Category Archives: Meeting CEO’s

How My First Online Business Works

Inundated with emails about this, I decided to show how House Of Rave works. This is just one example of how I use a drop shipping service to make money on the internet. There are still some inefficiencies, but this is the way I handle things now.

I will show what happens from the time I get an order, till the customer receives their order. Everything is done in 5 steps. I can accept, process, account for and send off 2 orders in around 2 minutes with this system. 10 orders will take me about 10 minutes with this system:

1.) Check, View and Review Orders.
I login to the backend of my Shopsite software to see how many new orders I have waiting. I click to view all the orders and do a quick skim of the order information. I am looking for any subtle signs of fraud at this point. After 5 years, I’ve become pretty good.

I can view individual orders or all the orders at the same time:



2.) Charge Orders.

This is the most inefficient step, as I choose to process cards manually to become more familiar with the customer names, locations and spot fraud. I login to my merchant account digital gateway and copy/paste from Shopsite the needed customer information. This step goes quicker than imagined because I use my tablet PC pen.

Here I find out if each order is legit. If the order is declined, I make a note of it and move on. If the order was paid for using PayPal, I login there to find if payment was made. If the order looks suspicious or comes back with negative address verification, I will often call the person on the spot to verify the order.

Manually charging orders seems a waste since I can simply press a “Charge” button instead. However, over time I have noticed that I start to remember customer names, locations and ordered items. Since this step exposes me to the orders, it helps me identify order patterns and it drastically reduces my fraudulent orders (Although this isn’t as much of a problem compared to a few years ago).

3.) Enter Into Accounting System.
This step is very quick and allows me to see my estimated current profit, my expenses, what I owe etc.. I’ve used some pre-made accounting modules for Shopsite in the past, but I like my Excel sheet better. Over the years I have honed it to help predict my profit at the end of each month. I don’t know my exact profit until I get the monthly bill from my supplier, but this Excel sheet gets me damn close.

4.) Create with Word & Send.
This step is the way THIS particular business of mine works. Once an order is ready to go, I copy/paste the information into a Word document and send it via email to my supplier. From there, they print it as an invoice and send the order. This is the way my particular supplier chooses to do business, others may have different methods.


5.)Followup.

My supplier will send me a tracking number once the order is sent. These go into my tracking system where customers can check the status of their order. The tracking module also sends customers their tracking numbers via email automatically.

How I make Money:
I pay wholesale price for the products I send out from my supplier. They send me a bill for the products & shipping each month. I charge retail price on the website and bring in all the money myself. At the end of the month, I cut a check to my supplier and the difference is my income after product expenses. I then subtract my server costs, merchant account costs, PayPal costs and phone bill costs to get my total profit amount.

I’ve made about $800 – $1,000 every month for 5 years doing this. I’ve recently made additions to the site which have doubled my profit to about $1,600 a month. I plan to make this side income generate about $5,000/month in 2006.

I’ve had other online businesses which operate differently, but this process works best for HoR. There is still a lot of room for improving the efficiency of this system, and in 2006 I’ll have time to concentrate on it.

One thing I find the funniest about this business was my first order. I had no clue what to do with it. I just got the business running first, and was forced to figure the rest out very quickly.

Hopefully this helps someone further understand the inner workings of this type of small business!

New scooter, Paid Writing, Increasing HoR Sales

I bought yet another scooter, same year, same brand. I saw it on Craigslist going for a great price, so I withdrew cash from the bank and bought it.

It hardly had any miles on it, and it runs like brand new. The guy selling it was a successful lawyer who stopped riding after he and his wife had a son. He just wanted it out of his garage, hence the great price I got.

I now own two 2003 Aprilia Scarabeo 50’s. My original one is awaiting a part from Italy that will arrive sometime this month. Once the work is complete, I will sell one of the scooters. I might also wait a few months for it to get warmer and then sell it (You get better prices).
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Recently I have been getting a lot of offers to write for stock market websites. One offer I got was from ADVFN.com that pays $500 a quarter or $2,000 a year. According to their agreement I must write a one paragraph post on their website about the stock market every day.

SO I would get $8 a day for writing one paragraph a day, 5 days a week….this sounds too much like a job.

…and honestly, I don’t want stock advice from someone doing it for the pay. I’d rather get advice from Kirk. He’s one of the few stock market writers that makes his money by actually trading stock. I’ve done ADVFN a favor and disqualified myself by discussing the terms:

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Ever since I made up my mind to increase profits for House Of Rave, it has worked.
Here was my hopeful profit chart:

I set my October profit goal at $975, and I slightly surpassed that goal with a total profit of $1,120 for October. Over the next three weeks I will be making more changes that should hopefully boost my profits even more. I enjoy the ease of running HoR, and I know I can increase profits enough to completely cover all my monthly expenses after graduation.

Meeting Michael Dell and Lance Armstrong

7:00pm my phone rings and “Bob” calls me from his regular hotspot, a swanky hotel, saying he happened to notice a large number of high powered individuals heading to the ballroom downstairs. Party crashing time. I took a quick shower, threw on a suit, got my roommate to tie my tie (because I still don’t know how) and drove to the hotel.

I met “Bob” in the lobby as dinner was being served. The place was packed and every seat was taken except at one table. We went up to the table, “Bob” did a little talking, and in an instant we were having a conversation with people we didn’t know, at an event we knew nothing about, and having a delicious meal.

After scoping out the room, it became very apparent that this was a big event with big people. In fact, while opening the bathroom door, I literally bumped into Lance Armstrong!

The event was in honor of Michael and Susan Dell for their philanthropic contributions. There were three billionaires in the room, the biggest being Michael. There was a movie about the Dell charity, several speakers and then they both gave a speech after being honored.

Michael Dell’s wife, Susan, is a tri-athlete and frequently goes bike riding with Lance Armstrong. Here is a picture of Lance, Susan and Michael together….well, their backs at least:

Later in the evening I got to meet Michael Dell, the famed founder of Dell Computers who started his company from a dorm room at the University of Texas. I talked with him briefly and found him to be a very approachable and extremely nice guy.

After the event was over, “Bob” and I headed back upstairs to the hotel lounge to finish up the night with an evening cocktail. That suit cost me $200 and the drinks cost me $25, but now I had the opportunity to meet Lance Armstrong and Michael Dell.

Thanks “Bob” for another great event!

Henry Juszkiewicz – CEO of Gibson Guitar

The Texas Union frequently brings CEO’s and other speakers to UT, and this Thursday night was a speech given by Henry Juszkiewicz, the CEO of Gibson Guitar who took the company from small and unprofitable to the most recognizable brand of guitar in the world.

He claims his passion for music coupled with his love for electronics since he was a kid helped him excel at running Gibson. He strongly emphasized that true success is best accomplished with passionate leadership.

In his third year at Harvard Business School he became curious about buying/selling companies. His professors told him, “Just find a good lawyer.” Not satisfied with this answer, he went into investment banking for a few years to learn about buying and selling companies. He later tried buying several at-risk companies and restoring them. Like most successful people, he failed at some and succeeded at some.

A while later he was informed that Gibson Guitar Corp was for sale, but no one would buy it because it was a financial disaster. He moved to the Kansas to live near the company headquarters and observed the operation for a full 6 months while drawing up a concrete business plan. Once he purchased it, the company became profitable within 30 days because of his hard work and research. Since 1987 he has grown the business 20% every year.

Some of the main pieces of advice he gave were:

  • Have the tenacity and boldness to do things others won’t.
  • What’s possible is only what you think is possible. He said he wanted to grow the company to impossible levels. He has now far exceeded everyone’s expectations.
  • Only allow people in your company who believe in your vision. If they don’t believe in the company, they must go.
  • Constantly grow and innovate.
  • Give back to the community that helped build you.

Of course I had to get a picture with him. I actually brought my own guitar I’ve had for over 10 years to the speech to take a picture with:

The pictures came out….interesting. He covered the head of my guitar in both pictures because it wasn’t a Gibson!

Mike A. Myers – University of Texas

I had the opportunity to listen to Mike A. Myers, an extremely successful business man and community developer. He has developed many high-end neighborhoods and golf courses all around the nation, especially in Texas, including several by my home in Houston. He owns several banks and has been involved in tons of other investments. He gave a large donation to UT to help construct the Mike A. Myers Track and Soccer Stadium:

He is also on the board of many companies and is very involved with the university.

A Quick Background on him:
-He attended UT and later went to law school here also.

-One summer he moved to Michigan to sell books door-to-door. He said still to this day he has never experienced so much rejection as his door-to-door days. He also said learning how to handle rejection helped him immensely in the business world.

-In his junior year of college he started a mobile catering service which ended up being pretty successful.

-He then opened two restaurants, including one very speculative property inside a military base. Both were wildly successful and he had over 40 employees.

-At a very young age he got several high-up internships in Washington D.C.

-After making loads of money from various investments, he decided to build a 750-acre luxury community in Dallas. He put up much of his own money, totaling about 25% of the total capital. He raised the other 75% and got started with the project. One of the largest oil price spikes in history struck and vastly increased the cost of the project, nearly wiping him out completely. In the end he came out successful.

-He later started a bank which has since expanded to several banks.

Towards the end of his speech he said the following five things were his own rules for success:

  • Find a mentor.
  • Keep your options open.
  • Have as few responsibilities to other people as you can.
  • Stay focused.
  • Get Lucky.

He was a great speaker and I definitely learned a lot from his talk (especially some very interesting facts about real estate development). At the end of the speech I spoke with him for a while, discussing his developments around my area and joking about Herb Kelleher. I also got a nice picture with him to add to the collection:

Party Crashing Fashion Show

I was informed about another charity event where many wealthy Austinites would be Saturday night for drinks, a fashion show, dinner and dancing. I always jump at chances like this to meet powerful people, so naturally I decided to crash it.

Crashing this party was a little different because it was black-tie attire only and held at a secure venue. Three days before I had a tuxedo tailored at K&G Men’s store. The entire ensemble including the tux suit & pants, cufflinks, bowtie and cumberbund cost me around $200 after tailoring. Not too bad, especially since there will be lots of black-tie events during the holiday season.

Now that I have a suit AND tuxedo, I’m properly outfitted to attend upcoming events. Looking the part really helps when attending a fancy-shmancy party. When I was checked at the front of the base, they checked my ID, saw I was wearing a tux, asked me if I knew where my table was (I said yes) and they handed me a gift bag filled with Grey Goose, assorted bottled waters, pens and all sorts of other goodies. “Bob” had given me a table name to use, I was wearing a tux, sounded like I knew where I was supposed to be and acted as if I belonged there…and it worked.

I pulled up to the event, and my car was valeted because there was no self-parking. A photographer at the front entrance took my picture by one of three huge tanks, and I asked him to also snap a picture with my own camera:

I ordered a martini, Grey Goose of course because they were partly sponsoring the party and began to mingle. I found the crowd very easy to talk to, and striking up conversations was simple, especially since UT had just won a football game an hour earlier.

After cocktails, the crowd entered a large aircraft hangar (I think) which was converted beautifully into a large fashion show runway. There was loud music playing and the whole place had a very New-Yorky feel to it.

After the fashion show, which was actually pretty cool, everyone was ushered to several enormous and connected tents for dinner, dessert and dancing. There was a silent auction, a live auction, and raffle. The main prize for the raffle was one of three Mercedes cars. I found out the event was being coordinated by the Four Seasons, so it was very nice, and MUCH more elegant than the pictures show:

I knew a few people before I came to the event, but their table was already full. Also, my whole goal of attending this was to meet NEW people, so after some mingling with the crowed I was invited to another table for dinner.

After desert, coffee and some dancing people started to leave. The valet area was around several M1 Abrams tanks….I couldn’t resist climbing on top of one and getting a picture!

I left the party with several contact numbers, new friends, some interesting business ideas, a full stomach and having had a great time.

I must remember to thank “Bob” who told me about the party in the first place. He’s one of the people “In the know” about all these events, and is always gracious enough to inform me about them and help me get in. He also introduces me to his well-established network of friends and mentors, he’s a really great guy…always smiling!

Gary Kusin – CEO of FedEx Kinkos

I just saw and met Gary Kusin, the CEO of Fedex Kinkos. He was giving a speech here at UT and drew in quit a large crowd. He called himself a “Forest Gump” of business because his success was simply the result of hard work. In a nutshell he stressed the trick to getting ahead was outworking the next guy.

He is a UT alumnus who graduated one December with a degree in Government…..that description will also fit me this December. It was very interesting hearing him speak about some of his friends and mentors such as Ross Perot, Jack Welch and Bill Gates. I breifly talked to him after the speech and got a picture:

The reason I am wearing a nametag is because of an idea I stole from “The Guy with the Nametag” Scott. He’s a motivational speaker who has been wearing a nametag for three years. I like the simplicity and effectiveness of the nametag. Now when I attend an event I make my own nametag. It helps people learn and remember your name and is great for starting conversations.

So far it has worked quite well. I usually forget I am wearing it and get thrown off when strangers call me by name! I bought a pack of 25 nametags for less than a dollar. It’s one of the easiest and cheapest ways to aid in meeting people.

-Nev

Make More from First Online Business

A business associate and I were speaking when he asked about my first online business, House Of Rave.com.

I told him I started it in high school and it had consistently made an average of $800 or more per month for the last 5 years, I don’t keep any inventory and all the shipping is done in California.

He then asked me, “Can you make more?” The answer was a simple yes. I spend less than 20 minutes a day on it, and if I spent a little time upgrading the whole operation, I could bring in about 50% to 100% more money. I know what works and doesn’t work with this particular business, I’ve just somehow always been satisfied with the money it brings in.

He told me, “This is low hanging fruit for you,” and that sentence re-sparked my interest in the business.

Over the month of September, I am going to enact the following items to improve the business:

-Add 1-800 number - I already have a VOIP phone for the business, so a 1-800 number is only $5 more per month.


Add my own pictures
-
I never see most of the products I sell, so I want to order select popular items for myself, take my own pics and write my own descriptions. I’ve done this before and it was very successful.

Make contact form – An online contact form would allow customers to ask questions without having to physically send an email with their own account.

Put tracking system on my own server -I currently have an order tracking system, but it is hosted elsewhere. Customers do not see it is hosted elsewhere, but it costs more money to host with someone else.

Get exchange server for mail - I use webmail for the business right now, so I cannot keep long term track of old mail/sent mail.

Offer Gift Certificates - My shopping cart software allows for gift certificates, so there is no harm in offering them.

New SSL certificate - I just didn’t want to pay for it, so the user-end shopping cart system has not been on an HTTPS connection for about a year now. I need to get a new certificate now as they are not expensive, and they give customers a better piece of mind.

Updates every three days - This rule would make me update either the main page or the blog at least twice a week. This lets users know there is someone on the other end.

These are just a few of the updates I am going to make. Hopefully within the next few months I can increase net profits by at least 40%.

Herb Kelleher

My attempt to crash the I C 2 Corporate Governance Conference was very successful.

I was tipped off about the conference by “Bob” on Wednesday night.

Thursday morning I whipped out my suit and headed over to the Barton Creek Resort and found the conference. Every single person in the room was either a CEO or member of a corporate board….and often times many boards at once. EVERYONE. In fact, “Regular” people weren’t even invited.

I purposely showed up 5 minutes late so I could rush in past the registration people. It worked. Everyone had huge nametags around their necks except me…..but it didn’t really cause any problems. I was spotted talking to some prominent figures, so no one questioned me after that.

I met tons of people there….and not ordinary people. When I asked “What do you do”…the typical response would begin with :
“I own…(insert big company here)
or
“I founded…(insert big company here)
or
“I am the director of…(insert big company here)

There were LOTS of very prominent figures present, but the most well known was Herb Kelleher, the famous founder of Southwest Airlines. I got to meet, talk and sit next to Herb Kelleher.

Not a very clear picture, but that’s Herb speaking.

Here is me (with the goofiest smile ever) with Herb Kelleher:

After he was done speaking, he sat down at a mostly empty table. I left my table and went to sit closer to Herb. I snapped this quick video to prove how close I was to him!

The rest of the speakers were great, but Herb was the BEST.

“Bob” and “Vinny” were both present at the conference. They are also both board members/CEO’s of very successful companies. I can’t give too much information about them, but both of them have companies undergoing extremely rapid growth. They are both very photogeneic:

The conference went from 10:00am till about 7:30pm. It was good food, good drinks, lots of mingling, learning and fun.

When I left, I couldn’t tell which car was mine. The Camry or the Mercedes SL500???

Well it’s Friday now. ‘Tis time to party!
-Nev

Corporate Governance Conference

My attempt to crash the I C 2 Corporate Governance Conference was very successful.

I was tipped off about the conference by “Bob” on Wednesday night.

Thursday morning I whipped out my suit and headed over to the Barton Creek Resort and found the conference. Every single person in the room was either a CEO or member of a corporate board….and often times many boards at once. EVERYONE. In fact, “Regular” people weren’t even invited.

I purposely showed up 5 minutes late so I could rush in past the registration people. It worked. Everyone had huge nametags around their necks except me…..but it didn’t really cause any problems. I was spotted talking to some prominent figures, so no one questioned me after that.

I met tons of people there….and not ordinary people. When I asked “What do you do”…the typical response would begin with :
“I own…(insert big company here)
or
“I founded…(insert big company here)
or
“I am the director of…(insert big company here)

There were LOTS of very prominent figures present, but the most well known was Herb Kelleher, the famous founder of Southwest Airlines. I got to meet, talk and sit next to Herb Kelleher.

Not a very clear picture, but that’s Herb speaking.

Here is me (with the goofiest smile ever) with Herb Kelleher:

After he was done speaking, he sat down at a mostly empty table. I left my table and went to sit closer to Herb. I snapped this quick video to prove how close I was to him!

The rest of the speakers were great, but Herb was the BEST.

“Bob” and “Vinny” were both present at the conference. They are also both board members/CEO’s of very successful companies. I can’t give too much information about them, but both of them have companies undergoing extremely rapid growth. They are both very photogeneic:

The conference went from 10:00am till about 7:30pm. It was good food, good drinks, lots of mingling, learning and fun.

When I left, I couldn’t tell which car was mine. The Camry or the Mercedes SL500???

Well it’s Friday now. ‘Tis time to party!
-Nev