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Saturday, February 27, 2010

What Is The Best Formula To Use When Identifying a Business to Buy?


Question:  What is the best formula to use when buying a business? 
L.L. Naples FL 

Answer Marc Charles:
If you use the formulas taught by the largest business schools it would be three times net profit. So, if you buy a restaurant which has an annual net profit of $500,000, you would pay $1.5 million.

But I’m not a big proponent of business school formulas, especially when it comes to buying a business.

I would never pay $1.5 million dollars for a restaurant with an annual net profit of $500,000. There are too many reasons to go into the details here.

But the biggest question to ask is whether or not the restaurant will produce the same kind of numbers going forward --- in the current environment.

There’s a hot dog stand on the coast of Maine which has annual sales of about $300,000. His net profit is about $95,000 per year.  If the owner listed his restaurant for sale at three times net profit, or $285,000 – a purchase like this would make more sense to me.

On top of that, the hot dog stand in question is always packed with customers, and it only takes a couple of people to run it. I suspect he’s taken business from the surrounding restaurants during the current economic downturn too.

I’m not real big on buying someone else’s business though, with some exceptions.

I prefer starting businesses on a smaller scale from the ground up, with as little overhead and debt as possible….in a market emerging in a hot rising trend.

I hope that helps!

 

Tuesday, February 23, 2010

What's Your Take on Real Estate Investing in a Depression?

Question: Marc, what's your take on making money with real estate in the current economy?
M.F. Apple Valley MN


Answer Marc Charles:

In 2004, I mentioned more than a dozen times in my newsletter, blog, speeches and conferences real estate would end badly.

Three conference organizers did not want me back....even though I was the most popular speaker at two of the conferences (according to an attendee poll).

The reason the organizers did not want me back is because I kept talking about a "depression" and real estate collapse (in most areas of the US).

Anyway, that was yesterday....what have you done for me today!

We've all seen the real estate fiasco...and some people have been devastated by it.

But, the real estate boom (ans BUST) was predictable. If you had eyes to see, you would have known the boom was not going to last.

When I saw a cashier from a local convenience store drive into her triple car garage, which was attached to a $400,000 home, I knew the boom was toast. This was in 2005. The boom lasted another three years, and then kaput!

Almost everyone I knew, 90%+, was bullish on real estate from 2004-2008. The reason everyone was bullish is because in most cases they were making money.

But then the market collapsed....and is still collapsing.

Most people never realize, or refuse to realize, they're involved in hysteria. But all it takes is simple, common, horse sense. You can also seek wise counsel from someone who's already lived through hysteria or "madness of the crowd". In many cases wise counsel will be twice your age.

I've made money on real estate. But I've also avoided major losses. I did not lose one thin dime in real estate from 2004-2009. I was also not underwater with mortgages.

Anyway..enough with the long winded response!

Yes....you can make money on real estate in a Depression. The key is buying at super deep discounts, not being over-anxious about doing deals (or fearful), and paying cash whenever possible.

The problem with most foreclosure properties is finding a clear title, and a property with no liens. But that's another topic.

The days of Fix and Flip are over for now! This market may not recover for 10 years...if ever.

But you can still find incredible deals, offer even less, wait for your terms, and rent the property.

Drop me a note if you'd to know about specific markets I'm considering.

I hope that helps!

MC

Monday, February 22, 2010

Can You Recommend Any Service Type Businesses for a Rookie Entrepreneur?

Question: Hey Marc! Thanks for your great posts.....and damn, it's free! But in this case free is not worthless. Anyway, can you recommend any easy-to-start service type businesses for a rookie entrepreneur?
B.H. Des Moines IA


Answer: Marc Charles:
Hey BH....thanks for your question. I love service type businesses. Especially service type businesses for new entrepreneurs.

On top of that, I also lean toward businesses which don;t take a boatload of time, money or energy to start.

Okay......here's my list. These are ALL viable, legitimate service type businesses I've done myself or worked with entrepreneurs who ran them. They're easy to start, take almost no capital, can be run almost anywhere, and do not require tons of red tape or licenses.

Window washing --- for homes and businesses
Office cleaning
Dog walking service
PC, Mac and Gaming system repair
Babysitting -- yes, even for guys!
Eldersitting
Property management -- can be complicated but keep it simple
Freelance driver (or taxi)
Painting (homes, businesses, interior and exterior)
Mailing service (medical/dental offices, retail stores, direct mail companies)
Auto detailing
Boat cleaning and restoration
Eldercare -- errands, shopping, amusement, trips and companionship
Pet sitting (vacations, long weekends, other)
Landscaping / gardening
Telemarketing (NOT annoying sales calls -- but rather "in-bound" order takers for TV, Web and direct mail promotions)
Trash removal (commercial and residential)
Flyer distribution (on foot, direct mail, other)
Hand towel drying at car washes (owner offers free hand towel drying, you work on tips -- extra charge for hand wax)
Tour guide
Music lessons
Commission sales (opportunities are endless -- think about products that are already selling well, ie mobile homes, apartment rentals, some advertising, precious metals, insurance, etc.)
Farm stands (they want to outlaw them, or regulate the crap out of them in Maine. But for now there are still opportunities in most areas)

How's that for starters?

Anyone reading this post -- please send me your ideas or tips for "proven" service type businesses so I can spread the world to my subscribers.

Later...........

MC

Saturday, February 20, 2010

Are There "Set It and Forget It" Type Businesses?

 Question: I’m looking for a “set it and forget it” type business. I’m a busy professional. I don’t have an abundance of time to babysit or manage a business on a day-to-day basis. Do you have any specific recommendations?
M.W. San Diego CA

 
Answer Marc Charles: 

Actually, I could recommend dozens of businesses!

But I’ll focus on one business in particular.

I’m a big fan of “set it and forget it” type businesses. I reveal many of these in The Liberty Street Letter each month, as well as in special communiqu├ęs.

It’s important to understand even “set it and forget it” type businesses need some attention. That’s why I love Internet, web-based, information and digital businesses. You can monitor these businesses 24/7 from anywhere in the world with Internet access. I monitored one of my small web-based businesses from my iPhone a few minutes ago in the pool area at the hotel where I’m staying.

What’s more, I don’t know a lot about your lifestyle, objectives, preferences, or available capital either.

Let’s say you would be content with a web-based information business. These types of businesses fit the “set it and forget it” model perfectly.

You need to go to ClickBank.

ClickBank is an online marketplace used by more than 12,000 digital product vendors and publishers. There are also more than 100,000 active affiliates.

ClickBank enables entrepreneurs like you to sell digital information products (and software) online. You can develop a product yourself or you can sell other people’s products.

There’s not enough space here to tell you everything you need to know about ClickBank to be successful.

But know this….

ClickBank is a great place to start for anyone who desires to make money online by selling digital information and products.

What’s more, you’ll learn how ClickBank handles ALL of the order fulfillment, credit card processing, charge backs, refunds and repeat sales for you!

On top of that, you’ll learn how to develop or copy a website which does all of the selling for you.

The trick to ClickBank is obtaining targeted traffic to the website landing page (which does all of the selling for you).

ClickBank offers tutorials and forums to show you how to acquire massive targeted traffic to your site. There are also information products on ClickBank to help you!

This may be an ultimate “set it and forget it” type business for you.

Does that help?

Thursday, February 18, 2010

Can You Recommend Any Gurus?

Question: Do You Work with or Recommend Any Gurus?
P.N. Mountainaire AZ


Answer Marc Charles:
I stopped hanging my hat on "gurus" many years ago.

The problem with gurus is whenever they get into trouble, lie, cheat or steal...you're always left holding the bag so to speak.

Whenever I judge someone's character....and put my trust in them, I ask two questions:
1) Would I let this person watch my kids?
2) Would I want to be in a fox hole with this person when all hell breaks loose?

A lot of so-called gurus I've worked with or have known would not pass this test.

I won't post names or businesses on this blog.

But if you drop me an email info@marccharles.com -- and tell me about your project, venture or business, I can give you some recommendations and give you some names of people who would "pass the test" in my book.

Sound fair?

Great!

MC

Monday, February 15, 2010

A Used Car Dealership -- Am I Crazy?

Question: I'm thinking about starting a used car dealership. I've researched 23 comparable used car dealerships in my state over a three year period. I've also been involved in the industry at several levels - but never as a owner principle. I'm not over extending myself with debt and inventory...in other words I'm starting really small. My question is in this economy, which I think is a depression, am I nuts?
A.V. Scottsdale AR

Answer Marc Charles:
Most of the people and entrepreneurs I meet with rarely do the research and due diligence you've done. I'm serious. Most people are in too much of a hurry to start a business, and most people bite off more then they can chew.

But, as I've mentioned in my newsletters, columns and The Liberty Street Letter, a nieghborhood used car dealership can be a very wise choice, especially in a depression.

New car dealerships are dropping like flies, downsizing, and just trying to survive until the next bull market arrives. The next bull market in new cars may be ten years down the road..or longer.

What's more, most new car dealers are expanding their used car inventory....in a big way, because that's what people want (and can afford).

A small neighborhood used car lot with an Internet division, could do extremely well. Obvioulsy if you can offer reasonably priced services like financing, repair, sound system installation, interior repair and upgrades (like carpet and seats).....you should do extremley well.

On top of that, you'll be competing with the huge auto mall superstores (with dedicated Internet divisions and wholesale auction access)....but who cares! Most of these guys will be ghost towns if the depression persists...which I think it will.

And by the way, you can run commercials just like they do on YouTube...FREE!

So...no I don't think you're crazy. In fact, please keep me posted. I put you on my list for buying a car!

MC

Sunday, February 14, 2010

Can You Really Make Money with FOREX?

Question: I'm really sick of the endless chatter about making money online with FOREX? Are the products on Clickbank and elsewhere legitmate? Can a person really make money with FOREX? 
D.L. Eagan MN

Answer Marc Charles:
The FOREX market is a $1.8 TRILLION waterfall of CASH.

I’ll show you how to make money trading the FOREX markets in a second.

But first, a little  background ...

The FOREX market demands the attention of any entrepreneur who wants to participate in the largest electronic marketplace in the world. Banks, governments, drug kingpins, ex-patriots, international corporations, sheiks, kings, and speculators all participate.

Traders of every size, shape, color, and educational background can generate enormous profits in this market.

FOREX – or “FX” – stands for Foreign Exchange. It is the largest and most liquid financial market in the world – 30 times larger than all the U.S. equity markets combined.

“Foreign exchange” is the simultaneous buying of one currency and selling of another – the Euro/U.S. Dollar (EUR/USD), for example, or the U.S. Dollar/Japanese Yen (USD/JPY).

Yes. You can make money online with FOREX, and I think it's a legitimate business opportunity.

But the "rub" as they say....is the learning curve, which although fairly simple, it's not always easy for everyone.

As for the products on Clickbank...I know there's a boatload of them. I've reviewed several of them. The only ones I would give a B+ would be Forextrino Click Here!, Forex Robot Click Here!, and FX Automny Click Here!.

Oh....and The Ultimate FX Predictor is an A. I was contracted to work on the US promotiion, so I'm biased. It's also pricey....but not everything good is cheap. Check it out here: http://www.tufxp.co.uk/

I hope that helps!

Regards,

Marc

Friday, February 12, 2010

Can a Person Really Make Money with Domain Names?

Question: I’ve heard about people making money buying and selling domain names. I know this market was hot during the dot com boom. But does it still present a viable “side income” opportunity today?

  Answer Marc Charles:

Yes. Buying and selling domain names can be a viable side business.

The domain market was extremely hot from 1999-2002, and my “domain portfolio” performed nicely during this period.

But the domain market is far from over.
Just to clarify…a domain name is the official name of a computer (host) which is connected to the Internet, like www.BlahBlahBlah.com
 
Domain names are alphabetic Internet addresses which end with a period and three or four letters like .com, .net, .biz, .edu, and .info, etc.

There are more than 80,000,000 “dot com” domains active on the Internet according to DomainTools.com.

In order to function on the Internet, a host needs an alphabetic domain name which has an associated numerical Internet Protocol (IP) address record. 

For example, the IP address for BlahBlahBlah.com could be 208.77.188.16
Every business goes through cycles or waves; buying and selling domain names is no different.

But domain names are still a vital part of doing business on the Internet. 

Therefore, the market for domain names is extremely active, which means millions of people (and companies) buy and sell domain names on a regular basis.

So, how do you make money with these things?

It’s easier than buying a book on Amazon.com!

Here are eight high-traffic domain marketplaces and auction sites on the Internet:

·        Sedo.com
·        Pool.com
·        GoDaddy.com
·        BuyDomains.com
·        Afternic.com
·        DomainAuctionsScript.com
·        BuySellWebsites.com
·        SitePointMarketplace

The objective is to buy a domain name at a relatively low cost and sell it at a higher price.

I say “relatively” lower cost because this doesn’t always mean buying domain names dirt cheap.

In some cases it might require buying a domain name for $500, and selling it for $1000 or more.

However, I purchased a domain name with the precious metal gold in it for $15 in 2001. I recently sold this domain (and a corresponding website) for $5000. This is more than a 30,000% return on my investment!

Granted, this domain name sale included website programming, image files, membership list and a database. But these elements cost me less than $1000 - so my actual return on investment was still pretty good.

Here’s an insider’s secret for buying profitable domain names.

Look to the future!

In other words, things, people and events that are popular today, may not be popular in 2 weeks, 2 months or 2 years.

When I purchased the domain name with the precious metal gold in it I suspected precious metals might be a hot commodity in the future (after a stock market crash), and I was right.

So, when you’re purchasing domain names look for topics, events, people, music and technology which should be popular down the road.

For example, most of the domain names associated with “American Idol” (the popular TV show) have already been purchased and in some cases are overvalued.

But that doesn’t mean you can’t make money on domain names with the phrase “American Idol” or something related to the show.

The idea is to look to the future when purchasing domain names.

This might mean contestant names in Season 8 of American Idol, special reunion concert tickets like the Simon and Garfunkel Tour (SimonGarfunkelReunion09 is available as of this writing), or special events like the 2010 Olympics (2010-Olympic-Tickets.com is still available as of this writing)…your domain names should be profitable.

Think of domain names like real estate.

Four years ago property in South Beach Miami FL was hot and sold at a huge premium. The same property today is selling at a huge discount.

The same is true in the “domain portfolio” business.

Companies like GoDaddy.com have millions of domain names in their portfolio. GoDaddy.com is domain name registrar – meaning they are authorized by ICANN to sell and register domain names.

GoDaddy.com also buys domain names at a low cost and sells them for a profit. GoDaddy.com also aggressively purchases domain names when expire!

You can purchase domain names at relatively low costs at these four registrars:

More Profitable Domain Ideas

You can also grab domain names with “built in” popularity. These domain names were recently offered for sale in the SitePoint Marketplace:

SantaNews.com ($1,500)
LocalSwineFlu.com ($50)
RealPokerStars.com ($100)
SecretForexTrading.com ($30)

The combinations for domain names are almost endless.

Buying and selling domain names can be a viable side business and the start up costs are minimal. 

I hope that helps!

Tuesday, February 9, 2010

Are Web-Based Businesses a Sham?


Question: I’ve heard a lot of hype regarding so-called “web-based businesses”. I’m looking for viable side income opportunities. Are people really making money with web-based businesses?                                                                                                             
 L.D. Winnipeg Manitoba

Answer Marc Charles: The answer is yes! I’ve launched, bought, sold, managed and advised dozens of “viable” web-based businesses. Many of these ventures were profitable and made money.

Granted, there’s a ton of misinformation on launching (and running) a web-based business.  

For instance, in most cases you will need a computer and Internet connection. But I recently met someone who’s making  money (selling used books) without a computer or Internet connection. This person outsources all of the computer and Internet work.

But in most cases you will need a computer, basic computer and Internet knowledge, and an Internet connection.

I have two questions for you.

Do you have the time and energy to focus on making a web-based business profitable? Or would you rather purchase a web-based business which is already successful?

There’s nothing wrong with either approach.

But entrepreneurs are on a shoestring budget may not have the capital to purchase a going business. These entrepreneurs are content building something from the ground up (which can be done easily).

Whereas other entrepreneurs prefer acquiring a ‘plug and play” web-based business; one which is already producing revenue.

There are a ton of resources for identifying legitimate web-based businesses you can start from the ground up, such as Early to Rise, my newsletter Profit Center Dispatch, The Liberty Street League https://web-purchases.com/LSL/ELSLL214/landing.html and Marc Charles Reviews http://www.marccharles.com.

The two best resources for identifying viable web-based businesses for sale are SitePoint Marketplace and Viper Business Listings.

You can also find a great selection of web-based businesses and domains for sale at GoDaddy.com and BizBuySell.

I hope that helps!
 

Is the King of Business Opportunities on Twitter?

Question: Hey Marc, I met you at an ETR conference. You were fabulous...not only in the after meetings, but as a regular guy and entrepreneur. Your talk on developing info products is still paying dividends for me! Anyway, are you on Twitter?
R.L. Phoenix AZ

Answer Marc Charles:

It's great to hear from you. I remember our meetings and discussions. My Twitter stuff:
http://twitter.com/AskMarcCharles

Later.....

MC

Sunday, February 7, 2010

Restaurant Options in a Depression


Question: We have a successful restaurant in a busy metropolitan area. However, we’ve seen a drop off in year-over-year sales. We’re nervous about the economy and have considered selling the business. But this is the only business we know. Would you sell the business and start over in a new business, in a new area, in THIS economy?                                          
A.B. Fort Collins CO

Answer Marc Charles: There are too many variables for me to comfortably recommend selling or keeping your business in this economy. You’ve seen a drop off in sales. I think the drop off will continue.

If we enter a full fledged depression the businesses with massive overhead, debt loads, and declining sales will be the first to go. I’m sorry to say but restaurants are always the hardest hit.

However, I took my kids and two of their friends to dinner last night at a fun family restaurant in Rockport Maine. The restaurant was packed to the gills! People were laughing (maybe quietly crying inside) and kids were playing video games in a small arcade, and running all over the place.

It seems restaurants with a passion for great service and reasonable prices always find a way to make money in difficult times.

Six restaurants in the same geographic area have gone out of business the past 18 months.

I know you said your restaurant was successful but is it profitable? Is the overhead manageable? Do you own the property outright? If not, you may be headed for trouble.

The bad news is there are probably hundreds of restaurants (maybe a thousand) for sale in your city.  Will you be able to sell your restaurant? That is the question.

The good news is you can always start a business on the side and get it going until your restaurant is sold.

Another thing to consider is starting a restaurant in an area with fewer encumbrances and expenses….like small town America, the exurbs or even outside of the US.

 

Friday, February 5, 2010

How Easy Is It To Make Money with Google AdSense?


Question: I’ve read making money with Google’s AdSense is pretty easy, and especially for the technically illiterate. What sayeth thou?                             
A.F. Telluride CO

Answer Marc Charles: It’s simple to set up Google AdSense on a website, blog or Internet directory. 

Making money with AdSense is pretty easy too.

But “easy” is a relative term. Let me explain…

For my 85 year-old father-in-law who has limited Internet, computer and “tech” experience “easy” is not so.

However, when I showed my father-in-law websites running Google AdSense he “got it” immediately, so it’s not difficult to understand.

On the other hand, my 14-year old daughter has a ton of Internet, computer and programming savvy so “in her case “easy” is an understatement! My daughter picked up the “concept” of Google AdSense in no time flat, and started making money within a week or two.

Google AdSense is a program whereby a website owner or publisher can run Google advertising on his or her site and get paid for doing it.

Google splits ad revenue with AdSense publishers.

The trick to Google AdSense is driving targeted traffic to a website, publication or blog. By “targeted” traffic I mean visitors who are “most likely” to be interested in the content on your website and in the advertising running on your site.

There are hundreds of ways to drive traffic to a website – some of them are free and other ways cost money.

My favorite ways to drive traffic to websites running Google AdSense are as follows:

1)    Targeted email newsletter advertising. Preferably deep discount or remnant ad campaigns.
2)    Keyword advertising on discount ad networks like Advertising.com, 7Search.com, ExactSeek.com, Kanoodld.com and AdBrite. You can purchase keyword advertising “clicks” on these networks for as low as 5 cents. You can “resell” this traffic for 40-50 cents per click with Google AdSense
3)    Build your own search engine and redirect traffic to websites running Google AdSense. A search engine or directory is simply a website, with a database and a searching mechanism. They are easy for most programmers to build and have numerous benefits.

The best part of Google Adsense is the “auto pilot” feature. If you have a website running Google AdSense, and if you have targeted traffic coming to the site, the AdSense runs 24-hours a day, 7 days a week without maintaining or babysitting it – thus the “auto pilot” feature.
 

Is My Business in a Rising Trend?


Question:  I own a fuel oil and natural gas delivery business. I’m wondering if this is the best business to be involved in given the current economic downturn. Do you think my business taps into a “rising trend”?                                                                                                                
T.B. Fargo North Dakota

Answer Marc Charles: Good question. My short answer is yes. You’re in an excellent niche business which should fare just fine in the current economy.

But, I need to ask, is your business profitable or is it losing money?

It’s important to remember, although some people are experiencing difficulties and some businesses have been affected more than others, the old fable in Acres of Diamonds still holds true.

The lesson of this fable is there are usually acres of diamonds in our own backyard.

In my experience, the best money making opportunities are usually in plain view.

I have to admit its fun traveling the world in search of opportunities. But even then opportunities are in plain view.

No matter how bad things get people will always need fuel.

The question to ask yourself is, “Will your customers prefer doing business with competitors because of better pricing, better service or better terms”?

Look for ways to offer better service and possibly a break on pricing, or financing.

Most fuel distribution companies offer boiler services. But you could go a step further and offer annual “Energy Audit”. An “Energy Audit” would be an unbiased evaluation of a homeowner and business owners building. This audit would include specific recommendations for reducing energy consumption.

Be on the look out for in-kind relationships with companies which offer the services you need, like snowplowing, accounting, direct marketing or dealing with the government.

Granted, most of the barter systems I’ve seen fall short on many levels.

However, in a depression, as in good times, legitimate in-kind relationships are crucial.

Here’s something else I’ll throw into the mix…

The companies saddled with debt, unpaid receivables and huge inventories of outdated products tend to be the first to go under when the economy turns south. We should prepare for this BEFORE it occurs. If you have problems in these areas make changes today.

And don’t forget….direct marketing (done right) usually separates the men from the boys when it comes to increasing sales.

I hope that helps.