How I built a six-figure business without debt

With as much as I would love to tout a long-term financial strategy that is easily applicable to any small, service-based business, my story is far less remarkable than that.

I accidentally started a business in 2013–at least that’s what I tell people.

I moved to small town. I couldn’t find a job. I started freelancing. I got off on the thrill of building relationships and up-selling and watching their businesses grow, while I watched mine grow. And I wanted more of it.

I wanted to make a name for myself. I wanted to run an operation like a boss.

The thing about running an operation is you have operating costs and since there isn’t a huge market of investors looking to pour into branding agencies run by 26-year-olds, I had to come up with those operating costs myself. Facing this conundrum was when I decided I wouldn’t operate my business on debt.

Now, before you get all up in arms about good debt versus bad debt and things worth going into debt over, know this: I’m not preaching this as the right or only way. I write this simply to say, it’s possible to build a six-figure business without debt and this is how I did it.

(1) I Saved for what I needed.

I knew I would need hosting and a fantastic website and a great email marketing program. I knew I wanted an advertising budget to grow my mailing list. I knew myself well enough to know I needed automation, because medial tasks, requiring attention to detail are not my strong suit. I knew I wanted enough money to pay my people, even if the client paid late or not all. (After all, my people are my assets and I was committed to paying them for the work they did regardless of whether or not clients held up their end of the deal.)

I calculated exactly how much all of that would cost and how much money I wanted left over in savings once all of that was paid and I went to work making the money by freelancing. I pursued potential clients more aggressively. I took on just a tiny bit more than I should have and I worked dozens of hours of overtime.

I paid myself only what I needed to live and everything else stayed in the business bank account.

The business bank account is key. If your business’s money is going into your personal bank account, it’s easy to overspend and under-save. By writing myself a paycheck for only what I needed to live, I held myself accountable for saving.

(2) I Booked the Business First

While I scouted my team for months before I contracted any of them, I didn’t actually make them any promises or bring them on until I had the money I needed saved and until I had money in hand for the project I was contracting them for.

On the road to six-figures, I’ve added several additional contractors to my team and I went through this same process every time. I made sure I could pay them no matter what happened with the client. I didn’t commit to the contractors until my clients committed to me.

I didn’t start any work for clients until contracts were signed and money was in hand. I didn’t develop any digital products unless I had enough pre-orders to merit development of the products.

If you’re wasting time on projects you aren’t sure you’re going to get paid for, you’re wasting money.

(3) I Constantly Assessed Profit Margins

This is likely the single most important factor in taking my business from $30K in my first year to well over $100K in year 4. Every single project we’ve ever done, I’ve looked at how much I spent to get the project done—how much I paid my contractors, what my time was worth, credit card processing fees, taxes, money spent trying to fix little problems that popped up so the client would never have to know.

Once I looked at those profit margins, I estimated how many projects would I have to do at that price point to reach six-figures. For the first few years, every time I did this exercise, I would find it was an impossible number of projects, so I would raise my prices by 15% or 20%.

I’m compelled to venture into ethical territory here, because—although not verifiably related to my success—I know my ethics influenced my reputation, which affected word of mouth, which contributed to our success. I didn’t just arbitrarily raise prices. With each new project, we got better at what we were doing. We got more efficient at what we were doing. We got more confident on what we could deliver and therefore we delivered more value.

(4) I DIYed it often

I still DIY it often, within reason. If you’re going to build a business without taking on debt, you have to get good at things you never thought you’d be good at. Please note I’m saying you have to get good at them. I’m not saying do something you absolutely suck at just to save yourself a couple of bucks, because then you’re just putting your reputation on the line.

I worked harder and longer hours in the first three years of my business than I worked in the entire 10 years prior. Not only did I have a ton of work to do, but I had to teach myself how to do that work well before I even started it.

I estimate over the course of the last four years, I’ve saved myself roughly $80K, learning to run effective Facebook ads; learning to edit podcasts and videos; learning to use the entire Adobe Creative Suite.

Was it easy? Nope.

Is it for everyone? Nope. (Seriously, if you suck at it, do what you’re good at until you’ve saved up enough money to hire someone to do what you’re not good at. And at the same time, don’t give up just because you suck at it the first time.)

But it saved me a freaking fortune.

(5) I Practiced Patience for Years On End

This is probably the most challenging part of building a six-figure business. It took four years for me to cross the six-figure mark in a single calendar year, and even then my profit margins aren’t exactly where I want them to be. (True confessions over here.)

I can get preachy about four-hour work weeks and the gospel of balance, because—while those things may be possible eventually—most people have to work really hard and be very patient before they can get there.

I genuinely believe the difference between entrepreneurs who win and entrepreneurs who fail is just time. So many people give up or switch businesses before they ever gain enough momentum to get to see the fruits of the labor.

If you want to build a six-figure business, be all in forever.

Laura Diaz is the CEO and Senior Strategist at Kiss Me Creative where they make client love all day long. Her super powers are efficiency, follow through and creativity based on sound logic. She enjoys long sips of coffee and short lines at Starbucks.