This newsletter is 3 years overdo. Here’s why
The original plan was for LIFT Enrichment to reach $1 million in gross revenue (that’s purely in sales receipts) in 2020.
Covid got in the way.
But with a lot of hard work and some strategic movies, we rebounded and are better than ever.
Here are my top two tips for hitting 7 figures
The Silliness of Gross Revenue
I’m a big believer that “Revenue Feeds The Ego and Profits Feed The Family“
Gross Revenue is a silly metric…but it’s what entrepreneurs generally look for to see the “how well” your business is doing.
Net Profit, which is the money you keep after paying all of your expenses is the REAL metric.
Would you rather have a business with $700,000 in sales and $350,000 in net profit a year…OR a $1,000,000 business with $200,000 in net profit?
While net profit is key, I wanted to get to $1 million in gross revenue for a variety of reasons.
(Interesting statistic: only 4% of businesses in the world get to this point!)
It’s a very striking number.
And it’s the amount you need to join EO Arizona one of the best chapters within the best global entrepreneurship network.
I didn’t qualify until recently, so I joined the EO Arizona Accelerator program, which helps businesses with $250,000 in revenue scale up to $1,000,000. You get an accountability group, coach, mentor, fun learning events and an amazing community of vibrant and driven entrepreneurs. It’s not a networking and referring business, but is instead purely about helping each other learn and grow our businesses.
I was part of the EOA LA chapter for 2.5 years and then moved to Phoenix and joined the AZ chapter.
Along the way I learned:
Lesson 1: The Riches Are In The Niches
Most people don’t know this, but LIFT Enrichment started in 2010 and was called “Cooking Italiano for Kids”
We taught after-school cooking classes to mostly private elementary schools.
We added a Lego Robotics program as well because I had experience using a specific type of Lego called the Mindstorms to create an enrichment program geared around engineering, programming and very, very cool robots.
However managing and growing two, entirely different companies (even though they served the same market being elementary schools in affluent neighborhoods) was very challenging.
It was confusing when people called our office.
Our receptionist said “Thanks for calling Cooking Italiano for Kids and Lego Robotics Class, how can I can help you?”
In 2014 I rebranded to LIFT Enrichment which stood for “Learning is Fun Time” so it was easier to market.
And yet it was still hard.
In 2016 I stopped and said, “Enough is enough!”
It was too hard to scale a team of Lego Robotics instructors AND Chef Teachers. I had to buy all of the Lego parts AND track all the new recipes for Cooking.
I knew I had to keep one. And in a very instinctual, easy move I said to myself, “If I never see another Lego piece for the rest of my life, I’d die a happy man.”
At the time, I had $30,000 in Lego Robotics Mindstorms sets in my home. I called it my retirement plan.
Quickly, I sold off all of the pieces on Ebay, stopped teaching Lego Robotics and suddenly my growth sky rocketed. I was known for ONE thing and became the best at it: Cooking classes for kids as an after-school and summer program.
I hired my first sales rep and taught her how to cold call schools to get new business.
The numbers improved:
2017 revenue: $250,000
2018 revenue: $490,000
2019 revenue: $800,000
In 2020…we predicted revenue of $1,200,000! I could graduate from Accelerator to EO finally!
But something happened in 2020 that completely CLOSED schools…the Covid pandemic.
We thought schools were gonna be closed for “just one month” and be back in April…then it was May…then June…then maybe next Fall.
Revenue plummeted, and we made practically $0 from Mar-Dec of 2020. We ended the year with $250,000, but that was just from work done and invoices collected from the beginning of the year. I had to let go of all of my staff and instructors. It was a dark time.
My rent was $4,900 a month for a 3 bedroom, 2 bathroom house in West LA. It had a great backyard for my dog, which I shared with my fiance at the time. I ended that relationship (she had issues with drinking) in the middle of 2020…and she got the dog as well.
It was time to start over, but how should we rebuild?
Lesson 2: Focus on Big Ticket Items
In early 2021, a bright eyed and bushy tailed Eric arrived in Phoenix, Arizona ready to start again. I made a video on why I permanently left California, and it was mostly due to the harsh economics and regulations of running a company in the state. Also traffic in LA is pretty bad. And rents are insanely high.
I moved from the EO Accelerator program of LA to AZ and got to know an amazing group of entrepreneurs. Within a month I had a great peer network and we’d go on hikes, study business books, attend learning events, go out for dinner/drinks and just have fun as we grew together in radically different industries.
From February 2021 onward we taught a LOT of virtual cooking classes including
• A monthly subscription program featuring new recipes every week. It had “easy weeknight recipes,” “gourmet lessons” and even a dessert class! We made some advanced stuff: like a Valentine’s day cupcake with a heart in the middle of it. Here’s the video tutorial
• A limited series of virtual cooking classes parents could purchase AND we shipped you the ingredients each week
• Partnerships with a few schools and another company to provide virtual cooking classes for high schoolers
By the end of 2021, I hadn’t seen much results. We were still struggling and I was getting by from my savings (a 12-month emergency fund). My life was fine, I just had to watch my budget here and there. I was hiking and cooking a lot, both of which were fun and low cost.
I talked to one of my coaches in EO, Karl, and had a conversation with him about just ending the virtual program. I had a handful of parents and students who LOVED the program and tuned in every week to cook with our Chef Teachers…but it wasn’t making much money.
In all of 2021, we made $85,000 in gross revenue. It had virtually no profit.
Later, I talked to my buddy at Professor Egghead, an after-school science program for kids, and he was doing well getting schools and returning to in-person classes in southern California.
I reached out to a few previous clients and got back into the game of working with private schools to teach an after-school program that parents paid for.
But everything changed when I spoke to a school district that I had had a relationship for over 3 years.
We discussed the possibility of my program being taught to over 400 students at 20+ sites. I’d send Chef Teacher to 2 sites a day, to teach two back-to-back workshops for several weeks. To execute the program I’d have to fly in chef teachers from other states like Hawaii and Oregon..and even go myself. I’d provide transportation, food AND accommodations.
I spoke to the director and quoted her $32,000.
My heart skipped a beat, because I had never, ever quoted something that high.
She said, “Ok, and can we do it again the following month?”
The quote had just doubled! It was now at $64,000 and we added a few elements to end it at $70,000.
I was so shocked and surprised, and incredibly excited! This would get me out of my financial bind. I could get some breathing room… and some net profit!
Let’s do some math here.
If I worked with a parent-paid program and charged $250 per student for a 10-week program and got 15 students enrolled, I’d earn $3,750.
I’d have to partner with 19 individual private schools and ensure I get at least 15 students enrolled at each site to bring in the same amount of revenue as one district. I’d also have to coordinate with over 285 individual parents and their kids.
I thought…could I get more of these districts? It was a lot easier to sell one big client then get many many smaller ones.
By the way, the district used ASES funding at each site to pay for our program. I go into detail on our funding sources here
Within a few months, I had refocused the entire company on big ticket items…and it paid off. I even wrote about why we didn’t do “parent paid programs” here
Soon we were hitting new records, with a single client booking $85,000 in services…and then another at $110,000 …and another at $177,000! Currently we have some clients that purchase $200,000+ in cooking classes throughout the school year and summer break.
We don’t even look at small sites anymore for offering in-person classes. Instead, we started growing our virtual-live workshops that we offer to anyone throughout the uS
The new rule was Big Ticket ONLY. I’d rather go for a few big fish then just sit back and snack on sardines for ages.
The district are easier to work with, the margins are better and it’s simpler to serve. Plus, we can help more kids and it’s less stress on our Operations team.
In March of 2023, we finally hit 7 figures and I applied to EO Arizona! Our momentum is pushing us well past the $1 million mark, and we could finish the year around 2!
Our rapid growth was a series of well-executed moves:
But the basic fundamentals are key:
• Niche, niche niche
• Big Ticket ONLY
When (and not “if”) I start a second business, in an entirely different industry, those key principles will remain true.
But that’s a story for another day 😉
And here are our 3 most recent newsletters
P.S. If you liked this type of offbeat newsletter (usually we talk about nutrition, after-school and the education industry) then check out these newsletters on why I love Dubai and that time I lived in Colombia
If you’re a Title-1 district or school with after-school grants that would like to bring fun, education and HEALTHY cooking classes to your students anywhere in the US, book a meeting with me here.