How To Make Money in Any Industry (Without Experience) with Craig Fluty

Owner, Business Development at Pinnacle Recruiting & HR Solutions – Craig Fluty

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Craig tells some AMAZING stories, like how a huge business deal was made by meeting a random person in a bathroom in Mexico.

But he also explains how he can hop into a new industry (and not even have experience) and make money. How does he do it? Listen in and enjoy!

Check out Pinnpeople.com for more info!

Thanks so much for listening!

Transcript:

Jaime: Welcome to Eventual Millionaire. I'm Jaime Tardy and today we have Craig Fluty on the show. Craig's a serial entrepreneur; he has a bunch of different businesses with offices all over the world. One of them is called Pinnacle which does HR staffing but he's been in so many different industries. I'm so excited to have him on the show today. Thanks so much for coming on, Craig.

Craig: Thank you very much, Jaime, for having me.

Jaime: When I first started this show, one of the questions I wanted to ask, which I never really get a chance to ask, is when you were little, did you always know you would be wealthy or a millionaire or did it come out of nowhere and this was an amazing surprise to you?

Craig: That's a good question. I guess I never really knew that I was going to do it. What I did know was that I wanted certain things, I liked certain things and I always got what I wanted, I always figured out a way to get what I wanted. When you want it that far in advance, from a young age, the answer is you've got to make some money somewhere or start robbing banks. You've got to get it so the only logical answer is make it.

Jaime: So it was about solving a problem. So it's less the tangible money problem but more "I want this specific thing." Were you always an entrepreneur, did you start out young or did you work in corporate and try something else?

Craig: I certainly started out young. I started off mowing lawns, having a lawn service and raking leaves at a really young age. It got to the point where I would work other people out of business, I would have a couple of house accounts and a neighbor would have house accounts, they would go on vacation and I would undercut their prices and do a better job and when they came back from vacation they would want to stay with me because I was cheaper and did a better job. One of my earliest lessons in business, as you can imagine, you're mowing lawns, you're doing it once a week and that's not a big deal, but when fall comes they want their lawn raked, you've only got a three week period to rake all these lawns and I had all these accounts that I had amassed, so I had to hire my sister and the neighborhood kids, the people I had put out of business, I had to hire everybody. I was raking lawns in the rain, staying home from school to get these stupid lawns raked. So I learned scheduling and being prepared for the rush and looking ahead a little bit, so it was nice to be able to rake all those lawns but when it came time to mow them all in a two week payment I got myself in my first big jam. So I had my first business when I was very, very young and didn't even realize it, but it built up just by going after it.

Jaime: How old were you?

Craig: I was just wondering when I was telling the story. I would say that it started when I was about 10 or 11, the age that it is when you take your dad's lawnmower to the next door neighbor and charge them $10 to mow the lawn and then the neighbor next to that, you'd mow the lawn if they needed that and the next thing you know you have too many lawns to do yourself so you have your buddy starting mowing lawns and you're collecting it and paying him a little bit less and you keep the difference. I liked that, not doing the work and collecting the money.

Jaime: And you have a taste - "I like this, I don't even have to do the work and I get paid."

Craig: Exactly. You charge everyone $10 to mow the lawn, you give your friends $7 or $8 and all you do is collect.

Jaime: Were your parents entrepreneurs? Were they going "This is great!"? Or were you doing it all yourself?

Craig: Both of my parents were teachers, but at the same time they owned businesses, my father was a real estate agent, investing in properties, and my mother owned a hair cutting business. She didn't cut hair but she bought the business. So they always had businesses on the side. My grandfather, everyone says that I'm much like him, he had businesses his whole life, all different types of stuff. He would buy things where people didn't even know why he bought it but he'd figure out how to make money on it and sell it, so he's done everything from building bowling alleys. His most interesting purchase was a cement building that was landlocked, this is a long time ago, and no one understood why he bought this building that was landlocked but what happened was it was at the top of Eerie Boulevard in Schenectady and at the time the Utica Club Brewery was delivering in that area but they had to drive all the way from Utica to Schenectady so they were shipping down a lot of trucks so what he did was he turned that cement building into a cooler and then they were able to rent the cooler, bring one big truck, load up the cooler and deliver it from there. So he probably paid $1 for it, he put a little bit of money into it to turn it into a cooler, talked to the Utica Club and the next thing you know he's renting it and then they bought it from him.

Jaime: That's insane. How do people know? Well we're going to get into your story too, but knowing, that's very risky and crazy. It sounds like you've got some of his stuff, so what was the first business that you ended up doing? The real business, not that mowing the lawns wasn't a real business, but you know what I mean.

Craig: I hope I don't incriminate myself here.

Jaime: We like this!

Craig: It's still recording. My first business was in the staffing industry. I graduated college, I went to work for an awesome, awesome staffing company, I had great training and I had the opportunity in a booming market to learn technology staffing. I learned it in New York City, then New Jersey then Leicester, then I was recruited away to work for another very large staffing firm back up in the Albany area and I did that for a little while, almost exactly a year, when, I don't know how it happened, but I just basically started my own company out of the back door of the first one. So still working for the first company and I opened up my own office, still working for one but building my own other business with some partners, until one day I was in, having a meeting with the partners of my new business when one of the sales people that worked with me at the other business walked in to do a cold call and saw us all sitting there in the middle of the office and we just looked at each and he looked at me.

Jaime: Found out!

Craig: That's how they caught on. He walked into it and there's all the owners. I was not very surprised about a week or two later when I was fired but that was how the first Pinnacle started.

Jaime: What made you decide to do it on the side? And what made you decide to go into staffing instead of starting your own thing? Especially when your lawn mowing business was so successful?

Craig: Like anything I was just so sick of mowing lawns that when I graduated I was done mowing lawns, that was all behind me. In hindsight, it would have been cool to still have that seasonal lawn business, I know a lot of people that have them and twasn't a real business, but you know what I mean.

Craig: I hope I don't incriminate myself here.

Jaime: We like this!

Craig: It's still recording. My first business was in the staffing industry. I graduated college, I went to work for an awesome, awesome staffing company, I had great training and I had the opportunity in a booming market to learn technology staffing. I learned it in New York City, then New Jersey then Leicester, then I was recruited away to work for another very large staffing firm back up in the Albany area and I did that for a little while, almost exactly a year, when, I don't know how it happened, but I just basically started my own company out of the back door of the first one. So still working for the first company and I opened up my own office, still working for one but building my own other business with some partners, until one day I was in, having a meeting with the partners of my new business when one of the sales people that worked with me at the other business walked in to do a cold call and saw us all sitting there in the middle of the office and we just looked at each and he looked at me.

Jaime: Found out!

Craig: That's how they caught on. He walked into it and there's  great. It would have been a nice business to still have, however the reason I chose staffing was because that was what I knew. I graduated college and two weeks later went into training for this other staffing firm and that was all that I knew at the time.

Jaime: What did you get a degree in?

Craig: Marketing and finance.

Jaime: Okay, so that makes sense. Did you just apply for that because it was a jog that sounded cool or were you planning on going into that?

Craig: I had no idea that the industry existed. I just went to on-campus recruiting, so different companies came and would interview and I took any interview that would have me. So I interviewed for business management for CBS and K-Mart, anyone that looked at my resume and wanted to interview me I went on the interview. This one company, it was called AeroTech at the time, now I believe it's called Tech Systems, an awesome, awesome organization - we basically model our company after them and whenever I can I hire ex-employees.

Jaime: Those people.

Craig: Well they train right, it's a great organization. I just got an interview one day for this company and the way they explained it to me was "You're going to be interviewing people and hiring people, you're going to be a recruiter." They didn't exactly say what it takes to recruit somebody, "Well you're interviewing and you're hiring people and you're putting them on projects."

Jaime: Sounds easy, great, I'm going to sign up!

Craig: That's pretty much it. Little did I know I wasn't going to sleep for the first year, working every single day for three months, but it was awesome, it was a great, logical first step. In fact, when I took the job I went away on spring break with some friends of mine and we were in St Martin, we were all bartenders when we were in college, so we get to St Martin and we were on a cruise and the whole cruise ship went to this one beach and we were at this beach bar and the bartenders didn't really know the drinks that the kids were ordering so at first we were telling them how to make the drinks, then we're making the drinks, then we were dancing on the bar, and we got offered a job, my friend and I, they said "When you finish college, we'll fly you back here and you can work for us at this beach bar." So I told my friend and said "Of all the interviews that I've been on, I'll take this job bartending unless I get an offer from AeroTech."

Jaime: You could have been on the beach!

Craig: Yeah, I could have - but where would I have been today? Well, still on the beach.

Jaime: Good point! How old were you when you actually started your own business?

Craig: Well I graduated college in '95, so I was 21 and it was probably three years later, so 24.

Jaime: So pretty young. Was it very different? Because you used to be the guy who did the service, so you knew the service really well, and then you decided to be a business owner which is very different, which you know now. Hoe was the transition?

Craig: It was incredibly different and difficult because although I knew how to recruit and I knew how to train recruiters, I knew how to sell our service, I knew how to train people to sell our service, I knew how to setup the operation from a delivery standpoint, I had no idea about cash flow or legally the different things that I needed to file and sign up for. Someone said something about taxes, I had to pay those, income tax, I had to figure all that stuff out, and of course a lot of it was figured out the hard way. I had two or three business partners at the time and one of them, his family were entrepreneurs so we were able to get some good guidance from his parents to at least keep us out of jail.

Jaime: So tell me about the evolution, in summary. Because you've had quite a few businesses - you started with Pinnacle and it evolved from there. Tell me about the evolution of that.

Craig: Okay, so we started with Pinnacle and being a typical class A personality and an athlete, fraternity kind of guy, I was kind of a jerk, so as Pinnacle grew it came that I had some internal growing to do, I was belligerent towards people, so I ended up getting a forced buyout from all of my partners and was taken out of my business. As part of my buyout I wasn't able to compete, so I had to leave the technology staffing industry or at least the immediate geography. This was in 2001, just before 9/11, which worked out okay for me because I took a nice buyout, we negotiated the package, there wasn't any emotional thing, you just pushed the button and I got bought out. So I got bought out when things were good and we were on the rise and about eight months later the business declined to almost nothing and they had to sellout to a competitor. I took the buyout and I took some of that money and I started investing in real estate, so this is 2001, I believe, just before 9/11 when the stock market is going down and the real estate market was really down but just about to take its first spike. So I started buying really, really rundown suburban rental properties and it was also the time that they were doing the subprime lending, that was just starting to get into big shape, and I was taught by a guy who essentially took advantage of me how to work the system so that once it happened to me and I figured out what he did, I turned it around and I ended up buying, at one point I had 64 buildings. Now I told you my father was in real estate and he bought rental properties and when I told him that this is what I was doing he said "You're crazy, rental properties are terrible, it's just a pain in the neck, you're not going to like it," so after I bought my first one he said "What do you think?", I said "This is horrible. This is the most miserable, obnoxious business I've ever had to be part of," and I said that the only way to make it worthwhile would be to buy lots of them because then, as aggravating as it is, you've got enough money coming in and it's worth the aggravation. So I did that and I bought as many of these properties as I could and I did it really taking advantage of the subprime lenders who would loan money to anybody. Again, I hope I'm not implicating myself in any crimes, but I bent every rule that you could possibly bend and I ended up buying all these properties. However, I didn't fix them up very well. I spent so much time in court, tenants saying I was a slum lord and that the properties were closing down and me duct taping them back together just enough to be able to rent them out so it was a vicious cycle, however, just when the house of cards that I had been building was about to collapse, the real estate market went through the roof, people were spending all kinds of money on just the dumbest properties and I was the keeper of all the dumbest properties in the area.

Jaime: You were like "Yes!"

Craig: You've never seen so much garbage in one place and that was me. So these buyers were coming from New York City because the rental prices in upstate New York were as bad as city prices in California. They were buying things sight unseen, which was good, because you didn't want to see the crap that I had. I ended up selling all of them except for maybe ten of the best, which still, on a scale of one to ten, I'd put them at about three or four. From there I couldn't rebuy in that market so I got the brilliant idea, and it wasn't my brilliant idea, it was myself and the business partner I had at the time, who also, by the way, owned a competing staffing firm and when he heard about my buyout he took a buyout from his partner and we started amassing this real estate empire together but separately - he owned his separately, I owned mine separately - so when we sold everything we said "Okay, what are we doing next?" We said "Let's get out of the ghetto and let's go to Quay West, let's go somewhere nice", so we took all of our money, we thought we were real rich, we went to Quay West and we couldn't afford to buy a park bench, not even a tree, nothing - Quay West was expensive. Shortly after that he had gone on vacation to a place called Playa del Carmen, Mexico.

Jaime: I was just there a couple of weeks ago!

Craig: Were you?

Jaime: It's gorgeous.

Craig: So we could tell stories offline! The end of the story is I lived there for five years. He went to Playa del Carmen and said "Craig, I've found what we can afford to buy - it's in Mexico." So I flew down and because we were so great at fixing up these rental properties we decided we were going to start buying land and building condominiums. The first plan, this is where the belligerent comes back into play, the first plan was that we were just going to buy the condos and rent them out as vacation rentals, but the real estate market down there, I can't say it's corrupt but it's so unregulated that basically real estate agents can do whatever they want. So while we're down there negotiating to buy one condo, our real estate agent was calling his other buyers and bidding up the price along with us, working in cahoots with the developer. So we got pissed off and said "How much does that lot right next door cost?"

Jaime: "I'll do it myself."

Craig: Yeah, how hard is that? I can put one of these together, just cement and concrete blocks, right on the Caribbean, how can I mess this up?

Jaime: So wait, before you go forward, because it's kind of insane listening to this story - the confidence that you had and the risk, I'm not going to say aversion, the exact opposite of that, "Let's give that a try," was that just innate or do you think you were not as smart as you could have been? Where do you think that came from?

Craig: I always joked that we were too stupid to give up.

Jaime: It's funny that that works - "I'm too stupid to give up."

Craig: You can sit there and scrape along the bottom and you still don't fail, you just bounce along the bottom.

Jaime: So what are your thoughts on failure in general?

Craig: I love it. You never learn quite like you do after you've failed. Me anyway, I don't know about other people. In fact we joke about this Mexican situation - that was basically a very, very expensive vacation and college. It was a great time but it felt like another couple of years in college for us.

Jaime: So tell me what happened.

Craig: We'd buy the land, we'd go under contract and we'd go back to the States and put together a small investor pool. It was all friends and family, put together with a couple of people and raised some money to go down and close on this deal. In the meantime, someone else had bought it - the whole project that we'd put together, someone else had bought. Now we had sold all our stuff, packed up our bags and we were moving to Mexico and we got down there and we had no project because someone had bought that project - you know, you do your construction plan based on the land. They had basically just hired the architect that built the one that we aggravated and said "We want to build the same thing." They're selling like hot cakes, we'll just build the same thing, we don't want to reinvent anything, we'll build that there. So that was the plan and someone else ended up buying our lot. So we were down there, two guys, with families because we were married, he had two kids, I had one with one on the way.

Jaime: You moved to Mexico, you both had families? That's insane. How was your wife? Did you think that was a great idea?

Craig: Yes, luckily I have a cool wife. I came back, I said "Honey, here's what we're going to do. I've got a plan. We're going to pack up all our stuff and we're going to move to Mexico." I think she thought I was kidding until we got the plane tickets and we moved down there. She tells the story that it wasn't until she was on the plane that she realized that we were actually going to Mexico. We didn't have any real plans to return, it was just move to Mexico. Luckily we were moving to paradise, as you know.

Jaime: That helps with your wife.

Craig: We're not moving to Mexico, Mexico, we're moving to Mexico! You were there, you saw how awesome and beautiful it was out there. There were no supermarkets, the whole north end of that town that you saw wasn't there yet, that was all jungle - in fact the north part of the town, the Italian area where it gets more European, I owned land all along and up to that jungle so we sold it off as they developed on it that way. When I got there, there was virtually nothing and now the story that I'm telling that when I got there,there was virtually nothing, the people that I met when I got there tell stories that when they got there, it was really nothing.

Jaime: How did you know that that was a good place to go and buy? Just because it was gorgeous so it seemed like people would want to go there more often?

Craig: I would love to say that it was a very scientific plan of attack but nothing I've ever done has been scientific. We were in there, everybody was buying, it was a boom town, there was pre-construction. When I tell you that we were looking to buy condos, what we were standing in wasn't even a model home, they had constructed a series of ladders to show you how tall your condo would be and what your view would be. So imagine that's how they were selling it and we're getting $300, $400, $500,000 to get "This is what you view will be. A toilet over there and maybe a kitchen over here." They had drawings but that was it and people were putting down tons of cash to buy that. How could we go wrong?

Jaime: And at the time you didn't worry about things booming and you shouldn't be buying when things were crazy high?

Craig: Well we were hoping that we were buying on the rise, and as luck turned out we were. Because in the two or three years following us going there, Playa del Carmen actually hit the Guinness Book of World Records as being the fastest growing city in the history of the universe. In the three years that we were there and building it just went off the charts. Everything that you see there all came during that period of time.

Jaime: So you had no scientific anything, it just seemed like a cool place, and yet it's the Guinness World Record's top place?

Craig: I lucked out.

Jaime: Did you have a gut feeling? Like "I should be here." Are you a faith guy? "This is the place I'm supposed to be," or was it just "This sounds cool."

Craig: It's a gut feeling but there's certainly more to it than gut. You talk to people and you get a feeling, overall attitude, and attitude can drive an economy. The economy can be going down, we see it in our own US economy - if they send out a report saying that consumer confidence is high, whether it is or isn't, people start buying, it's just what happens. So the buzz down there was so powerful that you couldn't not make money and we felt that when we got into the second phase when we were buying the residential rehabs. You couldn't mess up - you could buy a dog house, rent it out, sell it and someone was going to buy it, just because it looked good on paper.

Jaime: Wow, okay. And that was a time back then that isn't so much right now. We're not in that sort of place right now. So what happened there and how did you get to your next thing?

Craig: We needed to be in and out quick because there's holding costs on money, we had to get it developed quickly. Let me first say, that piece of land, we went down there and we had no project because we had no land. We tried to play it calm, we were in our early 30s and there's a new cruise ship in the port every morning and new people to part with every night so we were certainly doing that. One night we were coming home from the bars, and by night it might have been morning, and we were passing a local Mexican place, I had to go to the bathroom so I go into the bathroom and there's another guy, he had been drinking, and he ended up peeing on me. Somehow, me being the conversationalist I am, we start a conversation and it turns out that this guy owns the real estate agency down there and he's the one that bought the land we needed.

Jaime: And then he peed on you!

Craig: That's what started the conversation.

Jaime: So he screwed you once with buying your land and then he peed on you! This is great, this is a good story.

Craig: Yeah. So as it turned out, he was having a meeting there that night with his other partners that he bought that piece of land with and another few pieces of land and the meeting was about them needing capital because they were developing another piece of land and he said "Are you still interested in buying that land?" and I said "Yeah, I don't have a project, of course." So I called my partner in who was waiting for me on the sidewalk and said "You'll never believe what happened," so I fill him in, we sit down with the rest of his partners who had been sitting there eating and drinking all night and we come to an agreement to buy the land and we seal the deal with a shot of tequila. Of course now I've got to pay more than what I would have originally paid. We negotiate, we do the deal, and after we do the shot of tequila everyone's happy, we feel like we have a piece of land, and he says "Now we have to talk about the price that we have to submit it in." Now I hope that I'm not going to incriminate myself but it turns out there's the purchase price and then there's the price that you put on the receipt.

Jaime: This is Mexico! Crazy things happen in Mexico.

Craig: So then we have to negotiate what the purchase price is going to be. We want it to be as high as possible so that our capital gains or our tax base is higher when we're figuring out capital gains and they want it to be as low as possible. So we start that negotiation, we finish that negotiation, "Okay, we'll seal the deal with a shot of tequila," and we have another shot of tequila, but then there's something else that we've got to do, "So when are you going to give us the cash?", another negotiation. So we finally got to the point where i started insisting that we seal it with another shot of tequila that we finally felt "Okay, no more tequila, we're done negotiating, you guys sell us the piece of land," and so that's how we bought the lot.

Jaime: Things happen over drinks in the middle of the night. That's what happens. So you have the land back.

Craig: We got the land back and the rest of the story, essentially, it took us so long to develop this first condo complex that the market fell out from underneath us and we still own about half of the units. Fortunately we all went in with cash so we're not paying interest on our money that's not there, we've got most of our principle investment back, so basically what's sitting there is our profit, but it ended up just taking so long to do and in the meantime we've bought other things and flipped properties and flipped real estate - I told you I bought those pieces of jungle with the marshland and everything, so we were able to make money down there and make it worth our time, but the initial project took so long that we're probably going to end up breaking even on it - we won't lose money until we sell and can afford to sit on it so we didn't fail, we just didn't exactly run out of there like gangbusters, we're going to trickle our way out of that particular project. But while we're down there we're making friends, we're going to other bathrooms and meeting more people and deals are coming along, you meet people on the cruise ships that come in and they want to build this, they want to build that. So we put together a bunch of other deals while we were down there, and my business partner is still down there - I've been back for about five years but he still lives there, he has the biggest real estate business down there. He has a small constructionbusiness, he has a business where he does furniture. So next time you're down let me know and I'll connect you with him.

Jaime: I want a place down there!

Craig: That's right.

Jaime: I think that's really interesting that you didn't make any cash on what you had there. But where did you get the money? If that was fully cash, where did you get the money for all the other projects?

Craig: With other investors. I was telling you about the people coming in off the cruise ships, you just really need to be out and about - deals don't just fall in your lap. I joke with our sales team here that if I come out and I see people sitting around looking at their computers "What are you doing? Are you waiting for the client to call you? Get on the phone!" The same thing happens when you're trying to be part of a community and make deals happen. For the lack of a better term, you need to walk into lots and lots of bathrooms before you find the one with the guy who's going to sell you land. So when you're out there, like I said, there's a new cruise ship in the port every morning, and that's 2000 new people. We've met some extremely, ridiculously wealthy people who get down there and want you down there for a day, "Oh boy, do we have a deal for you!"

Jaime: Then how come you can't sell your condos?

Craig: I'm not going to the bathroom enough! So that's how - you dig up people who are interested in investing down there. You have to be honest, especially in that type of area, because they're very skeptical of who they're going to do business with, so if you get a reputation, which we established, of doing the right thing and being sharp guys, just doing right by our investors, so when they did due diligence on us they found out that we're guys that they can invest with. So that's how we got the money. We always had a little bit of seed money but we weren't able to fund the entire project but we would go in on projects with other people.

Jaime: So you don't let the lack of capital stop you? So tell me about what's happened since - because we were e-mailing back and forth and you were telling me it doesn't matter what industry you go into, you can go into an industry and figure things out. It seems like you're the type of guy who looks for opportunities so tell me about how you look for opportunities.

Craig: I still do real estate but the way that I find opportunities is, again, by being out there and meeting people and being part of groups. There's 55 people locally who are exactly like me and those 55 people are out being approached by other people because they're known as people who invest and make projects happen, soyou build this network of people where you have a reputation so people come to you and say "I've got this project, what do you think of it?" Sometimes they're pitching it to you, sometimes they're just looking for ideas of how to do it and you jump in with them - "This is such a good idea, let me invest with you," or "Let's take it over together and bring it over the finish line," whatever it may be. So they come from different areas. I would say that, specifically, just like being a sales person, when you need to go to networking events, you know you need to be at them because at those networking events you meet potential future clients, well the same thing happens when you're an entrepreneur - you need to be out and about and you need to be part ofthese circles, you need to go to networking events so that you have the opportunity to be in communication with people who have these projects and that's just how you hear about things, through the grapevine, people either know of you or know someone who knows you and one way or another you find them or they find you - like I said, to the sales people, they're not going to just call you, you can't just sit around inside your house and wait for them to come knocking on your door, you have to get out there and talk to people, let people know that you're interested in creating another project or interested in something. Oftentimes it's your friends - I don't think I have ever had asingle business where i didn't have at least one other partner, so it's your friends that will convince you - "Hey, I want to do this, do you want to do this together? I know that you know how to do business internationally, this is an international project, are you interested?" And you look it over and if it feels right then you do it. A lot of my projects are projects that people brought to me and gave me the opportunity to come in on it and other times it's projects where I sought out other people. When I was new at investing I had a mentor who was a real estate attorney, the greatest guy in the world, and I would go to him and say "This is what I want to do," and he would show me how to put money together, often he would have the money, or he knew the group that would come together and say "Let's do this," and I would do the leg work and he would do the money. It's very much like that - you're just out meeting with other people ' you bring your project to other people or other people bring the project to you.

Jaime: So it really is about who you know, like the whole adage it's all about who you know and the bigger your network gets the more opportunities. How do you decide which opportunities are good and which are not so good?

Craig: Like I said, I don't have a very scientific approach. In fact, I was hanging out with some friends at a baseball game just this past spring and they said something really funny - I was telling them about a project that I was just getting started and, in a nutshell, what I'm doing, hopefully no one sees this and beats me to it, but what I'm doing is buying a whole bunch of mooring buoys and putting them all over the Cayman Islands. The idea there is that anywhere else in the United States, like in Maine, you want to put a mooring buoy you can't, because there's a moratorium on mooring buoys, but you can go out there and buy existing ones. It costs about $5000 to put in a mooring buoy so the idea is than when there's enough mooring buoys down there the government will put a moratorium on it because they don't want any more mooring buoys and it will add value to my mooring buoys.

Jaime: You're making your own industry down there!

Craig: That's exactly how we do it

Jaime: That is so risky, though! If they never put that on there you have a whole bunch of things.

Craig: Well I'll have a bunch of mooring buoys. I'll buy a boat and go down there and go from buoy to buoy and go scuba diving, I'll put them in nice places, or I'll rent out the buoys. Something will happen. Maybe not in my lifetime, maybe that project is for my kids when they're older, maybe my son will be down there with a rowboat collecting rent off the mooring buoys, who knows?

Jaime: That's awesome. That's crazy, though. So what made you decide to move forward on that? Because every entrepreneur have thousands of ideas and thousands of opportunities come through and most of the time people won't necessarily take the action so what made you decide to go "Yeah, I'm going to do this one?"

Craig: When I tell my friends about this business they start laughing.

Jaime: Just like I did.

Craig: They've known me long enough so the reason that they're laughing, they finally calmed down, they got up off the ground where they were rolling around, I said "What are you guys laughing at?" They said "We're not laughing because it's a crazy idea, because it's actually a pretty logical and sound idea. We're laughing because we've got to know - what are the ideas that you say no to? As crazy as this was, there have got to be some real doozies that don't make the cut." So that's your question - how do I come to that idea? Let's go buy 100 mooring buoys and dump them around the Cayman Island. Like I said, it's not a scientific approach, it's really a lot to do with a gut check for me - number one, it has to be simple, the saying "keep it simple, stupid", it has to be simple for me, I'm a simple guy, so it has to be simple and it has to be logical, so whether I'm looking at a potential business like this mooring buoy idea or even a rental property, to this day I'll walk up to a property that, on paper, looks like it'll make money, I'll walk through it and, financially, I'll think I can rehabit and I can have it come in at a price that'll make it worth holding it and I can rent it and it will all make sense, but sometimes it could be as simple as the shape of the building - you know when you talk about getting your arms around something? If it just doesn't strike you as something that you can get your arms around, and I guess the opposite way to say it is that if it looks like there's too many cornersfor problems to hide, I would shy away from it. I'm speaking literally and physically sometimes - if a building looks like it'sbeen added on to a bunch of different times and it's taken a bunch of turns and there's an outbuilding or there's this, those are all places where you can have structural issues, you can have rot, you can have a bad foundation, all that stuff is expensive. You can have ice buildup - you're looking at it in the summer but during the winter it's going to have ice buildup and it's just ruining the roof in that corner and you don't realize it. So it has a lot to do with just being able to get your arms around the project. So in the case of a building and everywhere I turn there's another building or there's another turn, whatever. If I'm walking up to a nice, square, clean box and you don't see too much water damage and you can see the foundation then, if I had to rebuild the whole thing, at least I can see how many problem areas there are, I can see them all. The same thing with these deals, like the mooring buoy deal, what could go wrong? I guess the government could decide to take them from me, because you don't have titles for the mooring buoys. As I start building it up and adding more mooring buoys somebody could figure out what I'm doing and they could start doing it, the government could stop me from buying any more mooring buoys, and that's about all that can happen - it's just mooring buoys. These are physical items - I can take them and put them somewhere else. I can sell them, it's an asset. Part of the $5000 cost is installation but part of it is the cost. Fortunately I have friends who own boats and boating supply companies so I could probably sell the mooring buoys to them if I need to. If I had to liquidate I could liquidate. I'm doing it with a partner who does a lot of business in the Cayman Islands so I'm not the brains of the operation, he's done this, he's built a mooring buoy and he owns a couple of pieces of property down there, he has a boat down there, he's, right now, in fact, circumnavigating the islands so he can figure out whether there's GPS in all the areas we want to put them.

Jaime: That makes sense too. Because you just saying "I have a great idea, I'm just going to jump into this industry that I don't know anything about," but you have a partner that knows the industry, that makes a lot more sense. So, like you said before,you go in with partners - do you highly recommend partners? Because I've heard both sides of the coin, especially on these interviews, sometimes they go horribly wrong and they have a business divorces and sometimes they're the best thing ever because you can share expertise and time.

Craig: I personally very highly recommend partners, but that's got a lot to do with personality. This is coming from a guy who was bought out and ousted by his first partner. I still, personally, very highlyrecommend partners, but I recommend it for the same reasons you mentioned, obviously it's nice to be able to spread risk, it's nice to have someone you can collaborate with but I also do it, you might have noticed this about me, because I really enjoy having a good time. I also do it because when things are going well it's awesome to have somebody to share that with. Close some big deals and take some money off the top and go to Vegas or the Cayman Islands, knowing I'm not going to come back until I've got no money left, I'm going to spend every dime of this one way or another, and it's nice to have somebody to do that with. As nice as it is to have somebody to bounce ideas off of and to share in the risk with, and I'm not downplaying it, that's massively important, for me it's equally as nice to have somebody to share in the success. It's no fun at all celebrating by yourself, for me anyway.

Jaime: That makes sense on why you do this with your friends - you don't want to be celebrating with a random person. "We made some money but I don't want to go to Vegas with you."

Craig: The other part of that is you don't just walk into partnerships. If I was to give advice on partnerships, the greatest lesson that I ever learned with regards to partnerships was when I was ousted from that first company and the lesson was fortunately my partner was wise enough to have us set up a buy sell agreement before we set up the business. So we were all friends, we all fully expected this to work out, great. However, at that time we planned our exit and because we didn't know which side we were going to be on we wanted it to be fair - we didn't know if we were going to be the one to be bought out or the one doing the buying out, so it just had to be logical and fair. We put it together, it was pretty simple. There were four of us and we said for any one partner to be ousted the other three have to agree to get them out, irrelevant of who has partnership, ownership, if one guy has 10%, one guy has 35%, it had to be unanimous amongst all the partners, andwe had also predetermined a formula to figure out how much they get paid and how much down was paid at the time of the buyout and what the payment terms were, so it was as simple as them making the emotional decision to get rid of me and then calling me in, getting security guards because I was obviously going to blow my stack, and telling me. But after that there was no more discussion because I knew what it was, I had negotiated it, I had agreed to both sides, so there was no more conversation, it was just a matter of "Okay, what's our balance sheet right now," apply the formula, here's the check you need to write me and every month after that, this is the amount you need to give me. It was as simple as that.

Jaime: Wow. It's amazing that you can go through something like that so easily. I'm surprised it didn't scar you as you moved on and entered into more partnership agreements.

Craig: No, it didn't scar me - I was ajerk.

Jaime: At the time did you know you were, though? You weren?t "I can't believe they did that to me, that's horrible!"

Craig: Only recently have we begun to get along with each other and talk again, that's me getting along with them. It didn't hurt that, eight months later, the whole business failed. I was happy to watch them choking on it.

Jaime: I can see that. But then youwent ahead and did it again. Tell me, if you didn't have that buy/sell agreement beforehand and you went through months of business divorce negotiation do you think you would have been so eager to go into partnership again?

Craig: I would have just done it and learned. I would have made sure that I set it up right the next time. I even learned a lesson there and that's that I didn't take and I didn't know to ask to take a personal guarantee, so when the business went under I got screwed out of a lot of the money because the business went under and I didn't have a personal guarantee from those guys. So as great as it was, it was still a kick in the pants.

Jaime: But you made off a little bit better than they did! Do you believe in luck? Because listening to all your stuff, you're in the right place at the right time, do you believe in luck?

Craig: No.

Jaime: Really? Okay.

Craig: I believe that we make our own luck. I joke, again, with the sales people - they say "You've got to be in the right place at the right time," and as a sales person, the same thing as an entrepreneur, it's not so much that you're at the right place at the right time, you've got to be in all the places all the time and so logically speaking, statistically, you'llbe at the right place at the right time. You can't figure out where to be, you've just got to be out there, keep your ears open, don't say no to anything, don't laugh at anybody, just be everywhere all the time and eventually you'll see the right opportunity. It's the same in selling - I'm sure a lot of people that are going to bewatching this are probably sales people so this will resonate with them - you make 1000 phone calls not because you think all 1000 of those people are going to answer but because two will say yes.

Jaime: I remember my mentor, one of the first days I came in, he was like "You're making 50 cold calls - go!" That's what you've got to do, you've got to make sure you're taking those steps, that action. People shy away from action and hope it will be easy but, like you say, you have to be everywhere, which is really difficult, you have to push to do that.

Craig: You have to be in as many places as you can. But you could be everywhere - like I said before, there's 55 guys in our chapter here and those 55 guys are in many places most of the time, just as I am, and it comes back to those fingers - as you get those fingers out there, it's not usually directly to me, it's from somebody else to somebody else to me. You really can be, especially in a smaller market, you can be everywhere all the time.

Jaime: I love that. Because you don't necessarily have to be everywhere physically, but you need to be everywhere. We have to start wrapping up, so the last question I ask is what's one action listeners can take this week to help move them forward towards their goal of a million?

Craig: I would say, based on what I was just talking about, I would say if I were to start tomorrow I would probably say commit to finding five new networking groups, new ones, to join to put yourself out there more, but as importantly as joining them, be open to what everybody is talking about. Make friends and let them know that you're looking to do something and that you're open to any idea about anything so that it doesn't get screened out. I guess what I'm saying, in a nutshell, step one is get out there and put a number to it ' five, five new places that will get you out there, and number two, be open and let people know that you're open to the craziest of ideas, because those are the fun ones. You sort through all that crap and you find what strikes you the best. It's not that they're all bad ideas, it's just maybe they're not the right ones for you.

Jaime: That's really interesting. The follow up question to this is - going to networking events, do you judge them' This one doesn't have the coolest people, this open does.

Craig: You can't. I wouldn't have chosen the bathroom. There's no such thing as meeting a bad person. Well, if they rob you, that's bad, so stay out of dark alleys!

Jaime: He could have robbed you or been the best business opportunity ever! And you never know and that's the sad thing. So learn karate and then go to bathrooms!

Craig: Everyone else wears flip-flops so you wear sneakers.

Jaime: Thank you so much, Craig, I really appreciate it. Where can we find out more about you and your companies online?

Craig: Pinnacle is www.pinnpeople.com and that's the recruiting and HR business, that's the best way to get us.

Jaime: And that's a different one to the one you started before, I'm assuming? Because you still are the head of that one.

Craig: Yeah, we never got to that part of the story. To wrap it up, when I came back from Mexico I needed to do something, I really hadn't planed on moving back to Mexico, so I just took a job working for a HR organization that wanted to build a recruiting business but they were owned by an accounting firm, it's strange, so as I was building the staffing business, which means you put people to work, you hire contractors on your payroll, the accounting business was getting stressed because they viewed additional head count as risk, so they thought we were working completely opposite of each other. Long story short, that didn't work out, so we basically took the HR and recruiting business out of the accounting firm. I needed  a name,  everyone still knew me as the guy from Pinnacle fromback in the day.Pinnacle had been sold but not used - basically the company that bought it took our client based but just shelved the name, so we took Pinnacle back and put the name on shirts and went back out to networking events and started saying hello to people as Pinnacle.

Jaime: And now you're back!

Craig: Now we're back.

Jaime: That's amazing. I was wondering how that all came full circle, because I looked at your website and you're one of the guys.

Craig: I'm one of the guys.

Jaime: That's amazing, it all works out in the end. Thanks so much for coming on Craig, I really, really appreciate it.

Craig: It's my pleasure, thanks a lot for having me, it was a lot of fun.

Tags: business startup, Craig Fluty, Failure, Fear, finances, millionaire interview, Startup, Wealth Building

Categories: All, Business, Business Model, Entrepreneurship, Fear, Finances, Marketing, Mentors and Mastermind, Millionaire Interviews, Relationships

Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.

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