This morning, I woke up thinking about estate agents. Whilst I think about estate agents quite a lot (I love property, but the whole buying process is totally flawed in the UK), I’ve never REALLY thought deeply about their business model. They don’t build the houses. They don’t lay the bricks. They don’t own the land that the house sits on, but they are happy to advertise it and sell it as if they do.
As soon as that “Sold” sign goes up, they walk away with a massive cheque, withouiut risjing a thing other than their time to take a few pics, pop it on a website and show a few people around. They aren’t selling their own property; they are selling someone else’s.
The secret? OPM.
OPM stands for Other People’s Money, and for the savvy entrepreneur, it is the ultimate cheat code. Most people think they need a massive bank loan or a rich uncle to get started. They think they need to buy stock, rent a warehouse, and pray someone buys it, or they think they can’t run a business because of their bad credit score.
The estate agent knows better. They’ve realised the golden rule
“You don’t need to own it to sell it.”
Once you realise you can sit in the middle of any transaction without owning the asset, tinstead of thinking “if I can afford it” it starts becoming more like “how can I help sell it?”
It doesn’t just apply to property and physical stock too, but digital assets or other peoples skills and time too. (just look at recruitment agencies).
I didn’t learn this at a posh university. I wasn’t allowed to go to college or University, and had to go out to work instead. I grew up on a council estate, and my first “business” was a sweet container filled with “Bubbly Shubbley”. A soap and water slime mixture coloured with felt tip pens. I charged people 20p to dip their hand in for a prize when I was about 9 years old.
Even then, I wasn’t buying the prizes; I was “borrowing” my younger sister’s toys, and using my mum’s soap That was my first lesson in moving assets I didn’t own. 😂
The Luxury Leverage Maths
What I did go on to wonder, was why do MOST estate agents sell boring 2-3 bedroom vanilla run of the mill houses if they don’t have to buy them? Why not sell the very best properties out there instead?
If you’re going to spend your sweat equity. Ie – your time and energy, then why would you waste it on the small stuff?
In the property world, the “faff” of selling a tiny, boring terraced house is pretty much exactly the same as selling a high-end mansion. The admin is the same. The viewings take the same hour.. (Well, maybe a little longer depending on the grounds…) But the maths speak for itself:
Boring 3-Bed House
Owner Risk: Zero (for the agent)
Sweat Equity Required: High (endless viewings/admin)
Potential Payday: Average local fee circa. £7.5k
Luxury Mansion
Owner Risk: Zero (for the agent)
Sweat Equity Required: Identical (same time investment)
Potential Payday: Life-Changer circa £300k
Why work ten times harder when you can apply the same effort to a deal that sets you up for the year?
Most people are too intimidated to go after the “big houses,” so they stay stuck in the “boring” market with all the other competition. They don’t realise the risk to the agent is exactly the same: Zero.
Why I Stopped Turning the Machine On
I learned this lesson the hard way with my first proper business, Adma-Colour. I’d borrowed £5,000 from the Princess Youth Business Trust and spent £1,500 on a hot foil printing machine.
I spent late nights labouring like a slave, trying to get prints straight and making a total mess. Then I saw an advert in the Exchange and Mart.
A competitor was selling 100 plastic business cards for £8. That was half what I was charging and even cheaper than I could even buy the blank stock for!
This was the first time I learnt about leverage. From that day, I asked for a sample pack, made a book to showcase what we could produce. I never turned my machine on again. I doubled their price, took the orders for £16, and let them do the work.
I realised I didn’t need a printing machine to be in the printing business. I just needed to be the one who talked to the customers. I sold the machine back and started selling pens, stickers, and merchandise; all without owning a single piece of equipment.
The Car Forecourt Masterclass (The SOR Model)
This “move it, don’t own it” logic applies to everything from business cards to Ferraris. Back in the day of having a job, I worked for a car dealership, and the owners sold it to my boss, and he had very little cash left for stock.
A car garage with no cars is just a very expensive car park. His solution was a masterclass in SOR, (Sale or Return).
He found a private car dealer who had plenty of stock but no premises of his own. He offered him the forecourt for free. He also had friends, and customers that offered the same service to.
Here’s how he did it:
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Secure the Space: He already had the garage (the “forecourt”).
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Find the Stockist: He found a trader with cars but no “shop window.”, and had friends and family that he agreed to sell cars for.
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Fill the Forecourt: The trader parked his cars on the lot at no cost to the garage.
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Split the Profit: When a car sold, they split the margin.
The beauty of SOR is that the garage owner never risked a penny. If the cars depreciated, that was the trader’s (or car owners) problem.
I used this exact same strategy when we started Toyday.co.uk. We didn’t buy a single toy at first. We took a printed catalogue from a supplier, photographed the pictures, and listed them on our website.
We only placed the order with the supplier once the customer had already paid us. We were using the customer’s money to buy the stock and keeping the change. This is how you start a business with zero.
The “Start a business with Zero” Model
You don’t need a loan. In fact, loans are usually just a “comfort blanket” for people too scared to start, and they actually increase your risk, because you need to meet those monthly loan repayments before you can make any profit.
When I started window cleaning, I didn’t even have a ladder!
I just specialised in bungalows until I’d earned enough for a roof rack.
You do not need to buy stock upfront to start a business. That is a myth that leads to bankruptcy. I was bankrupt at the age of 24 because I spent money I didn’t have on things I didn’t need.
Before you start your next venture
Ask yourself:
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Is it OPM? Am I or can I be using someone else’s inventory, capital, or equipment?
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Zero Upfront Stock? Can I list the product or service before I’ve paid for it?
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Can I Pre-sell? All of my business models have included taking an order before parting with any money. Even my book.
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Sweat Equity Only? Is my primary investment my time, rather than my bank balance?
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Do I REALLY need it? If I think I “need” to buy something for the business, have I waited 24 hours to see if I can do without it? Could I borrow one?
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Do I need a NEW one? If I do really need it and can’t borrow it, does it have to be new? A used one will work just as well and often come with lots of extra’s
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Stop Spending Money! Am I saving or investing instead of spending? Remember: A penny saved is a penny earned. And you don’t pay tax on money saved.
If you can’t answer “Yes” to these, you aren’t building a lean business. Instead you’re just buying yourself a very stressful job.
Join the Start a Business with No Money Community
Starting with zero can be challenging, but it’s actually your biggest competitive advantage. It forces you to learn the skill of business instead of just the habit of spending.
If you have no money, you have nothing to lose. That makes you dangerous. It makes you lean. It makes you a proper entrepreneur!
Join our ‘Start a Business with No Money’ Skool community. We’re a group of high-energy hustlers who realise that being skint is the best training ground for being a millionaire.
Come on, get stuck in. It’s free, you’ve got nothing to lose and a whole lot of margin to gain. We look forward to helping you inside.
Cheers,
Adam
PS – I wrote a book!
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