO, traffic management etc.). I've only just started my business, so I'm not an expert, but on my podcast I've interviewed a few people who run this type of business, so I know a fair amount about it.

Post: #6

It's a shady business model, assuming you don't disclose that you are just a middleman.

Post: #7

(05-18-2016 12:50 PM)zoom Wrote:  It's a shady business model, assuming you don't disclose that you are just a middleman.

How so?

Do companies disclose to you the price of materials that go into making their products? When you buy a product from Wal Mart, do you care that it was made in China, and not in California or wherever?

It's no different; we advertise ourselves as a full-solutions company, offering to help with the services I listed above. What happens, is that if you remain consistent with work, the freelancers usually start working solely for you; but at the same cost. It's only shady if you make it so. Companies save money, get quality work; everyone's happy.

Post: #8

(05-18-2016 12:54 PM)WeekendCasanova Wrote:  How so?

Do companies disclose to you the price of materials that go into making their products? When you buy a product from Wal Mart, do you care that it was made in China, and not in California or wherever?

It's no different; we advertise ourselves as a full-solutions company, offering to help with the services I listed above. What happens, is that if you remain consistent, the freelancers usually start working solely for you; but at the same cost.

EDIT: If you are just hiring freelancers from upwork then that's not bad.

Post: #9

(05-18-2016 12:27 PM)CleanSlate Wrote:  So this is basically a lead generation business?

No not a lead generation business because you arent selling leads, instead you are the service provider in the customers eyes... They sign your contract, you invoice them, in additon you can sale them your own items while you sub the actual physical labor out to someone. Though the OPs margins are much slimmer than youd ever actually want to do it for, as you have to put up the money for the work and you dont always get paid. You have to pay for advertising, websites SEO etc. It would only be fiscallyl feasible if you charge around $95-$125 and paid the subs $30-$45 per hour of course those numbers veery but you'd want to leave yourself alot of cushion for any thing that can happen. Any material the subs use you pay for and mark up, and you sale whatever you sale if they need to have items replaced. We've applied this in the technical field and can sale and service different hardware and software best part is once its physically in just about all future work can be done remotely as we now have access to the network so we dont need a freelancer to go onsite so we eliminate their fee and pocket it entirely ourselves. This can be done in any market, as you are not just one company handling one job but handling many you can charge less as WeekendCassanova states as you have very little overhead, no invetory, carrying cost etc.. simply your advertising, SEO, employees that manage your projects and freelancers when needed.

(05-18-2016 12:50 PM)zoom Wrote:  It's a shady business model, assuming you don't disclose that you are just a middleman.

How is this shady? This is the way business is done you arent a middle man if you hold the contract, and are doing the invoicing... If you have any business and an employee is a full time or part time freelancer what is the difference and why should you disclose what your businesss model?

Post: #10

(05-18-2016 01:47 PM)ElJefe1 Wrote:  How is this shady? This is the way business is done you arent a middle man if you hold the contract, and are doing the invoicing... If you have any business and an employee is a full time or part time freelancer what is the difference and why should you disclose what your businesss model?

It's shady if you're pretending to be the company that you are outsourcing to. People don't like having their work outsourced, they want to deal with the actual company doing the work and not the middleman.

For example, in the past I hired this web design company. They were based in Washington State and had a physical address there. But what happened was they outsourced my work to Vietnam, and the quality and communication delays were bad. I eventually found out what was going on and I was pissed.

Post: #11

(05-18-2016 02:41 PM)zoom Wrote:  

(05-18-2016 01:47 PM)ElJefe1 Wrote:  How is this shady? This is the way business is done you arent a middle man if you hold the contract, and are doing the invoicing... If you have any business and an employee is a full time or part time freelancer what is the difference and why should you disclose what your businesss model?

It's shady if you're pretending to be the company that you are outsourcing to. People don't like having their work outsourced, they want to deal with the actual company doing the work and not the middleman.

For example, in the past I hired this web design company. They were based in Washington State and had a physical address there. But what happened was they outsourced my work to Vietnam, and the quality and communication delays were bad. I eventually found out what was going on and I was pissed.

You don't know how business works then. Outsourcing makes the world go round. As long as the outsourced work is quality, there will be no problems. Just because you experience something, doesn't mean that's how it also is. The company you hired clearly didn't vet their contractors and or were new at operating a business.

Post: #12

(05-18-2016 01:06 PM)zoom Wrote:  

(05-18-2016 12:54 PM)WeekendCasanova Wrote:  How so?

Do companies disclose to you the price of materials that go into making their products? When you buy a product from Wal Mart, do you care that it was made in China, and not in California or wherever?

It's no different; we advertise ourselves as a full-solutions company, offering to help with the services I listed above. What happens, is that if you remain consistent, the freelancers usually start working solely for you; but at the same cost.

EDIT: If you are just hiring freelancers from upwork then that's not bad.

This follows with my above point, which is as long as you ensure that your contractors are experienced and do the work right, outsourcing is fine. The problem is that some companies hire cheap Vietnamese labour or guys from India that do a botch job.

Post: #13

If you are doing what I said and actually doing it right, they are getting a much better service. They key is communication and always being available to answer calls emails. People do not like to wait a day to hear a response or get a call back. If you don't answer the calls right away and reply to emails right away you are basically lighting money on fire. The reason you can even pull this off is most small businesses are complete idiots when it comes to communication with clients. One business in particular does amazing on Sunday and I've had people hire me on the spot and say "I called 10 different places and you're the first one to answer!".

As far as hiring freelancers I really don't see the difference between that and a marketing firm having a sales guy taking the job and someone in the office doing it. The guy selling the jobs on the phone does not have to physically do your job from start to finish. It sounds more to me like the company you hired sucked and didn't hold up their end of the bargain, that can happen whether they are doing it in house or outsourcing it.

As long as the client is getting what they paid for there is absolutely nothing shady about it.

Post: #14

(05-18-2016 02:41 PM)zoom Wrote:  It's shady if you're pretending to be the company that you are outsourcing to. People don't like having their work outsourced, they want to deal with the actual company doing the work and not the middleman.

For example, in the past I hired this web design company. They were based in Washington State and had a physical address there. But what happened was they outsourced my work to Vietnam, and the quality and communication delays were bad. I eventually found out what was going on and I was pissed.

This is idealistic.

Every company "outsources" their work and claims it as their own. They pay employees or contractors to do it. Doesn't matter where the ephemeral boundaries of "their company" our "our company" lie - it's all simply just work getting passed from sales people to managers to grunt workers.

What does matter is when that chain of transmission results in lower quality of service or customer experience. But that can happen with any link in the value chain - the shitty slow web designer in Vietnam or the one in Washington. Whether the weak link is within "our company", or between "our company" and "our supplier", is not the issue - the real problem is the shitty service that annoys customers.

Post: #15

(05-18-2016 04:53 PM)Shimmy Wrote:  If you are doing what I said and actually doing it right, they are getting a much better service. They key is communication and always being available to answer calls emails. People do not like to wait a day to hear a response or get a call back. If you don't answer the calls right away and reply to emails right away you are basically lighting money on fire. The reason you can even pull this off is most small businesses are complete idiots when it comes to communication with clients. One business in particular does amazing on Sunday and I've had people hire me on the spot and say "I called 10 different places and you're the first one to answer!".

Okay fair enough Shimmy, I respect that answer.

Post: #16

Glad people above answered it correctly!

I was on my phone, and my answer was incoherent and incomplete. My bad!

Post: #17

How do you keep the people to whom you've outsourced your work from contacting the end user directly and working for them directly and cutting you out?

Post: #18

(05-18-2016 10:40 PM)booshala Wrote:  How do you keep the people to whom you've outsourced your work from contacting the end user directly and working for them directly and cutting you out?

With the exception of some services (SEO/Some marketing (FB) etc), the freelancer doesn't have any client information. Additionally, the draw for the freelancer is that we will presumably, if his work is good, bring him more business. He/she are essentially getting free marketing, so (as of yet) there's been no desire on the part of the freelancer to contact the client and cut out the middleman.

Post: #19

(05-18-2016 10:40 PM)booshala Wrote:  How do you keep the people to whom you've outsourced your work from contacting the end user directly and working for them directly and cutting you out?

You dont its going to happen doesnt matter just keep doing the right thing and you will be okay. You will run into shady customers and clients just look at it as getting rid of the people you dont want a part of your organization anyway end users and clients.....

Post: #20

Or, you could own the service company yourself.

People in this subreddit are doing it successfully with house cleaning and lawn mowing:

https://reddit.com/r/EntrepreneurRideAlo..._recap_of/

Post: #21

Also it's one of those situations where the trust structure is sustainable.

Like take the OP's example. Lead-gen for local services. As soon as you find they're doing repeat biz with clients you sent them and cutting you out, you stop sending them leads. That #1 spot on google goes to their competitor instead.

They call it a "grim trigger" strategy in economics. They have no incentive to cut you out, they lose out massively in the long-term.

Post: #22

The shadier the better.

Not having a consumer/employee mindset is the key to riches. A lesson I'm exposed to everyday.

Great post OP

WIA

Post: #23

This is a good post and I have administered a business like this. I won't say the industry but I will say that once you learn the sales and marketing skills used for this, those can basically be applied to lots of other industries as well. In my case, I found a language barrier which created a lot of headaches in a certain industry, and since I spoke both languages, I was able to add value in the communication and convenience of both the end client and the service provider. Both parties always knew there was a middleman involved and there was nothing shady about it.

It is hard to scale because the end client gets used to and likes talking to you. You build a relationship so when you hire an employee to take on some, it can be difficult to transfer that element of it. Also, like mentioned above, it can be hard to keep it under control because if the service provider is too ambitious they could possibly take over the account themselves.

Going back to the sales and marketing skills mentioned above, once you learn those, tons of opportunities open up. Check out the following posts by Joshua Kennon on synthetic equity, which is similar to what we are talking about in this thread.
http://www.joshuakennon.com/creating-and...ake-money/
http://www.joshuakennon.com/mail-bag-sta...rn-income/

Post: #24

Awesome texas, cheers. Like that idea of synthetic equity, and the general feel of that blog - thanks for linking.

I think any time you can become a plug-in profit center that another business depends on, you're onto a winner. Downsides of these kinds of biz of course are low barrier to entry, and also low valuation and exit value of the business you build. Can still sell them for something though, especially if you can prove high customer life-time value and you have the whole thing very systemized, automated and not dependent on your actual presence in the biz.

Post: #25

I don't know about you, but this opens a whole can of worms when it comes to liability if something goes wrong. This is especially true with trades/contractors and clients in construction. Anything more than simple stuff like lawn mowing, I don't think it's going to work.