best ever real estate pro advice

JF950: Creating Your Internal Success and External Success and Fulfillment #SkillSetSunday

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They’re both necessary, and today you’ll hear how to create both. You’ll understand why there are internal and extra no goals and what the purposes of them are. Be nourished by this episode and start planning your future!

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Alison Cardy Real Estate Background:

– Founder and CEO of Cardy Career Coaching
– Runs an international career coaching team specializing in guiding people through career changes
– Author of Bestseller, Career Grease: How to Get Unstuck and Pivot Your Career
– Based in Arlington, Virginia
– Say hi to her at www.cardycareercoaching.com/

Click here for a summary of Alison’s Best Ever advice: http://bit.ly/2pmoQv8

 

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success advice from Alison Cardy

 

Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. This is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any fluff.

I hope you’re having a best ever weekend. Because it’s Sunday, we’re doing a special segment, like we usually do, called Skillset Sunday, where by the end of the conversation you’re gonna have a specific skill that you either didn’t have before, or you’ll be able to hone a current skill that you have, to make it even sharper.

What we’re gonna be talking about today is, as real estate investor we clearly have our quantifiable goals outlined for what we want to achieve for success, and what a lot of people might not have identified is the internal success, the internal scorecard. So yes, we will achieve our goals, because we are Best Ever listeners and we’re gonna listen and make sure that we implement that advice in action… But what about the internal success, and what about the stuff that matters most?

With us today to talk through how we can accomplish the internal success in addition to the external success that we’re seeking – Alison Cardy. How are you doing, Alison?

Alison Cardy: I’m great, how are you?

Joe Fairless: I’m doing well, nice to have you on the show. A little bit about Alison – she is the founder and CEO of Cardy Career Coaching. She runs an international career coaching team, specializing, guiding people through their career changes. She’s the author of the best-seller “Career Grease: How to Get Unstuck and Pivot Your Career”. Based in Arlington, Virginia.

Alison, before we get going on the internal success approach, can you give the Best Ever listeners a little bit more background so they have some context about what your focus is?

Alison Cardy: Definitely. As you mentioned, I run a career coaching team, and one kind of interesting back-story on me is I have two core values that are just so fundamental to who I am and I how I operate in the world. I really believe in honesty and I really believe in looking at reality and operating within reality. For the past eight years I’ve been running this career coaching business, with moderate success externally.

In terms of internally, we do a great job for clients, [unintelligible [00:04:34].24] happy, but I have really struggled for a long time with the idea of marketing, because it runs so counter to those core values that I held. I would tell it to people straight, and I would hesitate to put forth some kind of fantasy about how things are gonna be. As a result of that, banging my head against the wall about “Why am I not attracting more people towards my work?” and not hitting that external success right out of the gate (or even in a couple years in), I had to learn how to stay sane in the midst of not having those external successes.

What I really came to – and it kind of matches my personality – was how to have internal success and internal happiness. I’m curious to vet this against you, but I think sometimes the external result can be a little unreliable; we can get it some days, and some days we’re in the game, we’re trying, we’re playing on the card, and we don’t get it. So what I came to was how to find that peace and contentment, independent of the external result. Of course, we still wanna be striving to get those things, but there’s a place where you can be peaceful and happy, no matter what score the game comes down with.

Joe Fairless: Yeah, this is gonna be so helpful… I have seen with how I set goals; sometimes my goals will be in motion, so once I accomplish them, I’m like “Yeah, that’s good, but what’s next?” and then I immediately set up another goal… Which people say you should do, as far as setting up another goal, but I don’t take enough time to celebrate when I do accomplish a goal, and ultimately we’re on the journey to accomplishing goals much longer than we actually sit and take in the glow of accomplishment.

So since we’re on the journey to accomplishing it much longer, boy, this internal success dialogue and being okay with where we’re at is incredibly important, because ultimately that’s like 95% of the time when we need to have that in place, versus the 5% when we actually achieve the external success.

Alison Cardy: I love what you’re saying, Joe. Exactly! It’s kind of like “How can we feel successful all along the journey, before we hit the goal, while we’re en route, when we actually achieve it, when we’re setting the next one…? How can we have that inner contentment that’s not just reliant on that 5% happening, or living that 5% happy and then go back to the 95% of “Yeah, so I’m working for this next thing again, I’m not happy right now.”

Joe Fairless: Absolutely… So how do we do it? That’s the money question.

Alison Cardy: Definitely! Well, one of the strategies – I’ll share a couple – that is really helpful is to think about internal metrics of success. This is really common for sales people where you know “Okay, if knock on a hundred doors, I can’t expect or be certain of how many sales I’ll make, but I can know that if I do what’s in my control (knock on those doors) and I measure that and I track that, man, I can wake up the next day and knock on a hundred doors again, because I feel like I did what I can do.”

So in anything in what you’re working towards, if you can think about not just the external result, goal that you’re looking for, but also the mini process goals along the way that are within your control. It’s sort of like if you were an athlete and you’re training for the big game, you may not know that you’re gonna win the game, but you can work hard and practice, you can show up… That is within your control. So really focusing on what’s in your control, setting metrics against those internal activities, and then when you hit those all along the way, which you will do en route to your goal, give yourself a pat on the back every single time, and know that “Okay, I’m doing what I can do. I’m being a success no matter what happens.”

Joe Fairless: Yeah, those mini process goals – I love how you phrased that, because I recently had someone ask me “How do you measure success on a daily basis?” and it really is identifying your large long-term goal, but then having these, as you said, mini process goals that you know when done tie into the longer term goal.

The beauty of the mini process goals and they key is, I believe, identifying what is effective action for the mini process. Because if you’re doing mini process goals and the mini process goals are not effective, then you’re not gonna reach your long-term goal. But if you know what is effective, then you simply don’t focus on the long-term goal, you just focus on the things that you know are proven to get you to the long-term goal. In that way, you don’t feel let down every day when you don’t get the long-term goal; you actually feel uplifted, because you are doing these mini goals that lead up to the long-term goal.

Alison Cardy: Exactly. And I’ll just build on that with one other concept, which is the difference between commitment and attachment. Commitment to a goal is “I’m gonna work on this and I’m gonna do whatever it takes to get there.” This is more for that bigger long-term goal. Attachment to the goal is “It has to happen this way, at this exact time.” There’s a difference between commitment and attachment, and I think a lot of times where people create unnecessary strife for themselves is when they get so attached to a particular, specific vision – “It has to be this way, it has to be at this time” and it shuts off to other possibilities.

A better philosophy is commitment, which says “Okay, I wanna get to this end result, but I’m open to finding a better mini process goal if this one’s not working” or “I’m open to switching things up to get that final goal, so that I can actually be effective” versus being so attached and grasping to “It has to be my way, or else…”

Joe Fairless: Wow… I can tell you that directly applies towards multi-family syndication. I have clients I work with, and the very first thing that we do is we outline what success looks like for our time together… And I’m gonna start talking about the commitment versus attachment approach, because what I found is when we set a goal, let’s say a thousand units in five years – we wanna control a thousand units in five years, so maybe they wanna do five syndications in five years, 200 units a pop… There are multiple ways to approach it and accomplish that.

For example, they could raise all the money themselves and be the only general partner. If they were attached to that goal, then that’s how and only how they would think. However, if they’re committed, then perhaps there’s other ways to accomplish it, which I’ve seen in what I’ve done with people, and that is they raise money for my deals, and they’re out of the gate much sooner and they’re able to accomplish it much faster… But it’s not what they initially thought the process would look like.

I’m gonna think about that for my own stuff, too… My goal is to control a billion dollars by my 40th birthday, and I’m gonna just let that float, versus be attached to a certain amount of units or any number of ways. So the question I have for you is how do you know what is too vague — because you have to have a vision, so how do you know if you’re too vague with the commitment?

Alison Cardy: I think that the goal is pretty easy… I would imagine for you, Joe, you’ve set goals before, this is how to define it, how to be really clear about it, so I would agree – you need to be clear on what you’re trying to get to. I think the place that can be either so binding for people or freeing is the path to get to it. So if they think they know the way to get to it, or if you think you know the way to get to that goal, then you’re gonna only see certain opportunities; you’re only gonna go in the direction that your brain already is familiar with.

But if you see that goal and you say “Okay, I’m committed to this. I’m gonna work on it, I’m gonna do whatever it takes, I’m gonna get this goal, but I don’t really care how I go about doing it. It doesn’t have to be my way, or a way that I’m familiar with…” All of a sudden, it frees your brain, it opens up your brain to see so many more possibilities that may make the achievement of that goal much easier than if you just kind of have your head down and saying “Okay, this is how to do it.”

Joe Fairless: It makes sense. I think going back to what we were talking about earlier – the mini process – I think that the key with the mini process is knowing that the mini process goals that you are creating are effective. Do you have any tips for how we identify if what our mini process goals are, if they are actually being effective or not?
Alison Cardy: That’s a good question.

Joe Fairless: Or even how to pick the mini process goals, the approach we should take to the mini process that you mentioned…?

Alison Cardy: Yeah, I have two thoughts on it. One is if you can connect with somebody who has done what you’re trying to achieve – obviously, for people who are getting into real estate investing, if they were to connect with you, then that person’s gonna have more of a vision of how that landscape works and what’s gonna be effective.

I think finding somebody further along who can help you to identify the most effective process goal is really valuable, more so than people realize. Because it is tricky to know what’s gonna be effective or not, and somebody who has that experience and perspective can say, “Hey, did you ever think about doing X? That’s gonna get you really slow results, so you should probably think about Y.” So that’s one thing.

Another thing – there’s something to being open to trying and learning, and as I mentioned in the intro, being open to reality. If you’re trying something and you give it a period of time – I’m not sure of the exact timelines for your industry, Joe, but if you think about “Okay, I’ll try this for a certain amount of time” and you look around and say “This isn’t working… What can I do differently?” Sometimes you just need to try things and see, because even with an expert, things are gonna work differently for different people, they’re gonna bring different strengths… So kind of being open to trying and know “Okay, part of the process is figuring out which is gonna be most effective for me.”

Joe Fairless: Makes complete sense. When you looked at the type of psychology shift that you made from — first off, how did you come across this shift in psychology? What was a tipping point for you and how did you come up with the commitment versus attachment and the overall internal success approach?

Alison Cardy: I think I’m just naturally very internally focused. I’m an introvert, and that’s where my brain goes. If you were to look inside my head, it’s very much in order, it’s very calm… I just don’t know where I put my focus. So I came up with it because many times I would get attached to a goal – “It has to happen like this” – and it was so painful to me when I’d have that goal and I wouldn’t hit it. I was like “There’s gotta be a better way”, as opposed to just driving myself crazy with having a fantasy of how the world should work and then being disappointed when it didn’t follow my dictatorship exactly the way that I wanted.

So I think it was some of those experiences, and then also just having that idea that there are certain things that I can control, and there are certain things that I cannot control. Why don’t I put all my intention on what I can control, and really focus on that? Because that’s gonna be a lot more helpful.

Joe Fairless: Easier said than done. I love that philosophy. It’s something that we have to continually and consciously practice, the focus on what we can control versus what we can’t… Because uncertainty is no fun, that’s for sure, unless we embrace it and we get used to it. That’s also what we’re talking about – uncertainty. Because this is a solution to being uncertain – focus on what you can control, yes, but then also more tactically speaking, what you said earlier with the mini process goals. That way, when there is uncertainty about “Am I eventually going to have a profitable real estate business? Am I eventually going to have leaps and bounds growth?” Well, I know that’s uncertain, but I’m going to focus on these mini things that will equal success when I do them.

Is there anything that we haven’t talked about as it relates to the question of “Okay, we’re not getting the noticeable external success. How do we have internal success?” – anything that we haven’t talked about that you wanna talk about?

Alison Cardy: Yeah, well I think there are really five characteristics, and I’m sure at least we’ll evolve a bit over time… But five that really come to mind for me as to how you can be internally happy in the midst of external uncertainty, which – that’s life. [laughs]

Joe Fairless: Yup.

Alison Cardy: Indeed, that’s life… Unfortunately. So I think the five characteristics – and we’ve hit on some of them… One is – and we’ve just talked about it – clarity on your locus of control, and good boundaries. If you get really good at knowing what’s yours to take care of and what’s other people’s, your life will change. So that’s one thing.

Another thing is having your brain be your friend. If you think about the internal dialogue in your head that we all have, we want that internal dialogue to be – and this may sound a little cheesy – unconditionally loving. We want that presence in our head towards ourselves, and then also towards others; that leads to a lot of happiness, when there’s a kind voice in your head.

The third one is a focus for your brain. I think this is what we were just talking about – having a goal and a purpose, something that you’re working towards, focuses your brain. It’s very healthy, very helpful. Of course, as we just mentioned, we wanna focus on that goal without attachment to how exactly it’s gonna happen.

The fourth characteristic is to rely on internal metrics for measurements of success. “Okay, I’m doing what I need to do. If I’m doing that and I pat myself on the back and feel proud of myself, I can get up and have fun tomorrow.” There’s plenty of work to do in the world, there’s plenty of time to do it, so you might as well enjoy it.

The last characteristic of internal happiness is to prioritize your own personal well being. You could have great purpose, you could be clear on what’s yours, and if you ignore your own health, your own relationships, your own need for rest, you’re not gonna be happy. So it’s really important to take care of yourself in the midst of your journey, as well.

Joe Fairless: Number five tends to be neglected, from my personal experience with people I interact with, and myself included. It’s also surprisingly — it can be the most challenging thing to convince entrepreneurs and real estate investors to do, because they’re focused on the business and they’re not necessarily focused as much on taking care of themselves and having some time for themselves. How do you prioritize your well-being as an entrepreneur?

Alison Cardy: In my life it’s definitely way at the top in terms of taking care of health and the people in my life who I care about, and making time for them. I do it with habits – straight up habits. I think too often people think “Oh, I need to have discipline to eat well, to exercise or to make time for loved ones”, and I would say – this is actually something from Gretchen Rubin… She says, “No, you don’t want discipline at all… You just want the habit in place to actually have your life run that way”, because a habit means it’s running on autopilot; it’s like brushing your teeth – you don’t think about how to do it, you don’t think that you have to do it, you just do it, hopefully.

So the one I would recommend for people if you’re having trouble with this, is don’t take the whole “Okay, I wanna be a healthy, zen person” – don’t take it all in at once… This is my favorite thing to do: just try to do find one little tweak, one small area where you could build a better habit. It’s gonna be different for any individual, but honestly, I believe anything in your life will improve if you give attention to it. So take ten minutes and just look at your life and say “What is one way I could take care of myself better?” and have a habit of it, not just a one-off. “What is one little piece of time in my day that I could tweak and put in something that I enjoy, or that takes care of me, or that feeds me?”

Find it, and then focus for a period of time on actually following through on doing it, make it a priority, and eventually it’s just gonna go into autopilot and you won’t have to think about it; then you can add another one. So don’t do all of them at once, but just find one little tweak that would be prioritizing your well being, and make a little time to try to add that in.

Joe Fairless: There is a talk that Oprah does at the Stanford Graduate School Of Business, she’s being interviewed… I recommend Best Ever listeners go look it up; just search “Oprah Winfrey take care of yourself.” She talks about the importance of just that – taking care of yourself. It’s basically like the plain analogy with the mask – you have to put the mask on yourself first, so you can actually allow your kid to survive, because if the kid doesn’t get it on, then you don’t get it on and you both die. So if’s just a matter of taking that approach, and it’s a tough one for people who are maybe psychologically stable; it’s tough initially, but once we think about the importance of “Okay, we take care of ourselves first and then we can add value to the world on a much greater level than if we didn’t take care of ourselves.”

Alison Cardy: Yeah, I’m gonna check that out. I haven’t seen that particular one. But I’d also add a perspective for people – right now, your goals, your dreams, they feel so important and so urgent, and we need to get them… And if you think about it, a thousand years from now it’s not gonna matter that much. Or even if you think till the end of your life – is it gonna be so important that you hit a milestone by one point, versus a little bit later? That’s not the best for your audience, but just if you take a longer-term perspective, we may as well enjoy our life, we may as well be happy and healthy. Why not? It’s life, it’s the only one that we have, we should enjoy it.

Joe Fairless: I love the perspective, it’s true. There’s very few people a thousand years from now who… Let’s just do this – a thousand years ago there were very few people who we still remember, so the odds are we’re not gonna be one of them. Maybe we are… [laughs] But I think that puts things in perspective.

Well, thank you for being on the show, Alison. Where can the Best Ever listeners get in touch with you?
Alison Cardy: Sure. Our career coaching website is CardyCareerCoaching.com. I am so in love with this kind of authentic happiness thing… I work with just a few select clients on figuring this out, so you can always e-mail me at alison@cardycareercoaching.com if you’re intrigued and wanna implement this in your life.

Joe Fairless: Alison, I took away a lot from our conversation, and I’m sure the Best Ever listeners did as well. This is a challenge that we come across regularly, which is “How do we remain sane when not having noticeable external success?” The solution, as you talked about, is the mini process goals or tactics or actions… Mini process actions, where we take action on a daily basis, and by taking that action we feel that we’re successful because we know if we do it over time, then it will lead to the large results… Maybe not in the exact form that we have visualized, but since we will be committed, not attached to that, we’ll be okay with it, because we’re going to go towards the ultimate vision and not necessarily the exact methodical nature that we have thought about… Because things change, and we have to adapt to how they change.

Thanks so much for being on the show! I hope you have a best ever weekend, and we’ll talk to you soon.

 

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best ever real estate pro advice

JF949: How to Make GUM BALLS Pay Rent #SituationSaturday

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Gumball machines, you’ve seen him and they never disappear… Our guest has made big capital, OK well residual capital, on these quaint little machines that spill quarters. Hear what else he does and why he got into vending.

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Matt Miller Real Estate Background:

– President and Founder of School Spirit Vending, a franchise company
– School Spirit Vending has raised over $4 million for education since inception
– They have a profitable business system for professionals looking to develop secondary income streams
– Formerly an Air Force pilot and advertising executive
– Based in Kingwood, TX
– Say hi to him at https://ssvbusiness.com/bestever 

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Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today – we are going to be talking to an expert in a space that – my gosh! – after about a thousand episodes, I’ve never talked to an expert in this space… Vending! Yes, vending. How does that relate to real estate? Well, there’s some passive income opportunities and it’s an intriguing business model, so we’re going to talk about the ways we can make money as a vending machine investor, and how our Best Ever guest today has done that. How are you doing, Matt Miller?

Matt Miller: Joe, I am doing awesome, thanks for having me on.

Joe Fairless: Nice to have you on the show! Because it’s Saturday, we’re doing this special segment called Situation Saturday. We’re gonna do a hypothetical scenario where we want to create income; we’ve seen vending machines around – clearly, everyone’s seen a vending machine – but they take nickels and dimes and quarters… And clearly there’s a way that you’re making money, because — a little bit about Matt… He has raised over four million dollars in this business.

He is the president and founder of School Spirit Vending, which is a franchise company. They have a profitable business system where they work with investors who want passive income. They are based in Kingwood, Texas, and he is a four-million airforce pilot and advertising executive.

Before we dive into the scenario, Matt, do you wanna give the Best Ever listeners just a little bit more about your background and your focus?

Matt Miller: Yeah, Joe. I went to the Air Force Academy for college. Like you said, I was an airforce pilot for nine years; along the way I figured out that I really didn’t like being told what to do, so as soon as I could get out of the airforce, I did.

I thought the corporate space would be the answer, and worked there for almost a decade, but along the way I learned that the rules were always changing and they never seemed to be in my favor. I kind of got sick of being at the whim of decisions that were being made by others, that I had no control over. So I started doing some stuff on the side business-wise, I collected aluminum cans for a while, sold books on Amazon – my garage looked like a library at one point in time – but I’d read Robert Kiyosaki’s book, which I’m sure you talk about on your show and many of your listeners have read, and I bought into his whole idea of passive income.

So I was looking for a way to not just make side income to help pay the bills, but to make it passively and in the process develop more control over time for my life and be able to better provide for the family. I had a good friend of mine from church who on Sunday mentioned a gumball machine that he and his kids had bought, and had placed it in a local area business, and it was a business they could do together as a family; they were making a little bit of money, and it was something he could do with his kids.

I remember that conversation, and even though gumballs are a quarter, I quickly realized that the markup on them is over 1,000%, and that it would take a lot of gumballs for me to free myself up from what I was doing full-time – because we had a family of five at the time – but it was something I could do on the side. The machines did all the selling once they were placed, and it allowed me to continue to pursue my career, while building this business on the side.

So that’s where my start occurred in vending, about 13 years ago, in that position.

Joe Fairless: Now let’s talk through the situation… You’ve been exposed to the world of vending from the friend you know at church; he told you about the gumball machine… And I’m asking you about your story, because I’m sure a Best Ever listener who has their curiosity piqued as a result of our initial conversation, they’re gonna want to hear how you did it, so talk us through from that first conversation with that person at church – where did you go from there?

Matt Miller: I ended up finding a Yahoo! Group – which today I would liken it to a podcast like yours – where I was able to learn.

Joe Fairless: What year is this?

Matt Miller: This would have been about 13 years ago, so in the 2004 timeframe or so. We were in a really bad place financially at that point, and I found a  Yahoo! Group that I could plug into and kind of be a fly on the wall, because I didn’t know a whole lot about vending at all.
I also bought a couple of eBooks on Amazon, and kind of studied the industry. And it just so happened that I hopped on eBay and found a used candy and gumball machine from a guy across Houston for about $36, and I didn’t even have to pay for shipping because he was local.

I won that auction, loaded up a couple of my kids in our ’98 Honda Accord and drove across town one Saturday to pick that machine up. He taught me a little bit about what he had done and gave me some more insights.

We stopped by at Sam’s Club on the way home to pick up the gumballs and the candy for that machine…

Joe Fairless: What did he tell you in that initial conversation?

Matt Miller: He had done a lot of work in local bars and local restaurants and had done pretty well for himself, but he just decided that this really wasn’t for him and didn’t have the time to do it, so he was looking to get out… So he sold me his equipment for next to nothing. In fact, I could have turned around and resold that machine for twice what I paid him for it, so there was really no risk from my part.

But the biggest thing I learned is you gotta get out there and you gotta be willing to knock on doors and spread the word about what you’re doing, and to not be judgmental or prejudge any locations. Because what many of us might think is a great location often times isn’t, and what many of us might not see as an opportunity for a location is.

What most people don’t realize is if you were to put a video camera on a vending machine, in many cases it’s the employees in that location that drive the revenue, it’s not the customers that come in and out, often times… Especially when you’re talking candy and gumballs and that type of thing. So it doesn’t have to be a super high traffic place in order to have a successful location.

In fact, some of my most successful locations were actually break rooms in local area businesses where the public never even realized that the machine was there, but the employees went there for their breaks or for their lunch every day, and my machine ended up becoming a part of their lunch or their break every day, because the candy and the gum was right there and readily accessible.

Joe Fairless: What’s the incentive for that store to have the thing in the break room?

Matt Miller: There’s a couple different types of vending. We call what we do bulk vending. There’s the charity route, and then there’s essentially the revenue share route with a location.

When I was just doing simple candy and gumball machine, it was a charity angle. I worked with M. D. Anderson’s Children’s Cancer Hospital down in Houston, and a portion of the proceeds were donated to them.

Joe Fairless: What portion?

Matt Miller: Yeah, the location didn’t get any financial value, but they were given a foot-by-foot square foot space to benefit the hospital. I gave 10% of the revenue to them. There’s some charities where it’s just $1/location/month. So depending on what folks look into and decide who they wanna partner with on the charity side of things, it varies somewhat.

Joe Fairless: And is that the honor system, or do you submit financials to them every so often?

Matt Miller: It is purely the honor system.

Joe Fairless: Okay. Help me with the timeline or the progression… You started with one gumball machine, you put it where, and then where did you go from that point?

Matt Miller: So I went door-to-door… I just literally would go to a strip center and hit every business in the strip center. My first location was a karate studio in Kingwood where we were living at the time, and I set it up there. I waited a couple of weeks before I did anything else, because I’d never used these machines, my kids had never used them before… So I was like, “Okay, really? Are there people really putting money into these things?”

After two weeks I was chomping at the bit to see if this thing actually works. So I went back on a Thursday night, kids everywhere in the place for karate class, put the key in, and quarters spilled out of the machine all over the floor. I was like “Holy smokes! I’m onto something.”

Well, I took that money and was able to reinvest it into another machine. The guy that I got that first machine from had I think 19 others, and if I was willing to come back over the next couple of months to buy them, he’d sell them to me at the same price, he wouldn’t have to list them or ship them or whatever. So I went back a week later and had money for a couple more machines, and I just slowly cash-flowed this thing, because I didn’t have any other money at all to do it.

So once I got that machine, then I went out and knocked on some more doors to place the next one, and knocked on some more doors to place the next one.

Joe Fairless: When you knock on the doors, someone answers, what do you say?

Matt Miller: “I own a vending company here in the local area. We work with M.D. Anderson’s Children’s Cancer Hospital, helping them raise money. I’ve got a small candy and gumball machine that looks like would fit perfectly in that spot right over there, to the left of the cash register. I was wondering if you guys would be willing to support M. D. Anderson and let us place a machine.”

Joe Fairless: Okay, that makes sense. In that scenario, the store owner does not get a cut of the proceeds… Is that correct?

Matt Miller: Correct. Just to give you an idea, in that scenario, a typical machine is gonna make $15-$30/month. So if you’re giving the owner a cut, you’re giving him next to nothing. Now, if you venture into toys and temporary tattoos and stickers and that type of thing – which I eventually started doing as well – the revenue can be significantly higher for a location like that, especially a restaurant or that type of thing, to where now it is beneficial to have the owner involved and to cut them a check each time you come in. But with a candy or gumball machine the revenue numbers just really aren’t enough for them to get excited about it.

Joe Fairless: In that scenario, “I own a vending company. We work with ______ Kids Hospital. The gumball machine could fit right there… Is that okay?” In that scenario you’re making 90%, the hospital is making 10%, and the store owner is benefitting because there is another amenity that they have in their store to maybe make the experience better.

Matt Miller: Right. In the revenue share model, typically people will pay 30-35% to the location. Sometimes it’s revenue, sometimes it’s profit, depending on how the vending operator sets things up. They’re renting the space, essentially, and they’re setting up, in most cases, an entire toys and temporary tattoos and stickers and maybe some candy and gumballs… Typically it’s on a rack, like you’ll see at the local Wal-Mart, or whatever.

The vending operator’s job is to come in and to merchandise and to change up the merchandise on a regular basis, keep the machine clean and full. Every time they come in, they’re cutting the location a check based on the revenue that’s in the machine. The revenues are typically quite a bit higher for that type of setup in the right location, but there’s significantly higher investment in the equipment, to where some of the setups I had were $8,000 or more, when you factor in the equipment, the products of inventory, the machines and that type of thing.

Joe Fairless: How do you reimburse – if you do at all – for the electric, if you have to have a machine plugged in.

Matt Miller: None of our equipment has any electricity involved at all.

Joe Fairless: The toys and temporary tattoos – they don’t need that… So you start out with one gumball machine in the karate studio, you progressed from there… What was the tipping point?

Matt Miller: Within a year or so I got to about 125 locations all around the North side of Houston, and I was pretty stoked because I was making about twice in my vending route as I was working full-time, and I was able to do it on weekends.

Joe Fairless: A hundred locations with primarily gumball machines?

Matt Miller: Well, by then I had ventured into toys and all that stuff, too. So about half the locations were candy and gumballs, and then the other half was toys, temporary tattoos, stickers, that type of thing.

Joe Fairless: And for those 100 locations with that make-up, how much money is that a year?

Matt Miller: I was bringing in $4,000-$5,000/month, so 45-50k is what I was bringing in, just working a couple days a month. Then ’07 and ’08 hit in the middle of all that, and the revenues dropped off because people were hurt by the economy and weren’t frequenting a lot of the businesses where I had my equipment, so I was frustrated… Right around that time I had a bunch of young kids come knocking on my door, selling me stuff for the local school fundraisers.

I thought that was odd, because their parents weren’t with them; they were strangers to me, so they were essentially going door-to-door to strangers’ houses raising money for the schools, and I had kids of comparable age at the time. So that concerned me number one, but number two, because of the change in the economy, I was looking for a better way to stabilize what I was doing, and the whole idea of school mascot stickers and sticker machines in schools came to me around that point.

That’s where the whole idea of school spirit vending, which is what we do today – helping schools fundraise across the country with our franchise program. Initially, it just came from necessity on the revenue side, and like I said, getting some kids hopefully off the street by taking some of the fundraising in the school, instead of out into the neighborhoods.

Joe Fairless: And that’s your business model now, primarily?

Matt Miller: Correct. We work with busy families, professionals who are already doing extremely well in their career, but who are looking to diversity outside of that, and we show them how to do what we do in and around schools in their local area, and it ends up creating a win/win. They have the ability to develop a side income, much like real estate, with a very limited time commitment, but extremely high cash flow, and it also benefits local area schools because the schools now become that charity beneficiary with our program, and it gets some kids off the street. And because most fundraisers in the schools require volunteers, it’s a huge win for the school because we don’t require any volunteers for our program.

Joe Fairless: Basically, you’re selling custom stickers with the school’s mascot in the school, via a vending machine; the franchisee owners are responsible for getting the sticker machines inside the schools and collecting the residual income?

Matt Miller: Correct.

Joe Fairless: Out of all the different types of vending machines, why did you land on this one? Is it the most profitable?

Matt Miller: It’s definitely not the most profitable. First off, I don’t have a mechanical bone in my body. I flew the second-largest airplane in the world (the C5), but I still don’t know how to change the oil in my car… So I was looking for something that was very simple to operate. The reason why I went towards stickers is real simple. If you’re vending toys and you came up with a great idea for a new toy, it would take six months to a year before you had that item in your machine, because you’ve gotta send it to China and you’ve gotta go through all that process… Then, of course, you’ve gotta buy a container-full to ship that stuff back, in many cases.

With a sticker, you and I could come up with an idea right now, that sounds like a great idea. We could have a designer working on it later today, have designs within a week, and potentially could have that printed and in our machines within a month to a month and a half. So we are very fleet of foot because we’re just printing on paper, and that can all be done here in the states.

The other thing is the fact that a box of stickers is really not a whole lot bigger than a shoebox, just a little bit longer. At the time I had that ’98 Honda Accord I talked about early on… I could carry enough product in my Honda Accord to service 20-25 schools. Contrast that with the toys and all that that I was doing at the local area restaurants and all… I’d need a cargo van, if not a box truck to have a route of any significant size. At the time, I just didn’t have the money for any of that, so I had to get creative with what I did have, which was a Honda Accord.

So in fleet of foot and just the size of the product were the two main factors for me in going that route.

Joe Fairless: Interesting stuff, definitely. I love talking to entrepreneurs who have other businesses where they raise money and work with investors to provide them a passive stream of income. Really quick, how do you structure this legally? Do you have to do a private placement memorandum with investors?

Matt Miller: Up to this point in time it’s just between us and the franchisees. We are talking about some ways of working with private investors to produce a pool of money to allow our growth to occur even more quickly, because one of the points along the way where growth is sometimes stunted with some of our franchisees is on the capital side. We haven’t done that up to this point, but there is a big desire for more growth, and there’s tons of schools out there that we’re not working with yet, and it’d just be a matter of having the capital to put the equipment out there.
I think that’s a route we’ve been talking about pursuing here in the coming year to enable our franchisees to put this together more quickly. In that case, yeah, we’d have some sort of PPM for sure, and work out some sort of an investor arrangement from there.

Joe Fairless: Matt, where can the Best Ever listeners get in touch with you?

Matt Miller: Joe, I wrote a short eBook called “Live Your Dreams: The Top 10 Reasons Why You Should Own A Vending Business”. From a real estate side or from just a professional side, it highlights a bunch of things that most have never thought of in relation with vending. I’d love for your audience to have and download a copy of that for free, if they like. They can go to ssvbusiness.com/bestever and download that for free. They can learn a little bit more about the vending business itself. If they wanna talk about the franchise, we can do that, too.

Joe Fairless: Well, that will be in the show notes link, I’m typing it in right now. Matt, thanks for being on the show, sharing with us a business model that I wasn’t familiar with — well, I was familiar with vending machines, but I hadn’t talked to anyone who was doing it full-time, so thanks for sharing that.

Best Ever listeners, there is an apples-to-apple comparison for one thing in particular that Matt was talking about in terms of vending machines and real estate, and that is when he talked about how he got started knocking on doors and he said, “I own a vending machine company. We work with XYZ Children’s Hospital. We’re donating some of our profits to them” and he went into his pitch.

There is an interesting aspect of that where he immediately had some credibility with that company, with the people who’s doors he was knocking on because he’s partnering with an entity that they recognize already, and it’s an entity that they would want to help out. As real estate investors, we can do something similar by partnering with other nonprofits locally, donating a portion of our profits to them and then all winning along the way.

I can tell you I’ve done that personally with a lot of scholarships that I’ve created through Texas Tech, as well as some other things with Junior Achievement, where all the profits from my books go to Junior Achievement to help underserved kids in communities. It’s a great way to 1) give back, but 2) it’s a great way to get additional exposure and build your business, because you’re able to be associated with a larger association that everyone recognizes, even if you are just starting out. So that’s a takeaway, for sure.

Matt, thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Matt Miller: Thanks, Joe, and God bless!

 

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