Bully One said, "What's that?" I said, "It's a wagon, duh." What's in the wagon? I said "Newspapers." Bully Two lifted the side of the wagon and tipped it over. Bully One said, "Not anymore." I charged Bully Two and tackled him to the ground. We wrestled. Soon, Bully One was kicking me in the side while I continued to wrestle Bully Two. I was being beaten up. I was twelve years old, delivering the Cleveland Press to fifty customers on my street. It was the day before Halloween, 1966.
Fortunately for me, we were almost in front of my house. My mother suddenly appeared on our porch, yelling for the boys to stop. They did not. She, the former Ohio University Powderpuff football champion running back, leaped from the porch with a broom in hand and charged. As it was Halloween, the leaping woman, broom in hand, fit well with the decorative spiders and spiderwebs. Both bullies scattered at the sight and ran away down the street. We hugged.
That dramatic story is the lead-in to a business story. That paper route was the worst business ever. I delivered 50 papers six days a week along our mile-long suburban street. On Sunday, I collected 45 cents from each customer. My net profit, including tips, was about $5.00. I earned almost $1.00 an hour. Minimum wage was $1.25 in 1966, going to $1.40 in 1967. But hey, I was 12. This story is about cross-selling, although I certainly did not know that at the time.
I helped my grandfather paint one side of his house every year. I painted our family's garage. Then I went to my newspaper customers and offered to paint their garage. I charged $25 for a two-car garage, less than half what a professional would charge. They bought the paint. Each garage took a full day. So now I was making $3.00 per hour. I did four or five garages, and then ran out of customers.
My grandfather offered to loan me money to buy a gas lawnmower. I went to my newspaper and garage customers and offered to cut their grass. These were good-sized yards, so I charged $3.00 a weekly cut. I peaked at about 7-8 customers. But now I had $24 a week in recurring revenue, and still plenty of time to be a kid with cash.
In my pre-teen mind, I knew nothing about cross-selling or recurring revenue; I was only going from one bad job to a slightly less bad job. But with hindsight, we have today's lessons. 1. Do good work for a customer, and you can expand what you sell. 2. Recurring revenue beats one-time revenue. 3. Borrowing money to make money makes cents. 4. Always hug your mother and be nice to your grandfather.
Regards,
Charles Stack