10 Ways To Make More Money Than You Spend

At a young age of 24, I built up a business plan to create a chain of Chaitea stores called Chai Hut. My ambitious goal was to model after Starbucks and start with 4 stores. Then once the business was set and kinks worked out, I would start franchising. I set about trying to raise $1.2M to open these 4 Chai Hut’s. In that process, I ordered some tea products, visited trade shows all over the country, met with industry leaders, venture capitalists and SBA among other things. In 10 months I had spent $25,000 on my credit cards, had raised $0 and had sold one can of tea for $8.

My local gym trainer had seen the website I had built for Chaihut.com asked me build him one, for which he offered $100. I had paid my way through college building websites so I knew a thing or two about them. I took the money and built him a comprehensive site complete with a Paypal shopping cart. He then referred me to a friend who offered $500 to build her a custom site. One by one, I accumulated small clients, hired low cost developers offshore, always making sure to make the money before spending it. Today we work with several Fortune 50 companies and are yet to spend a dollar on advertising or marketing.

10 Ways To Make More Money Than You Spend

1. Figure out your best native skill set first. If you don’t have any experience running a tea business, go work at a Starbucks or a café for a while to learn how it works. Mine was technology, not restaurants.
2. Ideas don’t make a business. No matter what anyone says, unless you have earned a profit in a transaction, it’s not a business.
3. Don’t spend money incorporating or drawing up contracts with expensive lawyers for your business until you have found a customer and made a profit on a transaction. Prove the business exists first, you can always incorporate later.
4. Build a website yourself or find someone who understands your business to build it. Order some free business cards online. That’s all you need to really setup shop.
5. Tell all your friends and family about your business; find your first customer even if it means doing it at cost.
6. Build a 200% margin into your next deal. Put some money away every month from the profit into a savings account. Never change these two principles.
7. Before you spend money on any capital item, make sure you are generating revenue at 3 times its cost already. If not, then maybe you don’t need it.
8. Raise your prices. Compete on best in class quality and fanatical service. I tripled my prices one year, and my business doubled.
9. Build relationships. Word of mouth is free marketing and has infinite return.
10. Keep family involved. They should know when to spend the $1.

Gaurav Khandelwal is the CEO of ChaiONE.com, a leading web applications development agency in Houston, TX. He was honored on the top 40 under 40 for business leaders under the age of 40 in Houston in 2009.

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