Many individuals believe that starting a business is a risky venture. If that business fails they have lost their monthly income and potentially their life savings.
Even ones that succeed can have an issue of getting the 80% to 90% of their revenue from just one customer. If that customer goes to a competitor, the company would be in financial dire straits. That why companies diversify away for dependent on one customer for a large percentage of their income. Most people would agree getting 100% of a company’s revenue from one customer is just plain foolish. However, many of us are dependent on one source of revenue for 100% of our revenue, because that source of revenue is our employer. Whether you are in business for yourself full-time or work for an employer, having multiple streams of income is a good strategy for your financial health.
Today we are going to talk to a Martial Arts 7th Degree Black Belt and a 20-year entrepreneur veteran with multiple successful businesses, Lou, Costabile. Let’s find out from Lou how we can create multiple streams of income for ourselves.
Alan: Hi Lou, it’s good to see you again. Lou and I have known each other for several years having met at the Waident Group’s monthly mastermind group.
Many individuals believe that starting a business is a risky venture. If that business fails they have lost their monthly income and potentially their life savings.
Even ones that succeed can have an issue of getting the 80% to 90% of their revenue from just one customer. If that customer goes to a competitor, the company would be in financial dire straits. That why companies diversify away for dependent on one customer for a large percentage of their income. Most people would agree getting 100% of a company’s revenue from one customer is just plain foolish. However, many of us are dependent on one source of revenue for 100% of our revenue, because that source of revenue is our employer. Whether you are in business for yourself full-time or work for an employer, having multiple streams of income is a good strategy for your financial health.
Today we are going to talk to a Martial Arts 7th Degree Black Belt and a 20-year entrepreneur veteran with multiple successful businesses, Lou, Costabile. Let’s find out from Lou how we can create multiple streams of income for ourselves.
Interview Questions:
Alan: Hi Lou, it’s good to see you again. Lou and I have known each other for several years having met at the Waident Group’s monthly mastermind group.
Lou: Great to see you again and it is nice to finally have spring in Chicago.
Alan: Lou, you have multiple businesses. What was your first business and why did you start it?
Lou: I’ve have been a Martial Artist since 17 years old and I’m currently a 7th Degree Black Belt. My instructor moved to the West Coast in 1996 and was offered an opportunity to purchase the company in 1999. So, I purchased the company and we trained at several Park Districts and at Motorola. So, in 1999 I set up a website and learned the business operations of it. The money wasn’t a lot, but it gave a taste of what it would be like to own my own business and I loved it.
Alan: How did your second business come about?
I was working full-time in sales for a IT staffing firm in 2001 and the business was doing well. I didn’t start out in sales but I found it came naturally to me as I moved into that role at the company. I was bringing 85% of their sales. My boss, the owner of the company shared he was planning to buy a new “million-dollar house”. I was excited for him, and asked “Do you think I’ll have a house like this one day?” He said, “No.” Not maybe, just no. That was the beginning to the end of our relationship.
In 2001 in a mid-year staff meeting my Boss said, “Although Lou & our Recruiter Brian have grown the business 20% this year, we are going in a new direction. I just stopped talking to him after that, and seventeen days before I was to get married, I was let go. I was stunned. I had poured my life into that business and felt this was not a fair reward. I ended up sending out 99 resumes, and was rejected 99 times.
I thought why not try my own business with a trusted Partner friend of mine in IT, and that is how ARS Technology Inc. (ARS) started in May 2002.
ARS is an IT consulting firm, focusing on businesses with our sweet spot being 20 to 100 employees. Firms with more than 100 employee’s firms usually hire their own IT staff. Companies with 20 to 50 employees need IT help one or two days a week, so our consultants work with multiple companies.
Alan: How many businesses do you have now?
Lou: I Own and Co-Own 4 businesses. In addition to the two above, I have a Chief Financial Officer (CFO) Mastermind Group and a YouTube channel, “My Car Story with Lou Costabile”. The CFO master mind idea in 2013 came from my wife at a lunch where she suggested I Lead / Facilitate a “Master Mind” Group. Most of my clients are CFO’s, so I called one of them and asked what they thought of the idea and would they host? She thought it is a good idea, and said yes.
The group is a way for CFOs to share and solve challenges and discuss new ideas with other top CFOs, and a chance to meet with others in their field in an intimate networking group of 15 of fewer people in the room.
The You Tube channel is the most fun business. I just love cars and this is an opportunity for me to share those unique cars with other car enthusiasts. I have over 1100 different car videos and the Subscriber base has grown over 100% in the last year. There are now over 33,000 subscribers on the Channel. In the long-term, I believe this business will be my largest revenue producer.
Alan: With so many businesses I’m sure you have multiple items that must be done, all competing for your time. How do you prioritize the different tasks?
Lou: The tasks are largely driven by the calendar. I like to keep in shape so the martial arts classes I Instruct are basically paid fitness class for me and forces me to stay in shape. If I do have a schedule conflict I can ask another Instructor to teach the class. For example, if I’d like to go to a car show, another instructor can instruct. The CFO master mind takes a full day and the first week of the month to get the message out to the CFO’s. The rest of the month is dedicated to ARS. The weekends and evening I go to the car shows.
I did want to bring up a reason why you should have multiple streams of income and that is that you never known when technology or the economy or something will affect your business. For example, with ARS, a client can grow and require a full time IT hire, or a project can complete and there is no more projects, or one of my Consultants can take another position and your revenue decreases. That is why I diversify.
The YouTube channel does not pay money until you reach 1000 Subscribers, but is growing and when I reach 100,000 Subscribers there will be sponsors interested in partnering too. I’ve started research and conversations with sponsors that would be interested in the Channel / show and am determine to take the business to the next level.
Alan: Is there anything you would have done differently if you were starting out in business now?
Lou: I would have started my YouTube Channel earlier. There would be more subscribers today if I had done that. Something to understand about every business is that there is a learning process. First, you don’t even know what you don’t know. Then you realize you know you don’t know. Then you become competent, and lastly / maybe you get to mastery level. As an example, I had done 250 videos before a Viewer said, “Hey, I wish you would have started this cars so I could have heard it.” What a great idea, and I never thought to do that!!!
Alan: What are the key insights you have learned from being an entrepreneur over the last 20 years?
Lou: Two things. Number one. Do what your “God Given Talent” is. If you do what you’re talented at doing, the work should come easier to you.
How to you find out if it’s your God Given Talent? You might have done well in a topic in school, or you can ask your mother, friends, and people who know you well you trust. I was great in speech class, and bad in science class. I had the ability to communicate verbally, so areas such as sales or instruction a martial arts class or being a facilitator of a Master Mind Group, and YouTube speaking was a good fit for me
Number two. You have to be determined (this can take about 2 years of dedication to start with). Once determined, you’ll get a bit of success. This happened to me in sales and the YouTube Channel slowly but surely started to get Subscribers. As the business grows you will gain confidence and you will grow as a person.
Here is the greatest challenges. You try something you’re not talented at you work very hard to make it work. So you get exhausted. And / or you give up because you don’t see immediate results, or worst yet, never try at all because of fear of being a failure.
Alan: Last question, and it will be the hardest. You have shot over 1100 videos. What is your favorite car of all time?
Lou: Actually, that’s easy. It is the 1966 Batmobile. It was that car that started my love affair with cars. When I was 4 ½ years old and watched Batman and he got in that car; that was it. That car was the coolest thing I ever saw. My love for cars continues today because of that car.