Ep. #959 - Financing for Amazon Sellers
In this episode of Startup Hustle, Andrew Morgans and Don Henig expose the perfect financing system for Amazon sellers. Our guest, the co-founder of AccrueMe, also opens up about the realities of being a serial entrepreneur.
Covered In This Episode
Money is the root of almost all business growth. That is why having a partner helping you with the financial component of the business is great. And this is where AccrueMe comes in.
Don tells Andrew about the company’s financing options available to Amazon sellers to help grow their e-commerce businesses. Without monthly payments, interest rates, or required equity, it’s the best lending option in the market right now. Our guest also shares great insights on financial freedom, family, and KPIs.
If you’re an e-commerce business owner, you should listen to this Startup Hustle episode now!
- How Don became an entrepreneur (01:22)
- On stepping out of your comfort zone (10:01)
- What inspired Don’s interest in stocks? (13:14)
- About family and gratitude (14:31)
- Financial freedom for yourself and the family (16:47)
- Focusing on managerial KPIs and giving incentives (18:29)
- Implementing suggestions from your employees (24:19)
- How AccrueMe helps entrepreneurs (32:47)
- One good example of how AccrueMe works (36:39)
- The AccrueMe contact structures (40:46)
- On having insurance on your own versus having a broker (43:47)
- On taking over an existing system versus creating one according to your needs (46:35)
- Loaning money with a payment scheme that is higher than your monthly profit (48:22)
- AccrueMe requires no monthly payments and equity (49:52)
- How to get in touch with AccrueMe (51:44)
Not everyone can create something that’s never been done or create something completely out of scratch. That’s a unique thing to be able to kind of see the end, and then also, just a starting point, not knowing exactly what’s in the middle of what you’re trying to build.Andrew Morgans
This is all about growth. So we give you the money you need to grow. We don’t charge any interest, and we don’t charge any fees. We don’t have a term, so you use the money as long as you want. And we also don’t have monthly payments. You pay us when it’s right for you. I mean, that all sounds crazy, but it’ll make sense in a second. What we get out of it is we earn a percentage of profits, and that’s it. If you don’t earn money, we don’t earn money.Don Henig
The idea is that you shouldn’t be sending us money if you have opportunities. You should be building your business and growing your business. When you get slow, what’s going to happen? You know, you’re going to be flush with cash. That’s when you should pay, not when you’re growing.Don Henig
Recruiting software developers can be tricky and time-consuming. But with Full Scale on your side, you can build your software development team quickly and affordably. Once you find the right professional to join your team, the proprietary software makes it easy to then manage your team too! So what are you waiting for? Get started with interviews!
Make time to check what all of our Startup Hustle partners have in terms of support for you and your business.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 00:00
Hey, what’s up, Hustlers? Welcome back. This is Andrew Morgans, founder of Marknology, here as today’s host of Startup Hustle. Today, we’re going to be talking about financing for Amazon sellers. But before we get into exactly what that means, we’re going to talk about the history and career behind the founder of AccrueMe. Before I introduce him, I would love to give a shout-out to our sponsor, FullScale.io. Helping you build software teams quickly and affordably. Back to Don, welcome to the show.
Don Henig 00:29
Hey, thanks, Andrew. It’s gonna be fun. I’m looking forward to it. We’re gonna have fun today.
Andrew Morgans 00:33
Yeah. And I knew we were when I saw you on my schedule. I was excited. You know, I think we met in person at Midwest e-Com in Minneapolis. But I’ve obviously heard of AccrueMe before then, and honestly, I didn’t even know quite what separated you guys from the rest. And now that I’m aware, honestly, I’m going to have a hard time sending sellers anywhere else. And so we’re gonna dig into that. But before we do, as a customer on my show, I’d like to get to know you a little bit better. And what I know that the audience doesn’t know is that your career started before AccrueMe. You’ve already done some amazing things, and I’d love to get in. Where did you start, either in business or entrepreneurship? I don’t know if they went in that order or not. But, like, was it something you kind of came straight out of school? Or you jumped right into it? Or how did you get your start?
Don Henig 01:24
Alright, so you know, you ask this question differently than anybody else. And I’m gonna tell you that goes back to when I was 11 years old. Okay, as crazy as that sounds. But you know, I would ask my father to buy the Wall Street Journal. And, at the time, I think he bought the penny stock news because he was like, well, why would you want this? And I was just interested in money, in stocks, and all that stuff. So I was constantly reading about that stuff. I didn’t read about anything else. That was it. And I ended up becoming a paperboy. You know, today, no one knows what that is. But literally, crazy going, you know, on a bike going down the street throwing papers here and there. And, you know, well, I ended up taking it to the next level. I ended up going door-to-door on my route. For any house that was not buying our newspaper, I would knock on their door, and I would pitch them to buy the newspaper. So I was the number one salesman on Long Island, you know. It only has got like, you know, 6 million people. There are a lot of people here, and I sold more papers than anybody to the point where it was unruly. I couldn’t handle the route. It was so big I’d have to go back and get more papers. It was crazy. But I made so much money when I was 12. I went to my father and said dad, can you take me to the bank? He goes, why do you want to go to the bank? I said I wanted to take out a loan. He goes, why would you want a loan? I said because I want to create a credit rating. He’s like, what is that? My parents didn’t have credit cards. They didn’t believe in loans. You know, it was your old school. And so I went. I had $200. I put it down in an account. I borrowed $200 and paid it off in six months. Now I have $400. I borrowed it, and I did that multiple times. So when I was 16, I had a credit card before my parents. You know, when I was 17 or 18, I bought my first car. I didn’t need anybody to co-sign. I had a credit rating. I had a dozen loans. You know, I was already doing things. So it was in my blood. And what I ended up doing was starting a financial planning company. I taught myself how to do it. I got all the licenses. I did really, really well with it. When I learned about the mortgage world, people asked me questions I didn’t know. So I learned. And I started a mortgage company. I built it to be one of the largest in New York State, and I sold it 10 years later. I built a mortgage broker franchise similar to what I’m doing now. And I created an industry that was never done before. You know, nobody ever had this idea. So I created this idea. I created the company. I got a tremendous technology partner just when the internet started. It was incredible. I can tell that’s a whole nother story that’s amazing. And sold that 18 months later. So what do I do then? I love being on the fields with the kids. You know, that’s what I enjoy doing. That’s what my passion was. Soccer, lacrosse. So I started a soccer newspaper I built into my life. Yeah, there was no digital at the time. It was all, you know, just to play in the newspaper. So full newspaper, 32 pages. Half of that was ads. I’m the only person; I did every ad, every article; got every picture. The official newspaper for New York state soccer, with 167,000 copies per month. And I made everything soup to nuts, and I sold that, you know, because I wanted to buy another one, and it just fell through, so I didn’t see the big win there. So I sold it, and you know, make money with it. And I just kept doing these things. So, you know, I go from financial planning to mortgages. I bought a real estate company. I go into publishing. I still ordered an entertainment company. Do you know why? I don’t know if it was just an idea. A friend of mine asked me to invest in a movie. And long story short, I said, Why don’t I invest in you? He goes, What do you mean? I said, Why don’t we put a lot more money into a bank account, and you can take a salary? And then you’ll never have to ask anybody to invest in a movie shooting again. And he goes, Wow, that would change my life. I said, so let’s change your life. So we ended up doing eight feature-length films with Tom Cruise, Natalie Portman, Joseph Gordon Levitt, you know, Mark Ruffalo, and on and on and crazy stuff. And we also created and produced the Broadway show Rock of Ages, which became the 38th longest-running play of all time. Wow, yeah, I never did any of this stuff. You know, I just kept doing things that I was uncomfortable doing. Got back into the mortgage company and built a company to the sixth largest in the nation, you know, making hundreds of millions of dollars. Now, I didn’t own the company public, but I was the number one, you know, person in the company and the number one income earner in the company, which was great, you know, bought and sold 300 houses in 18 months, just because it was, you know, yeah, I let me see what this fix and the flip thing is, you know, and if there was anybody in the house, I would go to them, and I’d give them five grand in cash. And I’d say, Look, this is just lousy, you know, you know, somebody’s gonna buy your house, I bought the house, you know, it’s in foreclosure. And they’re all you know, yeah, we know, you know, I said, so here, let me help you. Let me give you a little contract here. You can give it to your attorneys. I don’t care if you sign it or not. But I don’t remember the number. But I would put them in for the profit. I said, so you know, you understand? I’m going to fix up this house, and I’m going to sell it, and I’m going to try to make a profit. Yeah, well, what I’d like to do is not just make a profit but give you some of that profit as well. They’re like, what, and I don’t remember if it was 10, or 20%, I gave them it’s been a long time now. And I would give them $5,000 In cash to start. And I’d say, Look, this is a down payment on what the profit is going to be. And this is what it’s going to, you know, go and you’re gonna get more money than this. But I wanted to help you out because you’re probably in a little trouble right now. And instead of them destroying the house, they would ask me, how quickly do you need us out? They were my partner. Now, they would all want me to win. It completely changed the mentality of everything. It was a good experience instead of a negative experience. So you know, I did a whole bunch of different things in all different industries. And then, I took five years off, and I retired. And I didn’t expect to be retired. But after five years, I believed it. I was not interested in getting back in until a bad day or a good day, or a bad day. A friend of mine told me about Amazon and Amazon sellers. And I personally love helping people grow businesses. Yeah, and I love mentoring younger people. These are the things that I did in retirement, you know, I just did it all the time. And I still do it all the time. So I pictured myself, I went to bed that night, and I had a dream. And you know, I’m going to tell you, as you get older, the dreams start to slow down. When you’re younger, you know, you’re 30 years old, you go to bed, and you’re dreaming, and you’re like, you know, you still think that if you go to a baseball game, you know, then the third baseman breaks his leg, they’re gonna say, Hey, does anybody know how to play third base, whatever it is, I’m going to be this, you know, superstar baseball player, football player, or whatever it is. And you lose those dreams because they’re unrealistic. Well, now here I am, you know, 60 years old. And I’m not dreaming about all these things anymore. You know, I’m just enjoying life. Well, I will go to bed that night. And I see myself on a stage with 1000s of people in the audience. And I don’t know what I’m saying. But I’m helping them all grow their businesses, and I’m helping them with their life. And that’s what I love doing. I woke up in the morning, and I was like, holy cow. That’s what I love doing. And this is an opportunity to help a lot of people grow their businesses, and you know, build their businesses and help their lives. I didn’t know how. And then we sat down at lunch in Manhattan, and just over maybe an hour, hour and a half, we came up with a model that’s never been done in finance. And, you know, it’s something that’s fair. And that’s never done. You know, the lender is always protected, you know, beyond beyond beyond, and whoever the borrower is, is screwed no matter what. And, you know, we came up with something that’s totally fair, and everybody wins.
Andrew Morgans 09:44
So I have to pause you have to pause there because I have questions, and if we can’t give them, we can’t give them a punchline right away. You know, a couple of things. One thing you said there was, you know, the play, first of all, to anyone listening. He went through that in, let’s say, 10 minutes or less. And, you know that career is an amazing career Don, and just, you know, I just want you to know, I really respect that. And I know a little bit more details and whatever you shared, and some of those accomplishments are massive, and something I can relate to is that, you know, I don’t even like to say I’m a serial entrepreneur, because I think it’s more of like a, you’re saying that to sound some type of way. But you truly are a serial entrepreneur. And I would like to think that I’m a budding serial entrepreneur, I like you all within a lot of things. And, you know, for me, it’s fun, like, you know, I’ve been, I’ve been, I’ve been a model when I was never model and used to have body image issues. It was cool. It was fun. It was out of my comfort zone. It was great. You know, it was like, someone volunteered me and I took a leap. Immediately, my very first show was a Hershey’s take five candy bar, and I got paid five grand when I didn’t have money to have a beard and tattoos. I said, Sure. Why not? You know, I’ve represented myself in court before. In a legal proceeding. I’ve, you know, I’m a speaker. Now, I guess I used to have speech impediments. As far as, like, getting caught up, like in front of people public speaking. You know, a lot of things that really just, I’ve done to push myself, right, not even out of necessity, just like, this is something I want to conquer to see if I can do it, you know, Can I can I run a musician as like a manager, as a general manager, kind of like you did with the movies, right? It’d be a producer, you know, toward playing music for almost five years. And there’s a part of me that’s like, Okay, I understand this marketing stuff. Now, I would really love to be able to put my firepower behind like a young musician, where I didn’t get that opportunity, I can do it for someone else, you know, and have fun doing it and kind of be involved there. So I can really relate just to, you know, moving project to project and something I didn’t used to understand. Before that I’m learning a little bit in my 30s. Is that not everyone? I believe that most people like it if you get intentional, and you live a life by design, and you make a plan, and you stick to it consistently, like you can do whatever your heart desires, if you know, and some of those dreams die when they become physical, athletic dreams. Yeah, they do. You right, okay, like the baseball third base, there’s just, there’s a limit there, right. But most things, you know, you can do, regardless, you know, as someone that’s built something out of nothing, which is Marknology. I know that to be true, I’ve shared that with others. But there’s something special about entrepreneurs that I think gets saturated a bit. It’s like not everyone can create something that’s never been done or create something from scratch. And that’s a unique thing, to be able to kind of see the end, you know, and then also just a starting point, not knowing exactly what’s in the middle of what you’re trying to build. And you know, and just going and doing that, and I remember paper outs, I was mowing lawns, and have had some paper outs. I definitely didn’t scale mine to that level. It was like, you know, my hunger wasn’t there. But I had a question about that to you, so you’re loving, you’re 12? Did you have a school teacher? Or did you have an idol? Or did you have a movie that you saw that just like, you know, got you interested in stocks? Like, can you remember that far back? Like maybe what first inspired that?
Don Henig 13:16
You know, it was just that I wanted to make money. I just wanted to make money. And I knew, you know, I didn’t know much. I knew of stocks. I knew stockbrokers at the time, and made a lot of money. And I was just interested in learning about money. You know, that was about it. I was interested in sports and money.
Andrew Morgans 13:35
Did the family not have money? Without, like, no money.
Don Henig 13:38
So you would laugh if you like me. I grew up in Brooklyn, and the house that we grew up in. So my parents, my three sisters, myself, and a dog. So six, six people and a dog with one bedroom, and one bathroom. All right, and then a basement that was probably 300 square feet, just to put it in perspective. And me and my sisters each had one corner. So our beds were in each corner, there were no walls, it was just, you know, a corner corner, there were probably a couple of dressers down there if it could fit. But you know, if they could maybe there were two dressers and you know, we’d share those. And that was it. And it was nothing. But you know, we never thought we didn’t have money. We thought we had everything because my parents gave us, you know, oh my God. You know, I think of them every day. Not only do I think of them, but at some point. Every morning, I have pictures I lay out on my desk to start my day of my parents and my grandparents and aunts and uncles to thank them all for believing in me and for supporting me and to, you know, kicking my ass when I need my ass kicked. And you know, just helping me be the person I am and helping me grow and loving me through my whole life and giving me so much fun. So every day I start with that.
Andrew Morgans 14:59
I really do that. I 100% believe in symbols. And so for a secret hack, a dopamine ride or whatever it is, like, remind you of your gratitude or remind you of what you’ve accomplished already, like, my tattoos are those things to me. But even pictures here, I know the podcast, people can’t see them. But these are some of the places I grew up around the world: Montreal, where I was born, Yan de and Cameroon, Kansas, these places that mean things, you know. But also, I think a superpower is like, you know, I was raised in a family with gratitude. First, we had nothing. So what we did is they still were positive, right? So they were missionaries. They gave back I was taught like, immediately from day one, like, you know, back and ingratitude and understood how blessed we were to be. Even though I grew up in Africa till I was 16, I still understood what it meant to be an American in Africa. Wow. Interesting, right. And so, like, the privilege that came with that way before white privilege was something spoken about or anything like that. It was like, American privilege, you know, and foremost, and came back to the US and then found out I was poor. My most by most standards, you know, it’s not until you go to a public school in a nice suburb that you’re like, Oh, wow. Like, you know, my clothes and my shoes, and everything is off when you’re in Africa. You know, you look nice, regardless. Yeah, so that was definitely a perspective shift, but something that I’ve leaned on as a superpower to just be like, you know, my gratitude starts at clean water. And like, my, my happiness starts with, with family, you know, and I built my business with my family. But it was definitely a motivating force for me. Yeah, as much as freedom would be number one, it was like, I realized I needed financial freedom for me and for the family. And so once I had geographical freedom, I was like, this isn’t really freedom until I have financial freedom. And I’ve gone really hard ever since I kind of like, you know, focused on that.
Don Henig 17:03
I’m gonna just chime in on this for a second, because I think you’ll enjoy this. And I don’t think I told you this, I’m sure I didn’t. One of the things that I was able to do, because I did well financially, is, you know, not only pay for college for my kids and all that, but I went out to my nieces and nephews, and I created an Education Foundation, if you will, you know, that’s what I just want to call it, it was just a way of giving them money. And I would do what I did if you got a bachelor’s, you got 25 grand, a master’s, you got 50 grand. And if you got, you know, a third degree, like a JD or a doctor, you got 75 grand. So I was able to go into each one of their houses, and sit down with them, and my wife and I, and give them these checks. And it would go we told them first if you have any loans, it goes against the loans. And then you can use it but you know, one was able to buy our first house as a result, you know, all different stories from there. And who knows how that changed their lives, I guess, you know, long term legacy, but then I went to the next level, and I started a fund for their kids. So I think I have like 15 Great nieces and nephews now. And all of them have a smaller college fund. It’s a big number. But it’s you know, it gets spread out among a bunch of people. And I’m just hoping they stop having kids because I’m gonna go broke.
Andrew Morgans 18:29
That is absolutely amazing. It’s a wonderful thing to be able to do. Yeah, I mean, I honestly think some people have it backwards. Like I want to talk about a little story, I’ll keep names out. But I was at a conference recently, I was having a conversation with another business owner. And I was talking about, you know, focusing on my managerial KPIs. Yeah, so just having a conversation what I’ve been working on in market, ology is like, being able to look at my different departments, and be able to, like track them to a certain level of you know, we get 90% done of the work, you know, the workload like where are we at and in every area of my business, I’m a full service agency has kind of different tracking metrics for that. We haven’t necessarily been organized enough to be able to in real-time, kind of see how people are doing. It’s more of like a gut instinct, check in on them, look at projects, like Are we closing them out? But I’m trying to set incentives Okay, across not just my sales team, but incentives from the warehouse to the account team, to the creative team, to everything and to me, this is like a no brainer, it’s like, you know, you take care of once you add a certain level I’ve got we’re just shy of 40 people. My job now full time is to take care of the people like you know, serve them best, figure out how to make their jobs better, and how to make them better. You know, how to set us up for success, go out there and get fun projects, not just, you know, projects that grow the team, all that kind of stuff. And so for me incentives are like a no brainer, even to the point of incentivizing people that don’t you know that don’t have sick days that don’t call in or that just do the status quo. But if they’re doing that, and crushing that, you know, don’t don’t hold them back. So these are just, you know, things I’m experimenting with as a leader. And I got pushback, I got pushback from the gentleman. And I was just like, oh, from the other guy, okay. Yeah, from the other guy, right? I got, you know, he’s a business owner. He says, I’ve been in business for 30 years, I’m like, Okay. And he’s like, you know, he had a, he had a team before, where there was a sales team, which I got out of him. And I’m like, Listen, I’m trying to incentivize people that aren’t just sales, like, you know, trying to advise all my employees. He said, you know, what they’re doing is they would like they would get these leads from the internet, they’d be called. And then they would like to sell them on an upsell, or on some products, or like, you know, something back in the day, and they created this incentive, where you could kind of price it however you wanted the item to the customer on the phone. And if they price it high enough, they would get these bonuses from the company. That was the incentive. Like, if you sell this at $300, you get x. And if you sell it for $200 a unit?
Don Henig 20:58
I don’t like it. First off, but that’s a whole nother story.
Andrew Morgans 21:01
Why should you change the price? Yeah, but but, you know, essentially, what was happening was, they were marking that price up a ton to hit those incentives. And then on some other items that they were selling, they were essentially taking the money from these and moving it over there. And I said, you know, in my mind, they were just responding to the game to the system that was like, you know, this is already a kind of cricket thing. So like, why not move it around, and hit the goals, we should be getting paid for all of them. And I didn’t really pick apart his methodology I just picked apart like, you know, the difference in people and the difference is like, you know, I’m sorry, I don’t know who those people were, I don’t know what your system was, you know, but I couldn’t understand. And he was just adamant about, you know, not incentivizing your people, thinking that would ruin them. And I just walked away from it, like doing my best and not not engaged, you know, and into something deeper, I can see my other sales guy with me just like, trying to zip his lips as well. Because never in my life. Like, you know, and if I’ve learned anything, it’s that like, whatever you give comes back tenfold. And so it’s like, it honestly becomes a game just like people consider failing, the way to learn. And so you embrace failure, and you jump at it. That’s kind of how I think about gratitude as well and being able to give, it’s like I’m giving as much as I can, because I already know the principle it comes back.
Don Henig 22:26
Yeah, so I want to chime in for a minute, because I’ve done incentives in all my businesses, with, you know, entire companies, imagine having 1000s of employees, and creating incentives for each one of them. Wow. So it takes some work, it’s not an easy thing. But if you do the incentives properly, then you’re going to get the right results. If you do it improperly, you’re gonna get the wrong results, he did it improperly. His goal was not to do the right thing, his goal was just to put more money in his pocket. And that’s not necessarily the goal. Like in your goal, your goal number one goal is not about putting more money in Mark knowledges pocket, it’s about helping your clients grow, and be like superfans increased, that this is the best company, the best decision I ever made in my life, is to work with Andrew and Marknology. Because Susie, over here in the warehouse, is just killing it for me when I need it. Like, you know, that’s what your goal is? Yeah. And how do you incentivize that, and I’m sure that’s what your incentives are doing. And so I think that just is an absolute right thing to do. But it’s very important, it’s not something just to jump into something to make sure you do it correctly.
Andrew Morgans 23:43
And I think that’s where, like, for me, it’s been every single department, every area I’m in needs to have its own separate ones, you know, can’t be a generic apply. All right. And so we’re now to that point where we can track it, which means that I can incentivize it, you know, and I’m excited about that. Because I think that’s where you can get people to care, you know, that just next level, you know, you just hire the right person.
Don Henig 24:04
So stay with that for a second. Another big thing for every business is to engage their employees in Gleek, engage the staff, so you know, you have different groups doing different things in your organization, but to sit with them, you know, and whatever the department is marketing department, whatever it might be, and it might be 10 people in there and sit with them and say, Okay, what’s good, what’s bad? What impediments are we putting in the way of you doing the business better? How can I help you, you know, things like that. And I’ll give you an example. You know, a very simple thing called, you know, a suggestion box, you know, very basic right? Well, I started the suggestion box in my very first mortgage company, and one of the things that I learned from it, and I did it in every company afterwards, all right, including with 1000s of employees, not an easy thing to do. And, you know, I got plenty of pushback from the senior team because I wanted them to review everyone, and like that work on to their plate, but it changed the company. And so with what I learned from it is that when you do suggestions, if you’re getting more suggestions every month, you’re doing something right. The companies, the people are engaged, you were hearing about quiet quitting, you don’t have quite quitting, people are engaged in the business, they want the business to do better. So the first suggestion, and every every month, you know, whoever in the best suggestion that was implemented, it had to be implemented, would get money, and then they go into the pool for the quarterly and annual. And the first suggestion, I had to ask this girl, Regina, this is like 40 years ago now. And I went over to Regina and I asked her, What do you mean by this? You know something about the lights in the parking lot. And now I own the building. And we had a beautiful brand new building I built. And you know, it was a little remote on Long Island, it was right off the main road. But you know, we had a lot of trees. So she said, Well, you know, I like to work later. And when I leave at night, the lights are out. And I feel a little nervous walking out to my car. The lights are on a timer, all it took for me was to go into a closet, change the timer. And now the lights are on. And not only did Regina want to work later, but so did a lot of other people. And so now, this stupid thing, this little basic thing, I was II able to change in two seconds. And I got more work out of everybody. And that’s what they wanted to do. Everybody won. And it was amazing. When I did it in the mortgage companies, you know, again, 1000s of people implemented this. The first one was something about the interest rates on our rate sheet at the time. And again, what do you mean, put them in the proper order? Well, as it turns out, our first page would be fixed rates. And they would go from the highest rate to the lowest rate. And the second page would be adjustable rates. And they would go from the lowest rate to the highest rate. So you have to think the opposite when you’re thinking about each one. Well, that’s stupid, I would never see that. But that was one of the first ones that was the first suggestion. Easy, easy, easy change. And everybody was able to do their business better. And now that person and everybody in the company knows that we’re implementing what you say and what your ideas are, and we’re congratulating you and compensating you and appreciating you for that. And the company, just the amount of suggestions we got. were off the charts. Amazing. And well, we gave huge prizes and everything. But it was so much fun. I love it. We built technology to manage it because it was unbelievable. It was great.
Andrew Morgans 28:01
The feedback, you know, I love that. And I think that when you really are trying to be the best. Yeah, just make money. Right? Yeah, that’s, that’s when you lean that direction. I want to take this conversation and talk about AccrueMe. So anyone listening can really understand what exactly you guys are, why you built it and how you can help sellers or help businesses. Before we jump into that, and dive a little bit deeper, I want to give a shout out to our sponsor, finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io we can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs. And then see what available developers, testers, and leaders are ready to join your team. Visit FullScale.io to learn more. A great platform if you’re trying to develop software or looking for talent, they have everything you need under one roof, simply go to FullScale.io. Type in your search for what you’re looking for. And you’ll be taken care of. Okay, Don, so they sound great. They are amazing. It’s you know, as the founders of this show, you know, it’s a mentor of mine that built the company, an absolutely amazing company and an amazing sponsor for the Startup Hustle podcast for sure.
Don Henig 29:14
I check them out online. And I was blown away by the individuals that started it.
Andrew Morgans 29:19
Yeah, Matt and Matt, they’re absolutely amazing. brought me in and 2020 to be a podcast host and it’s been one of the best things I’ve done since just honestly go talk to not even sometimes like outside the Amazon industry which for me can be a breath of fresh air sometimes living and breathing this and you need a breather. Just getting to talk to inspiring founders and get refreshed on why did you build this? What was your “why”? You know for me it was family. You know, getting my family taking care of getting health needs taking care of getting shelter. And because of that I’ve shot much higher and been able to help a lot more people along the way, great, but when you hear You know, just get into the grind of entrepreneurship. And there’s nothing like just a positive podcast. This isn’t what this one’s called, right? The StartUp podcast, but you know, stories of, of other humans doing amazing things is inspiring to me. And when I found out, as we circled around when I found out about a crew, me, and how you were different than a lot of the other funding companies in the space that I’ve seen pop up, you know, it really caught me by surprise, I’ll be honest, it caught me by surprise. And I’ve honestly put a pause on any conversations with other companies, kind of just like, because I just, you know, I understand how those work. And you know, I’m always looking for options for my sellers. But when I found out about how you guys work with sellers, for me, it was like, Well, if I have one in need, I know where I’m gonna go, or at least it’s going to start the conversation starts with you, Don, let’s serve the audience, like, you know, your story led up to like, you know, what you guys created in Manhattan, you sat down, you came up with something, you know, like, unique for this industry. I feel like I’m sure someone can prove me wrong. But I feel like what I do with Marknology was that I started in services 1112 years ago. And so I wasn’t a seller or a software developer that like started doing agency services or anything like that, I really felt like I was out there trailblazing and being one of the very first service providers in this space, just was in Kansas City and wasn’t everywhere, right. So, but I felt that the weight of starting something brand new, that people don’t know about, is almost like, to me, the strategy is like demand generation versus demand capture, there weren’t a lot of brands and manufacturers looking for Amazon services, I was having to convince them that they needed it. And you know, now they’re now they’re looking for it. And it’s like, hey, choose us, like, you know, this is our reputation. This is why you want to work with us. Financing has existed for a very long time, right for mortgages, to all kinds of things. And it made sense for funding to come up around the Amazon industry, just in the same way that the trademark office sped it up to be two weeks to get approved on Amazon, a lot of things have evolved because of this industry we’ve created. Talk to me about what happened in that room in Manhattan. And you know, what’s grown out of that, I want to hear the details.
Don Henig 32:19
Well, there was a kangaroo.
Andrew Morgans 32:23
And while in Missouri, I didn’t know that I just found out either. For some reason, they think it’s important to our ecosystem.
Don Henig 32:33
And now we have native to Missouri, a big gorilla, and then we’ve gotten into some crazy jokes.
Andrew Morgans 32:36
Yeah, I know, this is a joke master too.
Don Henig 32:40
So, you know, what came out of it is I didn’t want to be like everybody else. And you say lending has been around for a long time, it’s been around for over 2000 years. And you know, I think back to it, that it was done the same way. For 2000 years, there’s a little difference here, a little difference there. But it’s really basically the same way. And it’s the lender giving you money, locking you up every which way they can to make sure that they never lose a penny, in lending. That’s the goal, don’t lose anything, we, if we don’t make something, that’s one thing, but don’t lose anything. And if by chance, things don’t work out, they’re going to take your house, and they’re gonna take anything they can, they’re gonna go after you and make life miserable. And that’s just what it is. Well, we decided, I decided personally, I didn’t want to be a part of that, you know, I’m beyond that at this stage of life. I don’t want to be the guy that’s, you know, going after people. And I don’t want to have something that is negative to them in some respects. So we came up with something that’s never been done before. And it is awkward going out. And because people don’t get it. And the argument we get or the objection we get is, it sounds too good to be true. And I’ll tell you how it works. But they all say it sounds too good to be true. And they want to know what’s the catch, and there is no catch. But if anybody ever did this in the past, there’d be a catch. So you know, just the way it is. So here’s what we did, we created this, it sounds crazy. We give you the money to grow. And it’s all about growth. If you need money to just pay bills, we’re not the ones. This is all about growth. So we give you the money you need to grow. We don’t charge any interest and we don’t charge any fees. We don’t have a term. So use the money as long as you want. You know, we have we have so we also don’t have monthly payments. You pay us when it’s right for you. I mean, that all sounds crazy, but you’ll make sense in a second. What we get out of it is we earn a percentage of profits. And that’s it. And if you don’t burn money, we don’t earn money. You know, if you pay us off in three months there is no penalty. There’s no nothing. We earn no profit for the first 30 days. Zero. If you took our money today, and you paid it back in 30 days, you’d owe us exactly whatever we gave you, end of story. If we gave you the money today, and five months from now, you didn’t earn any profits for five months, you’d still owe us the exact same amount that we gave you. End of story, no penalty, no nothing. So, you know, that’s the way it is the way the profit share works. Again, we looked at that, like, how do we make that fair. And here’s what we did simply, you know, at a high level, you earn 100% of the profits on your money, and you earn 50% of the profits on our money. So if we did this on Shark Tank, we would win every single deal, we’re not taking any equity in your company, you own 100% of the company, and you keep all your profits, and you keep half of the profits on our money. And you pay us back whenever you want. And the whole thing stops. It’s unbelievable, really, but it’s all real. And so that’s at a high level, I want to take another minute and just give you a quick example.
Andrew Morgans 36:01
Pause there. Yeah, because I want an example. And I think I can help a little bit with this. So you know, me, and you have talked about my technology, how we’re different from some of the others and that we focus on profitability. And, you know, the full service thing, it’s not just top line sales, we even avoid the type of clients that aren’t that aren’t looking for, like healthy businesses. I just don’t want my reputation attached to some of those, and I don’t want to lose when it’s not our fault. So you got to get a healthy business, you got to get profitability figured out? How do you separate? You know, their money from your money in an Amazon account? And how do you separate, you know, what’s growth? You know, from what’s just there? Like, you know, what does that look like, practically?
Don Henig 36:40
Well, I’m gonna answer that. But I’m gonna give you this example. Because this is kind of perfect. I remember when I said that, the numbers that I said were high, high level. So at a high level, that’s the way it works. But that’s not the details. So I’m going to give you the details. Now, first off, there’s two things, let’s just say you have $20,000 in capital, all right, 20,000, what’s capital, your inventory at cost, plus your receivables from Amazon, add those up, they come up to 20, grand, whatever that number is, will offer you the same amount. If you have $20,000 of capital, we’ll give you 20,000, you can take less, just not more, we don’t want to have more money in the business. And you have. All right, so that’s our only rule. That’s the only rule.
Andrew Morgans 37:26
And that’s inventory that’s on Amazon or in your warehouse. And that’s money to be dispersed and money in your account.
Don Henig 37:35
Exactly. Okay. That’s it. That’s your capital. And we’ll match that whatever that number is, if it’s 100,000, we’ll offer you 100,000, if it’s a million, we’ll give you a million, whatever it is, doesn’t matter. If it’s 20 grand, we’ll give you 20 grand, so 20 grand, and we give you 20 grand, all right, and let’s just say you’re earning a 10% ROI. So let’s just assume you’re going to earn $2,000, on your $20,000, we give you another 20 grand, we take no profit for 30 days, after that, I’m going to assume that you’re going to start earning roughly 10% on that as well. So you’re going to have $4,000 of profit, how does the profit gets split, this is the detail, the profit gets split 5050, whatever percentage of the capital we have, so 50%, cut it in half. So we would get 25% of the profit. So there’s $4,000 of profit, you would get three, we will get one. So how’s that work, you got the 2000 from your capital, plus half of the 2000 from our capital. So the way it works, that’s where the math always works.
Andrew Morgans 38:41
And, you know, until they pay back on the 20.
Don Henig 38:43
And let’s say they let’s say next month, they pay us $10,000. Now, and they have you know, 20,000 still, we’ll just keep it simple. So we represent a third of the capital, they have 20, we have 10. So it’s 30,000, we’re roughly a third, so we would get, you know, half of a third. So you know 16%, so you know, 16 and a half, something like that for that month, and we change every month. But the interesting thing is to go back to the original example. 20 grand 20 grand $4,000 of profit, you got 3000. We got one, let’s assume you left your money in the business accrue me the name accrue is that we don’t take money out. So we’re not looking for payments. So the $1,000 that we earned stays in the business. So next month, you have $23,000 of capital, and we have 21,000. So now maybe it’s 5248. So now we represent 48% of the capital, we would get 24% of the profit. Again, you would always be growing at a much higher rate than us. So if you just think of the math on that. What happens and this is happening all the time with our sellers, is they grow so fast they get so Big, and our percentage of the capital, and the profits go down organically every month that the pie gets bigger, our share goes down. And it’s an incredible thing to see that the way the math works is unbelievable. For the sellers, they’re blown away by it.
Andrew Morgans 40:19
I love it. I love the model. I love the explanation. From your perspective, as a lender, I see the tax benefits as well. Right?
Don Henig 40:29
Like, we don’t lend, we’re actually we actually invest, but we don’t take any equity.
Andrew Morgans 40:34
Okay, so what does that look like practically as someone trying? I have, like, you know, equity and 15 companies right now, I’m also wheeling and dealing. So I’m like, you know, I’ve got some unique, unique structures, tracks structures, yeah, with, with some of them always trying to learn new ways of doing it. Can you explain that to me? Yeah, sure.
Don Henig 40:53
So it’s very simple, you know, almost all of them are LLCs, which makes it easy. And with an LLC, we just create a new operating agreement that creates the equity partner, which is the seller, and the profit share partner, which is us. All we own, if you will, is a percentage of profits based upon this calculation. As soon as our money is no longer in the company, we owe nothing, we get nothing. There you don’t need another operating agreement afterwards. You know, you can change it anytime you want afterwards. But you know, you don’t need to.
Andrew Morgans 41:26
And, okay, it sounds like that makes a lot of sense. To me, I have a partner on a smaller scale. It’s not just Amazon, a local Kansas City guy there on several projects. It’s based around a profit sharing, you know, agreement like that, without the equity play, less organized into an entity, right. And you know, he’s not trying to sell that as a business, but it’s definitely the organization. So even working with him, I have a little bit more understanding about what you guys do. It’s completely different. And I can understand why. You know, someone has to technically kind of unlearn what we know about salespeople for exactly, and then unlearn what we know about lenders. Exactly. And then if they have bad relationships with partners anyway, right? They’ve got, so you have some hurdles. Yep. But I think like, you know, as we grow, and as you get ambassadors like Marknology, which I’m a volunteer, I’m volunteering ourselves, but as you start getting those and getting people to help sell that story, you know, can make a lot of difference. And sometimes it’s simply doing it in a little bit in a little way, you know, you don’t have to take out 20,000, you know, it could be 5000 that you’ve got for this product you’re ready to do.
Don Henig 42:39
You know, and always pushing that we’re always pushing, take the least amount that you need, you know, if you need 20 grand, if you need 10 grand, don’t take 20. And, you know, if you think about it, what normally happens, so let’s just say you get an offer from amazon for $100,000. Not for nothing, you feel like you’re your Big Shot, and you feel really good, it’s a good ego boost, I remember my first business loan, and I felt really, you know, proud of myself. Anyway, now you get an offer of 100 grand, you’re probably going to take 100 grand, how much did you really need. So if you’re paying 10% Just use that as an example, you know, $10,000 on 100 grand? Well, what if you left 50 in the bank, and you used 50 to grow your business, you just increased your cost to 20%. It’s really only using 50. And I’ve talked to so many sellers on that exact example. And so many of them said, I did exactly that. And if you think about it, next month, you’re paying them back 10 $12,000. It’s crazy.
Andrew Morgans 43:47
It’s the difference in having insurance or having a broker, let’s say, that explains everything in detail to you know, and I think so often, when we don’t understand something, we’re clicked to say, well, Amazon’s offering it to me right here and I need it and it’s right here. It’s click, click click, they are already there, you understand my back end, and I don’t have to worry about it. And it’s yes there is what can be the difference in you know, crushing your business or not. And I think one thing with the AccrueMe that’s valuable is that human aspect, you know, the human aspect of having people be able to explain it to you understand what you’re getting into, basically smart lending, you know, in a lot of ways, and it’s just a better route to go to I know someone that even like it was 2020 I went to Babson College for the Goldman Sachs 10 KSB. And I actually got granted two master’s certificates in the last couple of years. One from Babson College and one from Missouri State University.
Don Henig 44:41
I’m not I’m not sending you money. Nah.
Andrew Morgans 44:46
No, I’m not a great kid either. By the way, you know, these were two universities that I’d never never expected after I got my bachelor’s and became an entrepreneur that I would get any kind of masters. It’s pretty cool. Yeah, it’s really cool. Well, When so at Babson, you know, in one part in one area of this crash course your year long thing. You know, they’re evaluating your business. You go in there with a growth plan. They help you with mine. It was my warehouse and my fulfillment center. That was the business model I went in with that I wanted to, like really focus on to grow. And in one area I got super validated about what Marknology was doing, like our marketing efforts, like what I’m doing to grow the business content strategy, my sales processes, and I don’t get a lot of validation. You just don’t have anybody at the top when you’re doing some saying like the job Drew? Yeah. And so you’re like, Am I doing the right thing? I don’t know. So one part of it was validated. Another part identified areas of weakness. And I went in and I learned I kind of got empowered a little bit about my finances, because I actually bought out a partner in like year two of Marknology to help start it with me for her out and you know, have built it since then. But she really helped me get started with my taxes, she helped me get set up in my Quicken QuickBooks and get us all going. But it was really her system that I took over and managed to keep it going, right? Instead of me understanding everything about its ins and outs, I knew how to run a budget. But really to be able to speak intelligently about it, or, like, you know, have an intellectual conversation, I felt insecure. And I’m saying this, I have a point, I’ll bring it to the listeners. But for me, it was about I got, you know, just enough education and empowerment to come back. And be like, I’m like this is too important to not dig in and learn it and learn everything about, let’s say, m&a, or finances or be able to speak to my essentially what I did is I just started speaking to my accountant and my bookkeeper and telling them what how I needed to look. And, you know, that was you know, I had to learn a little bit of the tech speak so you know, and be able to refer to that, but I was taking the assistant I’ve been given to me instead of making it work for me, right. And the difference has been an explosion of growth over the last few years from Marknology. I know it’s time to with the pandemic, but it’s been, you know, something that I’ve really jumped into, and I’m what I’m encouraging people to do is if you’re looking to take loans, if you’re looking to get capital, if you’re looking to understand the investment and giving up equity or giving up profit sharing, or these things you have, even if you don’t know enough about it, and you feel like it’s overwhelming, you have to dig in. And you have to learn so that you can protect yourself and protect your business and really understand what’s going on. So same thing with lending here. I think a lot of us. I grew up in a family that didn’t have a lot of loans and things like that, you know, in the first few years of college, everything’s been first-generation kind of learning in that regard. Same, I know how to save, and I know how to be thrifty that was taught, you know, but yeah, you know, really understanding some of that language, I’m smart enough to understand if it’s explained to me in layman’s terms, but it can be overwhelming, you know, with all the acronyms and everything. But yeah, so definitely, to them, I think AccrueMe, you know, just finding a partner that can explain it to you and show you examples and show you trends and show you case studies is so so important, you know, and to make one mistake when you’re trying to grow your business, by lending from the wrong team is, can I see, I’m seeing it a lot.
Don Henig 48:06
Right now, I’m seeing a number of accounts as I get involved in the larger accounts and million-dollar deals and things like that. Yeah, and I’m going to say as crazy as it’s gonna sound. Eight out of 10 have gone to some of the companies that you would see at any trade show and taken out revenue-based loans, and I’m seeing how dangerous they are. Because just as a general rule, if you’re taking out a loan, or whatever, if your monthly payment is greater than your monthly profit, don’t do it. Even if it’s the same, don’t do it. You know, because you need cash flow, you need cash flow to grow. And if your monthly payment imagines taking out a mortgage, right? Let’s say your monthly income is $5,000 a month, and personally, you go and take out a mortgage to buy a house, and the mortgage is $10,000 a month. How long before you file bankruptcy? It’s not going to be that long. Maybe it’ll be a year, maybe it’ll be 18 months, but you’re going to file it because you can’t get out of that. The only way out of that is to get another loan. And when you start going down the tubes, no other lender is going to give you the money. You’re out of luck. Same, this same thing. You’re Sol. You are the same as this industry. And I see that you know, I can give you examples. But you know, once you’re paying more than you’re earning, you’re on that way down the toilet bowl, and then nobody else is going to touch you. And the only people that are going to touch you are the people that you would never ever, ever, ever want to go to 100%. I see it’s terrible. It’s sad. And I want to come back to one of the things about us with the no required monthly payments. You pay us whenever you want. It’s fine. But the idea behind it is that when you have opportunities to grow, you should use all the money to grow. If let’s say it’s q2, q3, q4, and let’s just use the wholesale model as an example. Because it’s so easy. And you have an exam, you have an opportunity, you have, you know, a number of Suppliers and distributors. And one of them comes to you and says, Hey, you know, Drew, I’ve got, you know, these 10 new products. I want to give them to you exclusively. You need $30,000 to buy them from me. They’re all going to sell within 30 days at a, you know, 10-15 % ROI. And then I’ll give you the same deal next month and the same deal next month, you know, whatever. Maybe more than that. Does it make any sense for you to take money out of your business and send it to a lender? Or should you use all that money to take advantage of the opportunity? And that’s the idea if you have the opportunities, you shouldn’t be sending us money. You should be building your business and growing your business. And when you get slow, what’s going to happen? You’re going to be flush with cash. That’s when you should pay. Not when you’re growing. We have companies that haven’t paid us in two years, but they’re growing into an exit. And when they exit, all we get is our initial investment plus whatever the accrued profits are. They keep all the upside 100%. We get nothing.
Andrew Morgans 51:19
I love that.
Don Henig 51:20
Yeah, maybe a cup or a couple of cookies.
Andrew Morgans 51:22
Yeah, maybe. I doubt those in your college fund. Don, we were up on time. And, like, we might even have to go part two on this, honestly, because I have a lot more questions for you. But I’m in as we sign off, like, Where can people find you? Where can they learn more about you? I know you’re going to have a booth at the selling scale, you know, in Vegas next week, but the LinkedIn website works best.
Don Henig 51:47
So to reach LinkedIn, you’re one of these people that communicate, so don’t feel bad about reaching out. I enjoy it. And if you need anything, even if you don’t think you qualify or anything, I can help you in any way I can. That’s just what I do. So don’t hesitate. I get more people that are not in business yet but want to be, and I take the time to try to help them every single time. So anyway, LinkedIn, it’s my full name Donald Henoch, nice and easy. My email is Don@accrueme.com. And the website is AccrueMe.com. And if you click Get A Funding Offer, it’s about three minutes to, you know, fill out basically a survey, you know, when did you start? How much inventory do you have? Then, you know, we’ll ask for access, developer access, and your cost per unit. Then we run it through our system, and we are able to come back and tell you exactly what we can do. We give you all the details 100% In plain English. So I personally did that. I went through the agreements. And I said what’s important, and I, you know, I’m not a lawyer, and I just wrote it out like I would want to understand it. And so it’s very understandable.
Andrew Morgans 52:58
I love what you have learned. I’ve learned so much, even just talking to you a little bit. I need to get your ear at the conference soon. I have a couple of things to run by you. I think that’d be great for a partnership. I love it. Love aligning Marknology with amazing companies and amazing founders. Startup Hustle listeners, thank you so much for your time and your attention. Don, thank you for your time. And to our sponsor FullScale.io, which can help you build a software team quickly and affordably, thank you as well. We’ll see you next time. Thanks, everybody.