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Newsletter #0003 - The SAFEST Path into Entrepreneurship
Nikolas Hulewsky
March 10, 2025
I hope your coffee is hot, your notepad is ready, and your notifications are off because this week's edition is LOADED!
Today, you'll discover:
My favorite (and safest) way to start as an entrepreneur: The Agency Model.
How Justin Welsh turned his skills into a $5M business without payroll (and exactly how you can copy him).
Podcast Recaps:
Andrew Johnson scaled Good Foods into 6,000+ stores using a genius government contracting hack;
Brad Smith built a $100K/month automation business with 80% margins by (legally) creeping on your phone;
Tyler Mumford made $23K/month stump grinding BEFORE quitting his day job.
Deal of The Week: I analyze a $1.48M logistics business doing $521k in Cash Flow.
AMA: What were the best ways we grew our Tree Trimming business?
Let's jump in!
The SAFEST Way Into Entrepreneurship: Productized Services
Ever heard of Justin Welsh? He's made over $7.5 million since launching in 2019—all without payroll.
How? By mastering something called Productized Services.
WTF is a Productized Service and how can YOU cash in?
In simple terms, a Productized Service turns traditional, unpredictable services (think consulting, freelancing) into standardized packages with clear deliverables, timelines, and pricing. You’re essentially selling a repeatable, scalable product rather than custom-negotiating each deal. Here's the breakdown:
WHAT are Productized Services?
Intellectual Property – Leveraging your unique expertise or skill that you know better than anyone else.
Technology – Using proprietary tech or streamlined systems to efficiently deliver your services.
Service – Offering a standout customer experience consistently.
HOW can you deliver them?
Staffing – Offering skilled professionals temporarily or fractionally (like a Fractional CFO).
Outsourced Processes – Delegating specific tasks externally, like bookkeeping or marketing.
Knowledge – Coaching or consulting to share your specialized insights and experience.
HOW MUCH do you charge?
Usage-based – Billing per hour, per project, or per task.
Subscription – Charging recurring monthly or annual fees.
Value-based – Pricing based on the results or value your service generates (like increased revenue or cost savings).
The takeaway?
Turning your unique skills into a clearly defined Productized Service could unlock your entrepreneurial journey—without managing a big team or inventory.
Podcast Summaries
🎙️ Guest: Andrew Johnson
Andrew’s father quit Abbott to start Good Foods, now in 6,000+ stores.
Business: CEO, Good Foods, a multi-million dollar CPG brand
💡 Insight: Leveraged government contracts & B2B deals to scale retail distribution.
Model: Started as a WIC broker/supplier, then launched private-label canned goods.
🔥 Turning Point: COVID panic buying sold a year’s worth of product in 30 days.
🎙️ Guest: Brad Smith
Your phone IS listening to you and he makes $1M/year from it!
Business: Founder, Automation Links, $100K/month with 80% margins
💡 Insight: Retargeted ads cost 75% less—businesses must track visitors & follow up.
Model: Automates marketing by integrating CRMs, ads & omnichannel engagement.
👀 Creepy but Effective: Brad reveals how businesses legally track & retarget users.
🎙️ Holdco Bros: Chris Koerner & Tyler Mumford
From SaaS sales to grinding stumps—Tyler hit $23K/month BEFORE quitting his job.
Business: Founder, B2B stump grinding service
Insight: Tyler became Tree service companies’ go-to for outsource stump grinding.
Model: Subcontracting for tree services, $390 avg. job size. No direct customers—100% B2B. Zero ads, all referrals.
Cool Moment: Tyler heard Chris and me speak about this EXACT business 6 months ago and decided to take action! Now he’s making real money. Pretty cool to see.
Deal of The Week
A $1.48M Trucking Company (Verdict: Proceed with Caution)
Pros
✅ Reasonable Price Relative to Cash Flow – This is a 2.8x multiple, which is fairly standard for a logistics business.
✅ Includes Equipment – $1.2M worth of trucks and assets are included.
✅ Contracted Customers – A solid sign of stability
✅ Relatively Low Owner Involvement – Seller only spends 10-15 hours per week.
✅ Dominant Local Player – Seller appears to be the main player in the market.
Cons
❌ Home-Based Business with No Central Facility
❌ 1099 Contractor Reliance – 20 drivers on 1099 contracts sounds like a headache
❌ Seller Selling for “Other Business Opportunities”
❌ Competition Understated – The listing says only "a few smaller outfits" compete, but trucking is a highly competitive industry.
❌ EBITDA Not Disclosed – Hard to assess true profitability without EBITDA.
Price Analysis
Business Price ($1.48M, ~2.8x cash flow) – A fair valuation if cash flow is consistent and doesn’t include excessive owner add-backs.
FF&E ($1.2M in trucks and equipment) – Good asset base, but truck condition and depreciation should be assessed.
Total Investment (~$1.48M) – Reasonable if operational efficiency can be maintained and growth opportunities exist.
Why I Hate It
🚫 Asset-Intensive – Trucks depreciate quickly, & maintenance costs eat into margins.
🚫 Thin Margins in Trucking – Industry is notorious for low profit margins due to fuel, labor, and insurance costs.
🚫 Regulatory & Compliance Risks
Why I Like It
✅ Decent Cash Flow with Low Owner Involvement – If truly semi-passive, this could be a great acquisition for someone.
✅ Local Market Leader – A dominant position in Chattanooga could provide a moat.
✅ Relatively Affordable Entry – $1.48M isn't a crazy price if the business is well-run and stable.
3 BIGGEST Questions I Would Need Answered
1. How Stable is the $521K Cash Flow?
Why it Matters: If margins are already razor-thin, rising fuel costs, lost contracts, or economic downturns could sink profits.
What to Ask:
- Can I see 5 years of P&Ls and tax returns?
- What percentage of revenue comes from top 3 customers?
- How much does fuel volatility affect profits?
Deal Impact: If cash flow fluctuates significantly, I'd push for seller financing or a lower price.
2. Why are They Selling??
Why it Matters: It is always a red flag when I see a seller exiting for “other business opportunities”. If this business was so steady, hands off and profitable, then why are they selling?
What to Ask:
- What is your other business?
- Why are you selling now?
- If the business is truly hands off, why not just keep it?
Deal Impact: If I can’t get comfortable with their reasons for selling, then the deal becomes significantly less attractive.
3. Is There a Clear Growth Plan?
Why it Matters: Scaling a trucking company requires either expanding routes, winning new contracts, or acquiring more trucks—all capital-intensive.
What to Ask:
- What new contracts are in the pipeline?
- Can the business expand beyond Chattanooga profitably?
- Tell me about driver retention/turnover?
Deal Impact: If growth is stagnant, it becomes more of a cash-flow play rather than a scalable business.
Final Verdict: 5/10
This could be a solid acquisition if:
Cash flow is consistent (and not propped up by one-time factors).
Drivers are reliable and don’t pose a compliance risk.
Customer contracts are stable with no major churn risk.
There’s a clear path to growth beyond local deliveries.
However, the trucking industry is tough, with tight margins and regulatory risks. If I were to buy this, I’d need to secure seller financing and ensure contract stability before moving forward.
AI Round Up
China unveils a new Quantum Computer, Manus produces a second DeepSeek moment and Mistral releases a new OCR here
Ask Me Anything
Q: What's been your highest ROI marketing tactic for the tree trimming business?
A: Great question! Hands down, the highest ROI for our tree trimming business has been cold outreach. Specifically, we employ an offshore virtual assistant at around $5/hour to cold call, email, and text property managers, realtors, and other home service providers. This proactive strategy generates leads at roughly a 12x return on spend.
Another powerful strategy has been forming strategic partnerships with competitors. We actively connect with local tree trimming businesses that either don't offer certain services (like stump grinding) or regularly need overflow support. This creates an ongoing referral pipeline and keeps our customer acquisition cost extremely low.
While platforms like SEO, Google My Business (GMB), Angi, Thumbtack, and Local Service Ads (LSAs) consistently generate leads, proactive, relationship-driven outreach—especially with affordable offshore virtual assistants—remains the clear winner. This approach helped us quickly scale to nearly $100K/month, despite starting from scratch.
Want personalized advice or have a business question? Send it to me via Twitter, Speakpipe or [email protected]. I answer a new one every week!
And if you’re looking for help generating leads, Chris and I recently launched a business that utilizes all the strategies we’ve developed to help grow our incubated companies.
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Nik Hulewsky