Thanks to the high unemployment rate, a lot of people are turning to entrepreneurship just to get by. They can’t find a job, so they create one.
How do people turn self-employment into fortunes?
After 15 failed ventures, he found a pair of Tweezers used by diamond inspectors and began selling them to cosmetologists. $30 million in sales later, LaMagna sold his business for an undisclosed 8-figure amount.
He spoke with us about how people can turn a desperate day job into a fortune.
Here’s how to turn a day job into a fortune >>
To find out more about Dal LaMagna’s career, read How 15 Failed Businesses Led One Founder To A Multi-Million-Dollar Success or buy a copy of his book, Raising Eyebrows, A Failed Entrepreneur Finally Gets It Right.
Delegate everything you can to someone else as soon as possible. 'You need to force yourself to hire someone to do things right away,' says LaMagna.
'For example, as soon as I found out that I could go into a beauty salon with one of my slanted eyebrow tweezers and sell it to a cosmetologist, then sell her more to sell to her customers, I could have continued to do that myself. I could have gone all over NY and flew out to LA to make myself a nice living.
'Instead, I hired salespeople. I found someone else to do it. Once I found that first person, I then hired 20 of them as fast as I could. I stopped selling myself and began shipping the Tweezers and putting them in packages. Once I figured that out, I hired one of the kids in the neighbourhood to come in and take my place. I was constantly delegating.'
Although delegating work is crucial to ultimate success, it's also important to make sure you know how to do tasks yourself.
LaMagna says he was constantly turning over work to others, but only after he tried his own hand at it.
Successful entrepreneurs know all aspects of their businesses inside and out; they can teach new hires the ropes because they have already taken the time to master the required skills.
Some skills can not be learned. In that case, immediately hire another professional to pick up the slack.
Says LaMagna, 'For instance, I'm not a graphic designer. When I needed a brochure done, I hired a graphic designer. If you don't know how to do something and it takes a special skill set, then hire someone.'
Once you're on the track of hiring, delegating and letting employees take the wheel, then you are empowering employees, says LaMagna. If employees feel important, they will work harder and be loyal to your business.
'I was very big on empowering employees. I made sure my employees were happy, I tended to overpay them, and very rarely did people leave my company,' says LaMagna. 'I gave people more responsibility than they themselves wanted and thought they could handle. And people were always rising to the occasion.'
Stock options or distributing some of the company's profits are also great ways to create loyalty and make employees feel empowered.
'At the end of each year, we would distribute 5% of the company's profits to all the employees. I made the employees the owners of the company. Eventually, employees owned 20% of the company,' says LaMagna.
'In fact, when I sold the company, my employees as a group split $10 million amongst themselves. There were 200 of them, and the guy who was cleaning the floors made $50,000.'
Make time for your employees. They will be appreciative of your effort and they'll learn the business better.
'I taught my employees about the business, says LaMagna. 'We sat down on a regular basis and I initially taught them how the finances worked. We purchased the tweezers for 50% of the sales price. We spent 10% on advertising. We spent 20% on employees and then 10% on the overhead, the rent and the electricity. That left 10% profit for the shareholders.'
When employees know how things work, it can help them figure out how their job fits into the big picture; it gives them a sense of worth.
It can be difficult for founders to decide how much to pay themselves. LaMagna recommends having a set formula based on annual sales to help keep yourself in check.
'When Tweezerman got to about $9 million in sales, I was paying everyone a salary, including myself. I took 2% of sales, so I was making about $200,000. I wasn't taking $1,000,000; it was a formula and my shareholders were making 10%.'
Involving others in hiring and firing decisions can prevent mistakes, and keep you from making regrettable, rash decisions.
LaMagna says, 'We did not fire people carelessly. People do that; they get angry at someone and fire them. I had a policy where nobody could fire a person in the company without the agreement of another person, including me.'
You always want to feel important at your own company, but don't make the mistake of being irreplaceable. A successful company should be able to function with or without you.
LaMagna says, 'It is an ever-revolving process of delegating and empowering and giving responsibility to the employees -- then you have a business. It gets to a point where you have a business that stands without you.'
15 Signs You Will Be Rich >>
To find out more about Dal LaMagna's career, read How 15 Failed Businesses Led One Founder To A Multi-Million-Dollar Success or buy a copy of his book, Raising Eyebrows, A Failed Entrepreneur Finally Gets It Right.
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