The Butler Project

If you haven’t read about my foray into the world of entrepreneurs, here’s the short version: Looking to generate some passive income, I bought some 25-cent vending machines through a classified ad. I put the cost of the package, the whole $11,000 on my credit card. The package included a Locator Service — someone to come to my city and find businesses where I could profitably place my vending machines. The locator company warrantied a certain number of vends per day, and assuming they stuck to their warranty, I would be making about $2700 a month from my little vending machines! One of my biggest concerns going into this business was, “How will I carry $2700 worth of quarters?”

The Saga Continues

Well, I had signed all the papers, now I just had to wait. The candy arrived first. A Fed Ex truck showed up, and two people unloaded boxes and boxes of candy. 1/4 of it was Chiclets. Does anyone even like Chiclets? Tom, the vending machine salesman, had assured me gum was a top seller. He was the closest thing I had to a mentor, so he must be right. Building an empire on Chiclets. It felt good . . . or so I told myself as I hauled boxes of peanut M&Ms, Runts, Chiclets and small encapsulated toys to my basement. It was a great start.

The machines arrived 2 weeks later. Awesome. No one mentioned they came in pieces. Luckily, I’m married, and my husband did the manly thing and put them together. Now we just had to wait for the locator service. No problem. When you’re going to make that kind of cash, you don’t mind waiting a few days.

Please Come

Days, however, turned to weeks. I started making phone calls. I tried to be patient and understanding, but all I wanted to do was to get out there and make some money! By this time I had a credit card statement with a balance larger than I’d ever seen. We had carried a balance on a credit card before, but we worked like bandits to pay it off. I was anxious to start working like a bandit to pay this one off too. No one at Cornerstone Marketing shared my urgency or enthusiasm. They said my locator, Craig, was busy elsewhere in the country, but he would get there. “Two weeks,” they assured me, “Two weeks.”

Two weeks turned into two months. The machines got dusty in my garage. I made phone call after phone call. I knew everyone by voice at Cornerstone Marketing. I was figuring out their family relationships –Chris was the son, Melanie was either his wife or sister, and their Dad was the BIG BOSS.

Finally Cornerstone gave me the locator’s phone number. I talked to my locator, several times. First, he couldn’t come because Cornerstone wasn’t paying him enough. Then he couldn’t come because he and his brother had a huge fight. Another time he had the flu, worst case he’d ever had in his whole 52 years. Then he started giving me the “Two weeks” promise. Two weeks turned to four, four weeks to six, etc, etc.

Things started getting ugly. Chris (the original salesman at Cornerstone) had started refusing my calls months before, but now no one would talk to me. I finally filed a complaint with the BBB. Cornerstone claimed this (filing the complaint) voided our contract. How convenient for them. I stood behind the complaint; Cornerstone refused to answer.

Eventually, my locator showed up. He called me that morning and claimed he would have 15 awesome locations for me by noon. At 3:30 we met at a gas station where he told me he got 1 good location and 6 terrible ones. He then handed me a map of a neighboring town, circled a few spots I might want to try, and wished me luck.

I placed vending machines at the 7 locations and started servicing them. After two weeks I got 4 quarters from one, 8 quarters from another; my monthly gross totaled less than $100. Carrying those quarters wasn’t an issue. Counting them took moments. They were not even enough to cover the minimum monthly payment on my credit card.

I had pretty much given up on Cornerstone. Even with the warranty, they couldn’t manufacture decent locations for me. The BBB complaint had seemingly led nowhere, and I had little hope of getting any of my money back. I thought maybe Tom, the vending machine salesman might put some pressure on Cornerstone for me. But then hurricane Katrina hit his business, and I never got a hold of him again.

One day a lawyer from the Federal Trade Commission called me. He was investigating Cornerstone Marketing, and had seen my BBB complaint. I told him my story and signed a deposition. He said he’d let me know how it turned out.

How It Turned Out

• I have 13 vending machines in storage (two went “missing” when their location changed management.) One of these has been vandalized, but still works. I tried selling them online. I tried selling them in the classifieds. Anybody want to buy a vending machine?
• My total (net) take in quarters over the 8 months I had the machines out was less than $1000, somewhat less than the $21,000 I was “warrantied.”
• Chris, Melanie, Carol, and Sidney Putnam were all charged with two counts relating to “unfair or deceptive acts or practices in or affecting commerce.” (At least that’s my understanding of the formal complaint against them.) The judge suspended the $3 million judgment against them because they showed they are unable to pay that full amount. They were required to pay $55,000 plus the proceeds from the sale of a house Chris and Melanie owned. No one has called me to come pick up my settlement check. I’m not sitting by the phone.
• I’ve decided my vending career is over.

He Knows What He’s Talking About

One of our millionaire interviewees, Dan emphasized again and again that there are 3 essentials entrepreneurs must have: a mentor, money, and people. Let’s go through them individually:

A Mentor

Sure, I knew a few people who had made money with vending machines. I didn’t discuss this offer with them. I didn’t have a relationship with any of them where I could call them up and get advice on what to do next. I had no one to turn to when I wondered How do I get my own locations? Where are the best locations? What should I do with all these machines?

Dan also stressed the importance of experience–knowing the business you’re getting into.

The only experience I had with vending machines prior to this business opportunity was that I hated my kids begging for quarters whenever we saw one. I didn’t like vending machines. I thought they looked tacky and made a mess of the business where they were placed. When considering buying my own machines, I ignored my negative feelings because I was focused on the promises of two salespeople who stood to gain from my leap into vending.

I had no mentor and no experience.

Money

I had no money to invest in this business opportunity. I leveraged my good credit into this vending “route.” I ended up with 13 vending machines (anybody want to buy a vending machine?), some airline miles rewards, a whole lot of useless vending product, and 18 months worth of credit card payments.

People

Did I have people? I had a husband who supported me. He put my machines together, helped me deliver them, and even placed a few after the original locations proved their inadequacy. In the right business, we’ll do great together.

What Did I Learn?

I learned just how essential money, a mentor, and experience are for an entrepreneur. I learned about sales, and shady business offers–deals that sound too good to be true.

I learned that I can come back. I can pay for my own mistakes and try something else. I learned humility. I learned something about myself and the work I am and am not willing to do.

Had I taken my time and paid cash for one vending machine and the product to fill it, I would have learned these lessons of experience at a much lower price, but I’m back. I’m smarter, wiser, and ready to try again.