214 - $150K in 3 Weeks Selling Christmas Lights—In August! with Anne McGinty

0:00Only three weeks of work, but we made$150 ,000. Huh? Wait, wait, wait, wait, wait. Okay, tell me the first five years worth of revenue for the Christmas lighting business. So year one, 150, what was year two? Plus to 300. Year three? 500. Year four and five? This is where my memory starts going. Seven, 50, 950. We really were just motivated by believing that our lives were worth more value than any job was willing to pay us and wanted to make more money faster. Truly. Did you do any email stuff, SEO? Yep. Oh my gosh. Just like, I can't not follow the rabbit down this hole.

0:44Tell me your background. Graduated from college in 2003. So went backpacking overseas for about a year and lived check to check. Came back, started a sales job selling toothpaste. that where where was this this was in the bay area okay and it was demoralizing great company but when you have a trunk full of toothpaste samples to give out to people and you're driving from san francisco down to santa cruz to monterey to fresno and back every single week it was brutal but i learned sales so that's what i got out of that job and sales is really just about making connections and getting to know people.

1:22And from there, once I realized that I could not make enough money in this full-time job to do anything because I was struggling to save money. It took me six months to save a thousand dollars. So what? Yeah. Because I was on, it was, it was a base salary of near 30 ,000. And then my bonuses got me to about 50 ,000. But when you live in the Bay area and you take out your health insurance and you take out your utilities and your phone bill and then you pay taxes. It really whittles down very quickly when rent is so high. So I took six months to save$1 ,000, was very happy and celebrated. And then I quickly switched and thought, that's ridiculous.

2:04Like how am I ever going to get ahead? And started a greeting card business on the side using my photographs because I had minored in photography. fee. So that I ran for a couple years, really only got to the point where it was making about $15 ,000 in extra take home profit a year. And I use that money to buy a property in Jackson Hole, Wyoming. So that property in Jackson Hole, Wyoming, I was$230 ,000. So$46 ,000 down, I sold it the next year for a$126 ,000 or$156 ,000 profit. So this was 2005, and that was a good enough down payment for the Bay Area. So I still had the toothpaste job. I still was doing the greeting cards.

2:57And I was also part-time working, interning between a newspaper and a photographer who was based in Marin County up in San Rafael, earning extra side gig money. So I was hustling. All of that. I was like just putting, and I was so good. Cause I went from backpacking where you're living check to check and on very little money. Like I was living off of bread, peanut butter and bananas coming to the Bay area. It was like a game to me. Like, how can I live the most fun life that costs the least amount so that I can save it so I can actually put this money to work. When we were first married, my wife and I went to Europe because we were like, well, if we have kids, it's going to be a long time until we can actually go to Europe.

3:38And we weren't there that long. We were there two weeks. But every hotel that we stayed at, we just like shoved our bags full of bananas and apples and the baguettes. And like that's all we ate. Free breakfast? Yes. Well, not only free breakfast. It was like free breakfast, lunch, and dinner. So I'm very familiar with the peanut butter bread banana diet because I live that diet. When you have to, when you need to, you do it. And it was honestly, it was fun. Isn't it interesting to like, you get to a different stage in life. And then those periods of time that just felt so hard. And they felt like, oh, man, I wish I was in name, whatever place that you think is better than where you are right now.

4:18And then you get to that place. Oh, cool. I have a I have a home or I have a second home or I have a business, whatever. And then you look back and you're like, man, I'm nostalgic for that time. It was so simple. It was so fun. Where did the hustler come from? Is that instilled from the family? Is it just you? I'm the youngest of four. And I think that I was born fairly happy. Like I just was happy, go lucky. My mom said that when I was very young, she would say, what do you want to be? And I was like, I don't really care what it is that I do as long as I'm happy and I'm having fun. Even now to this day, when a decision comes up, like, hey, mom, what do you think about this business?

4:56Or what do you think about this potential investment? She's like, look, you always said that you were motivated by creating a very fun life and you've done that. So just keep on going with, with that direction. I feel like the scene in stepbrothers when they go from hating each other to realizing they're, do we just become best friends? Yep. That's me. I, I was just born with like a happy demeanor. I just kind of have always had a positive disposition. I like to have fun. I like to have relationships with people. So anyways, I, I resonate. I resonate with that. Yeah. But the hustler part, I think the hustle part came from my parents because they were immigrants from the Philippines and they came over with$200 each.

5:37And by the time I was in middle school, they had about a dozen houses and they, yeah. And they had investments and they took us traveling around the world and they sent us to private school. So their life and their story was constantly told to me throughout my own life. And it really instilled this belief that you can make anything happen that you really truly believe you can. My dad's an immigrant. He's from, he's technically from Brazil, but he's Ukrainian. And I grew up really poor and we grew up with these really crappy cars, BMWs, Mercedes Benz, but they were always like salvage title, 20 years old.

6:13So it's like 1997. I'm driving around in a 1974 BMW four series that is like got three different color doors and a different color hood. And right. So I was like, dad, this is what are you what are we doing here? And it wasn't until I got older, I lived in Europe and realized, like, having one car, you're doing well having two car, you're like, wealthy. It's like made my dad feel good. Like, I have multiple cars, Nicolai. I am very, very successful, man. You're welcome. So after that first 150 grand that you made from Wyoming, Montana, wherever it was, what did you do? Were you still doing toothpaste at this time?

6:51No, I wasn't. What were you doing? We had started a Christmas light hanging business. Dude, I love you so much. Oh my gosh. All right. Did you still have the greeting card company? No, I just decided it was too much effort. I have a whole cabinet over there that is full of greeting cards for life. Good for you. But the Christmas lighting business, that's very seasonal. Why would you pick a seasonal business? That was kind of why we chose it because we both love to travel so much. So it was very motivating, the concept that you could make a year-long salary living in such a short amount of time.

7:33Yeah, it's interesting. So you're like optimizing for lifestyle. It's like you're like having these seasons of like, okay, I'll work really hard, but I know I'm going to sock away money here because I want freedom at these other times. I think that's a really interesting way to kind of architect it. How long did you do the Christmas lighting business for? We did that business for 13 years. Holy crap. Yeah, we sold it in 2020. You started from scratch? Yeah. It was such a gem. Really. Honestly, I would start that business again if I were that age. Because it grew so rapidly, we also chose a very high net worth area where we wanted to operate.

8:11And there is something to that. The houses are all right next to each other. so your efficiency is maximized because if one neighbor - They're pretty price insensitive. Insensitive, yes. And as long as you establish that relationship and there's trust and you do a good job, then it just repeats every year. So it's not like painting. You paint your house, you're probably not gonna get your house painted for another 10 years. With Christmas, it comes around every year. So video's cool, but I have what scientists call a face for radio. And so what's even cooler is long form audio via my podcast and my newsletter, nickonomicspod.com.

8:48Go there for free. Subscribe to my newsletter. It's one email per week. It's super tactical. And then go to my audio podcast. I do three to five episodes a week, depending on how curious I am. And it's stuff like this. It's all free. No sleazy sales pitches, nickonomicspod.com. Would you consider it a reoccurring business or a recurring business, right? Like a recurring business model would just be you're on a payment plan and every single month, right? There's that's SaaS, right? But reoccurring, obviously, is, oh, we call you when we need you. But there were some people who would automatically book the following season for the exact same day or timing.

9:18And they wanted to just secure that. What we ended up doing was because our season at the beginning was only three weeks of work. But we made about one hundred fifty thousand dollars in those three weeks. So for us, that first season generated or you or like net income made net income was closer to a hundred. but for us for me going from a selling toothpaste job at 50 000 a year to making my half of that was around you know 50 so making that in three weeks i just thought this we've got this so we we started pouring everything that we could into growing it turning it from a three-week business into a six-week into eventually it was a six-month business with six trucks six teams Six-month business?

10:06It turned into a six-month business, yeah. Why? Because we picked up really big contracts with amusement parks. We had a job that was out of state, which was, I can't tell you which location it was because there was an NDA on it. But these are amusement park-sized jobs, and they can take a month to install with our entire six-truck team. Oh, my goodness. These companies often set their budgets in January and they know they have all these seasons to get through. So there's Halloween. After Halloween, it pretty much switches to Christmas if you're in that business. Oh, yeah. So we actually needed to put the lights up before Halloween and just keep them off.

10:49So, yeah, we started installing in July. When the pumpkins start growing, that to us was our signal that Christmas was here. I'd like prepare for these interviews and I'm like excited to talk about certain things. I have my notes down and then somebody says something and it's just like, you know, I can't, I can't not follow the rabbit down this hole. I want to start with before the, the year that you launched it before you actually launched it, you guys have some money. Obviously you've got your, your place in San Francisco. How did you come across Christmas lighting? Why was that the thing? And, and this all kind of like happened really overlapping.

11:25So we sold, let's see, we sold that condo in 2007, but we started this business in 2006. But I had been selling toothpaste, right? And one of my coworkers was just joking with me like, man, we've got it so bad in this job. Our backs hurt. We have to sell toothpaste. And meanwhile, my cousin's down in San Diego. He's making six figures and all he does is put up Christmas lights for a few weeks of the year. And I was like, huh, that's interesting. and then Mark my husband was at Whole Foods handing out free toothpaste because I'd convinced him that he needed to like make a little extra cash and he was right next to another woman who was handing out samples and they were chatting and she said oh you know my my boyfriend's got it so much better than this he makes like six figures a year and all he does is put up Christmas lights So this was all like within two weeks that this happened.

12:24And I don't know, is that like the universe giving us a sign or is that a door that's just like, come this way? We talked about it that night and we couldn't stop going, what are the chances? Really? Like this stuff doesn't happen. Yeah. Like twice in two weeks. What? And that's why we started. So I think what's really interesting is I think that there are two types of people who get into entrepreneurship. I think there's type A, which is you that like, you couldn't do anything other than just hustle. Like it was always going to be something that you did, which is awesome. And then there's people who are more of the planners who are like, okay, I'm going to be strategic.

13:02I'm going to buy a business. It's going to be an existing business. You know, does it have a moat or is it sticky? What are the customer contracts like? Right? Like they're more of the thinkers. That's probably a little bit more for me just because it makes me feel safer for you, like your type, you're opportunists where you're like, oh, there's something there. Let's try it. Why not? Why the heck not? Had you and Mark talked about you wanted to do something entrepreneurial together? Or was this like, huh, I never thought about us actually doing a business. I've got this side gig over here. Maybe we should try it.

13:32Which one was it? We really were just motivated by believing that our lives were worth more value than any job was willing to pay us and wanted to make more money faster. So you had thought about doing entrepreneurship. It wasn't the first time you had ever like... But not because I wanted to be an entrepreneur or run a business. I just wanted more control over my time and money. And that was a way that I could do it. I'm not a career corporate ladder climber. I don't like being in office buildings. I like my freedom. I like sunshine. So flexibility, we kind of fell into it, I would say more than I had it ever in my head that that's what I was going to do.

14:16It was a belief though, that we could, a belief that we could make more money and create more time by chasing these opportunities. So a lot of people will talk about entrepreneurship and they'll say, Hey, if you're going to do something, you got to be passionate about it. If you're going to get into something, you got to like have a passion for it. Cause entrepreneurship is hard and you can run these businesses, yada, yada, yada. Did you have a passion for tree light or not tree lighting, but Christmas lighting? No, not at all. Do you ascribe to that? Like, Hey, you got to have a passion for it.

14:42Like, what do you think of that? I mean, I'm 43 now. So now I do have like a little bit more experience and knowledge. And I, again, if I were to start a business today, it would really need to be framed around what the goal was of the business. I, again, did not spend that much time thinking about this back then. It was really about money and time. But now I have a different perspective. So I don't necessarily think that you need to have a passion for it. I think I believe that is one avenue and it is a beautiful one if you can go that route and you get real purpose from what you're doing. But I also don't think it has to be that way.

15:23Like my mind generally thinks about how can I make money and do it in the shortest amount of time possible. I'm more of that type of an entrepreneur. But when I interview people, I am absorbing what they're saying. And I'm really impressed and just, I admire how other people have been more conscious about why they've started businesses, whether it's for a legacy, to give back to the world in some way, because they do have a passion in some related industry, but this is me learning alongside my listeners. All right, now's the part of the show where I feel the most uncomfortable, but my therapist says I need to face my fears.

16:05So here we are. I've started a newsletter and I want you to subscribe. And what you're gonna get every single week are the aggregated conversations from that week that I have on this podcast with an overview of what their business actually looks like. I'm also going to throw in a review of one or two businesses that are listed for sale. I'll give you my opinion on whether or not the EBITDA multiple is good or there's customer concentration or there's red flags or green flags. And then lastly, I'm going to give you one piece of actionable advice every single week on how to buy your first business.

16:32So click the link below, subscribe to my newsletter, and let's get back into the show. But this is me learning alongside my listeners. I land a little bit in the middle. I just think you need to have a clear why. Why are you doing it? Do you want to be rich? That's fine. Do you want to have control of your time and freedom? That's fine. Do you love health care? And you're like, I just want to have a really good health care company that provides really good service. Like, that's fine, too. You just have to know your why and then architect your opportunity towards that why. And I mean, that's what you've done, right?

17:03Yeah, I agree with you 100%. In your way, you've been intentional. It may not be in the same way that other people have done it, but you've been very intentional. Okay, so year one, you do$150 ,000. When did you guys talk about the idea and when did you launch? We talked about the idea. So those occurrences where they felt very serendipitous, like a bit of synchronicity. happened in July and we started the business in August. You're the best. Oh my gosh. This is so cool. We did not know what we were doing. Okay. Isn't that usually what happens? Yeah. I feel like you have to have a certain amount of naivete because if you knew everything you knew now, you're like, I probably, Oh man, I would not have done it that way.

17:44But you kind of need, you need that naivete to like get you to do the things. What did you think was going to happen? All right. So you launched in August. Did you think like, Oh, this could be a cool side hustle or like what was your goal for that first year? Our goal was as much as we possibly can because Christmas is not coming around until next year. So every time a day passed, if we didn't have anything booked, it was like, well, there goes November 15th because we're not getting November 15th back until next year. So it was really this chase. If a person signed up for it, they wanted the service.

18:15And I saw that we had a spot open the next day. I did a little bit of like sales hacking where I was just like, oh, we actually, we're going to be just down the road tomorrow. And we had a cancellation. We could go ahead and get your lights up. And in fact, this is in our early installation window. So you would get a 10 % discount off of labor. And they'd be like, oh, great. I'll take it. And I'm like, yes, job secured for that day. I just increased that J from being, you know, like a$1 ,500 day to a$3 ,000 day because I filled this time slot. Yeah. Did it cost anything to get started when you, when you launched in August, What were you guys thinking?

18:50It took about$20 ,000 all in. What was the$20 ,000 spent on? We paid for a course to get a shortcut on education, on how to do the electrical part, custom cutting things, custom fitting, learning what all the lights and supplies were, because we had such a quick turnaround with when we wanted to start marketing. Because you were going to be doing the installations too. Yeah, I did. I didn't do them all the time, but I was out there. I was out there on trees and ladders. If you did$150 ,000 and then$100 ,000 of that was net profit, you were probably doing a lot of the labor yourselves. Yeah. All right.

19:23So you took a course. Did you have to buy any equipment? Yeah. We bought ladders. We bought base supplies that you need for every job. Did you think about any insurance? Were you like, oh, we probably need to have insurance? I think we did get insurance. Oh, you did? Okay. We did. Yeah. That's shocking. We maybe didn't get the amount of insurance that we needed, and we definitely did not get workers' compensation because we didn't even know about it. So we got a box truck and some spray cans and we spray painted the name of our business with some home printed stencils. Like I like cut out the stencils and we taped them up and parked Presidio and just like sprayed our number and our name on there.

20:02And when we weren't getting jobs, we would park that box truck in the premium neighborhoods where we wanted to work. And it was like a billboard. It was like a moving billboard, but free. and it worked. You never got called. Nobody was like, Hey, tow this car. There's it's unsightly. No, because we would move it within 72 hours. And it was, it was tidy. Like I could send you a picture of it and it was, it was tidy enough. I'm not saying it wasn't tidy. I just know how those neighborhoods get sometimes when they're like, Oh, unsightly. This isn't a Mercedes. Like major intersections that we knew a lot of people drove up and over.

20:40We would try to park it right near that stop sign so that you literally like couldn't miss it. Okay. So tell me the rest of the customer acquisition channels. All right. So you had the van, you were like, we're doing this. It's decorated. We're going to call us here. How else did you acquire customers that first year? Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy, and money producing this podcast, interviewing these individuals and giving you insights into how to build, buy, start, grow your business. And you would like, subscribe, and leave me five-star review.

21:13Now, out of that, we both get to talk to really cool people and hear really cool insights. We both get a ton of value. But I just want to help you keep your word. So would you do me a favor? Will you go leave a five-star review for me on Apple or Spotify? It would really help. And if you want, even share this with a friend. We printed off ads on our home printer, like two to a page with a little elf tangled up in lights. And it was like, get your lights professionally installed and you get a discount if you do it before a certain date. And Mark and I just walked around the neighborhoods and just put these on doors.

21:48I get them sometimes at my own house for tree trimmers and things like that. And it brings back all these nostalgic memories that I'm just like, you know, that actually still works. We have a tree trimming business that I have. That's one of the channels that we acquire customers through is door to door. You have a tree trimming business? Yeah, it's not big. Like we, long story short is we launched a tree trimming business as a project to see if it would work and it worked. It's not massive. It's like a half a million dollar a year business, but it's been fun. Like we've learned a lot of things about home services in particular, like jobbers, the CRM that they use.

22:22How do we acquire customers? How do we use? Anyways, a million things. It's been a really good learning experience, but it's not, it's not a massive business. But it could be. Oh yeah, yeah. Totally could be. But you know, I've got ADHD. So of course it's not massive because nobody's focusing on it. anyways. Okay. So you had, you had flyers, you parked the car. What else did you do? Did you do any email stuff? SEO? Nope. Oh my gosh. Nothing. When you were doing this, cause I can, I can tell you're a hustler and you're a tracker as well. Like you want to see what works. Which of the two channels was the most effective?

22:55What was the, the box truck, but also those flyers did work for helping us get the initial prime sort of houses in the neighborhood. So it was a combination. But once we had the job and our team was there parked for four hours to get the job done, the neighbors would come out and see the truck and they would be like, oh, Sally is getting lights. So, oh, let me call this company too. We just really focused on customer service, communication, quality end result. If anybody had a complaint, we really listen to them. Well, and those neighborhoods are so nice. It's keeping up with the Joneses ask as well.

23:34It's like a little bit. Mark, Martha's put up her Christmas lights already. We need to get decorations going. I feel like you should do voiceover. I, I, I do. Here's my Donald Trump. You ready? Welcome to the Trump administration. We've got the finest people. It's going to be amazing. Or the best one I do is for my kids where, Gorsh Royce, it's time for bed. Oh my God. That's my goofy voice. I don't know what it is. I've always just loved mimicking people. My sister says, I used to walk around the house and just like repeating words over and over and over. Anyways, that's not the point. Here's my question for you.

24:13Were you sophisticated enough at the time to have different phone numbers for the flyer and the van? No. No. Okay, so you didn't necessarily know who was calling you from which source? No, and honestly, a way that we... You could say it was a failure. Maybe we should have tracked that data a bit more, but it didn't really matter to us. All that mattered was that our customers were repeatedly booking. So we were aiming for an 85 % retention rate. And as long as we were getting an 85 % retention rate, that to us was a signal that we're priced right and we're doing a good job. What's crazy to me is that you launched this business in August.

24:52It's a Christmas business. business. And so by, when are you done hanging lights and you take them down as well? Yeah. Yeah. Yeah. That was all part of the package. Nope. All included. Yeah. Okay. So, but you probably had all of your money by like the first week of December. I mean, you'd like to think so, but no, like people sometimes wouldn't pay on time. We would sometimes, the last date I believe we ever installed lights and over those 13 years was around December 17th. Wow. That's really late. It was really late. Okay. The point I'm making though, is that like the time between launch in August and like your business being done is like four months.