I Built A $2M/Year Trade School With A Strategy Nobody Is Talking About
Hello! Who are you and what business did you start?
Hello, Starter Story community. My name is Hector, and I co-own an online trade school in Texas called the National Trade Institute. I offer high-demand Healthcare, Office Development, HVAC, Electrical, and Plumbing courses.
I’ve helped over 350 students enroll in our trade school with a GRANT no one is talking about called “WIOA.” This grant has paid our school over 3 million in our two years in business.
What's your backstory and how did you come up with the idea?
My journey began in March 2020, right after COVID had begun. I was a VP of a financial services company, and we were doing layoffs, including huge pay cuts for leadership, including myself. We were sent home for an uncertain amount of time. I would use my commute times (1 hour each way) to figure out how to go into business for myself. After very little research, I went all into an insurance franchise.
I invested over 40k to get this new business going. I crushed it my first month by selling over 50 policies. I was so excited that I could do this from home and provide for my family. Then, just three months later, I lost over 60% of my carriers, making it extremely challenging to sell. The support they promised me wasn’t there anymore.
As I began to question what I had done, I got a call from a former employee of mine. He was looking for school and truck insurance. I said, “School insurance”? What do you mean? He replied - I opened a school to offer CDL licenses because it’s in high demand. I had to see this for myself, how can someone own a school? How is this a business?
After spending a few hours with him, I had my aha moment. I love his concept, but the world was shutting down and changing every day for us. The fact that every student enrolling in his school was getting a grant through the local county blew my mind. This grant is in most states. If you meet certain eligibility requirements, you can learn a new trade/skill set, and your county pays the entire tuition up to a certain amount.
My mind was shocked, mind-blown, and I quickly told myself…this is it. Had I not failed at this insurance franchise, I would have never got this call. I have zero experience and no trade background, but I have a PHD (public high school diploma).
Take us through the process of building the first version of your product.
Because most of the world went home in 2020, I did a ton of research on this grant called WIOA. I unofficially and accidentally helped my friend scale his school by adding online-only courses. It scaled so quickly because everyone was home and scared to go anywhere. He was happy to pay me a small salary to help him structure and implement processes. If you can automate it, we did.
Before we reconnected, he didn’t have a CRM, lead gen capture, spreadsheets, QuickBooks, or an actual way to find out what’s working and what isn’t. All I knew was who bootstrapped this school for 30k. Three months into this, the school was generating about 100k per month. My head was spinning that the local counties had been hiding this secret grant.
Everything was sunshine and rainbows until he started changing his way of thinking. He wanted to take more in-person classes with different trades. Meanwhile, I enjoyed taking more online classes only because of the 85% margins. In-person means instructors, equipment, and a bigger space for the school, just more headaches. Not to mention, it’s still 2020, with so many restrictions and mandates.
Over time, I lost these battles and watched him rent out a huge space, promote more in-person classes, and buy expensive equipment. I sat back and just watched the margins dwindle to 20%. Still profitable, but not what I was thinking in the back of my head. Eventually, we started disagreeing more, and we both wanted something different. After all, it’s his school.
I soon found out my mom was diagnosed with colon cancer. Made me think of life differently. I figured I’d get a real job again with a bloated salary so I could make some money again. I quickly found a job as a Regional Sales Manager for a mortgage company. Rates were so low it was like printing money. I grew that office from just me to 30 account executives in 3 months.
During my time there, I ran into the president of the financial service company where I had worked. He had just left that company and mentioned things had never been the same since I left. I briefly mentioned the school idea, and he had the same look at questions: How the hell does someone own a school?
We both laughed until I told him the breakdown in numbers. I showed him information and old emails with data from 100k months. He said jokingly, well, how do I open a school? I didn’t take him seriously until he invited me to lunch two days later. The lunch was the investors of the financial services company we both worked for.
Three guys in their 30s who invested in the most random start-up and had done well. Their opening line was that we hear you have this school idea that gets all its funding from the state. We pay a lot in taxes, so having some of that back would be nice. You have 30 minutes to convince us how we can do a deal together.
This was a challenge itself, considering we were sitting inside twin peaks for obvious reasons. 3 shots later, they all agreed. We left it with give us a # to pay in order for you to help us, and we can go from there.
Describe the process of launching the business.
2 weeks after getting an undisclosed amount deposited into my bank account we got to work. I worked my mortgage job from 9-5 but spent my evenings helping them get everything ready to open the school. Dealing with the state takes months, including approvals, licenses, permits, and all the red tape. I had the somewhat blue print in my head in the direction I could point them.
The formation of a website became more complicated than it should have been. The guys wanted to come out of the gate and offer 20 courses. I wanted them to start with 3. Just enough to get the state to approve it and go live. We learned a hard lesson later by offering too many courses and would later find out it’s better to be great at 3 than ok at 20.
After 5-6 months of negotiating with the state, the school was approved. During this time, mortgage rates were going up fast. I was shocked when my boss called me to tell me I had to lay everyone off the next day. I had just built this office to 30+ and was on day 2 of a new training class of 10. Here I am again, chasing a bloated salary only to disappoint everyone I hired, including disappointing myself.
One important thing I left out was part of my pay to help them, which was a sweat equity deal. When I joined the school full-time, I would own an equal share of the business, split evenly. The problem is that I can't afford to pay me the salary I need to live. I went all in any way and used that incentive to scale the school ASAP.
I’ve made over 500,000 outbounds. I’ve sent over 1,000,000 texts to prospects. I know how to get response rates with the most simple texts. Everyone has always laughed at my texts on how simple they are and how effective they work. I think everyone overcomplicates texting and calling. They make them so long and not humanize them.
Since launch, what has worked to attract and retain customers?
Here is how I helped scale this school, became the main owner, without investing a dollar. Since we get all of our funding from the state. This grant no one talks about has it’s requirements. You need the following criteria to get access to it.
- Dislocated worker (laid off)
- Be on government assistance like food stamps
- Low income - in most counties, less than $12 per hour
- Homeless - live in a transitional living shelter or home
Instead of advertising like every other school, which costs thousands of dollars. I made 100 outbounds daily to shelters, non-profits, transitional living organizations, and church groups. This is the audience that hits most if not all the requirements of the grant. This is the audience that needs help the most.
I would call and call every day until I made enough appointments all across the state of Texas. I drove from one city to the next until we found perfect partners. Here is how we stood apart from every other big college and trade school.
- Since we are an online school, that audience does not have to commute anywhere. They can do the courses from the safety of their environment.
- We decided to provide brand new free laptops to remove that excuse from the students. This alone was a big hit. Our call to action was insane. “Free high-demand online courses and a Free laptop”.
- We start classes weekly since they are self-led versus being semester-based like everyone else.
- We would also help them with job placement assistance after completion by partnering with staffing companies who need our grads more than we need them.
The 3rd group we offered to help was the big hit that allowed us to scale very quickly. It was the largest sober community in the country. At the time they had 50 plus residential homes in and around Austin, TX. Each home housed 8-10 people starting the journey of becoming sober. This group had a new residents meeting every 2 months. The average attendance would be between 80-120 new residents.
The strategy was to invest $400 worth of pizza to feed them dinner so we could have 5 minutes of their time and present the grant and school opportunity. Again, all we said is free online courses and free laptops and 75% of the room would raise their hand. Talk about ROI.
Over time, we perfected our pitch and offer. We did this exact approach with other groups and communities. This is how we made over 2 million in our second year in business.
How are you doing today and what does the future look like?
Today, our school has grown to a team of 8. We are very profitable, and the more we automate, the more we understand that we can run this school with just a team of 3. Our margins are incredible since the average county pays about 10k per student. Our cost is a laptop and the course, plus some books. Let’s just say these margins would get a huge applause if I were pitching this on Shark Tank.
Again, zero marketing dollars are spent because we get more leads than we can handle. The only thing that sometimes holds us back is that certain counties can only process so many applications. We tend to make sure we help them hit their unofficial quota.
We rented an expensive WeWork office to create culture, but now we work from home since, after all, we’re an online school. We have decided to drop our healthcare courses because the students were taking an average of 9-12 months to complete them. Instead, we are now starting to offer HVAC, Electrical, and Plumbing.
The future looks bright with trade schools. We seem to be the only ones who treat this like a business. Most trade school owners are retired tradespeople who become instructors and live in the business too much. For me, it’s very rewarding to earn a great living by helping and impacting so many students' lives. I love seeing them go from transitional living to their own apartments, wearing scrubs, and getting pictures from them at their new jobs.
I recently started watching more YouTube videos that talk about specific topics like solopreneurs. That’s how I found the Starter Story. My goal now is to step away from the school and start a newsletter that helps two audiences.
- I want to use everything I've learned to help other trade school owners scale their current schools. This way, they can start working ON their business instead of IN their business. Hint: My text messages that convert to enrollments have a 62% response rate.
- To help everyone across the states get access to this FREE grant no one is talking about. I plan to give them a free checklist that will help them get a 90% approval rate when they apply.
Don’t make the mistake of doing so much research that you sell yourself out of it. You keep letting life happen and keep thinking it’s not the right time. The right time is now.
Through starting the business, have you learned anything particularly helpful or advantageous?
Some mistakes we learned from was to stop offering so many courses and see what actually works. Which courses have the highest completion rates and eliminate those that don’t.
I’ve learned how to engage with this audience by understanding their mindset. How to present the grant where it doesn’t seem too good to be true. I continue to look for ways to automate as much as I can to create more opportunities for other projects.
Over my professional life, I’ve made over 500,000 outbounds. I’ve sent over 1,000,000 texts to prospects. I know how to get response rates with the most simple texts. Everyone has always laughed at my texts on how simple they are and how effective they work. I think everyone overcomplicates texting and calling. They make them so long and not humanize them. I plan to share all this in my newsletter to trade school owners.
What platform/tools do you use for your business?
I love systems that help provide structure and important current data. I use HubSpot for pipeline management and RingCentral for our phones. They are great for tracking and coaching everyone’s efforts. We use MOS for everything else.
What have been the most influential books, podcasts, or other resources?
I’m not a big reader when it comes to physical books. But to give you my two favorites are Tim Ferris - 4 hour work week and Simon Senek - Start with Why. I do, however, listen to a lot of podcasts and YouTube informational videos.
That’s how I found the Starter Story. The Starter Story channel helped me realize that maybe I can help more people in less time than I thought. That maybe, there are other people that want to know how I scaled this school. How everything in my head can be written and others would want to read it.
Advice for other entrepreneurs who want to get started or are just starting out?
Take action and just start. Even if there are baby steps, just start. I’m turning 42 in July, I’m new to X and most social media. Yet, two months later here you are reading my story.
Don’t make the mistake of doing so much research that you sell yourself out of it. Most of you have a great idea in your head and are steps away from bringing it to life, but you don’t. You keep letting life happen and keep thinking it’s not the right time. The right time is now.
Send yourself a calendar invite every day for 30 minutes when you have zero distractions and create action steps. Do this until you get closer and closer to starting your new journey. The other option is sit on the sidelines and keep reading stories like ours and keep wishing “one day”.
Today is the day and I can’t wait to read about it.
Where can we go to learn more?
- Website
- Join the waiting list for the upcoming first newsletter drop. I’m doing some crazy giveaways for the first 100 that join.
If you have any questions or comments, drop a comment below!
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
