Search This Blog

Monday, February 28, 2011

A Simple Formula For Getting Rich


Reprinted by Permission


Note to readers: I’m reposting this article by my friend Michael Masterson at Early to Rise. It’s really good….and yes, he talked about me….but it’s still good!

Be sure to grab a copy of Michael's new book: 

The Pledge: Your Master Plan for an Abundant Life (Agora Series)


A Simple Formula For Getting Rich
By Michael Masterson

Would you like a simple formula for getting rich?

Here it is: Find a popular product that is selling for $100. Find a supplier in China to knock it off and sell it to you for $10. Then sell it to the market for $50, half the price it’s selling for everywhere else.

This is the formula the Walton family used to make Walmart the biggest retailer in the world. It is also the formula that Target, Macy’s, Rooms to Go, Amazon, Best Buy, and just about every other major retailer in the U.S. has used. And they account for just a fraction of the hundreds of billions of dollars’ worth of Chinese products imported into the U.S. every year.

Nobody can resist a bargain. And that’s how these retailers stay in business. By selling in-demand goods at discount prices.

The key words here are “in demand.” You aren’t going to get rich selling left-handed monkey wrenches at half price.

In a past Journal, I told you about my friend Bernard. He emigrated here from England about 20 years ago and started a business selling furniture shortly after he arrived. He made a pretty good living for himself because he was a great salesman. But when he started selling Chinese knock-offs of popular furniture lines, he became rich.

I have another friend who made over a million dollars in less than a year by simply brokering wholesale health products that he purchased in China. Again, he focused on in-demand items. Once he found a Chinese manufacturer that could provide the quality he needed, he simply phoned up the CEOs of health supplement businesses. When he told them how much money he could save them, they fell in line, one after the other.

And a college dropout named Valerie Johnson made a fortune selling footie pajamas for adults that she had made in China. (More about Valerie in a minute…)

All of these people experienced the immense wealth-building advantage of being able to sell a popular product for a fraction of the market price. When you can do that, you don’t have to:
  • Have a name in the industry
  • Have connections
  • Know anything about marketing
  • Have big bucks to fund the business while it grows
I have talked about this strategy for more than a decade. But, until now, I have never been able to recommend a specific way to do it.

In the old days, you had to have big bucks and/or big balls to get into the Chinese knock-off business. That was because you had to travel to China, meet with dozens of suppliers, select one you thought you could trust, and then pay him a large sum of money to meet his minimum manufacturing requirements.

But all that has changed, thanks to the Internet.

In fact, there is one website — a mega-site — that can give you pretty much anything you could possibly want. You can stipulate what you want and how much of it you want, and it will give it to you at the price you need… almost instantly.

This site — and some support services that are tied into it — make it possible for you to set up your own international trading business, acting as a highly commissioned broker, hooking up U.S. buyers with Chinese manufacturers.

This is a very exciting situation. For the first time in history, individuals can compete on a nearly equal footing with the world’s largest retailers. They can buy modest quantities of popular products extremely cheaply… and have them delivered to the States in a matter of days.
America is a country of entrepreneurs. 

There are tens of millions of us who are constantly looking for ways to start new businesses to increase our wealth. Most people have no idea how easy it is to start up a Chinese import trading company… but word is getting out. I don’t think I’m sticking my neck out by predicting that this trend will accelerate very quickly in the next few months. So the time to get in is right now.

This business is going to be hot because it offers entrepreneurs everything they dream about. 

They can:
  • Start their business at home.
  • Work part-time or on weekends.
  • Earn a second income independently… privately.
  • And stand a good chance of becoming rich!
If that sounds good to you, read on. I’m just getting started.

China is, by far, the world’s leader in manufacturing and exporting cheap goods. It exported $1.2 trillion worth last year. And, despite the worldwide recession, it is expected to increase that number next year.

The Chinese government is committed to exporting. If their exports shrank significantly, that could seriously jeopardize the country’s economic growth. Given the hold China already has on the U.S. economy, it is absurd to think that the Chinese will lighten up on their exports, no matter what kind of noise comes out of Washington. In fact, they are cranking up their exporting machinery. And one of the ways they are expanding most quickly is by selling directly to small U.S.-based entrepreneurs. The website I mentioned above is a big part of that.

I believe in investing in trends. I have made all my big profits by doing so. I know that it works. I like catching a trend after it has already begun — but you don’t want to wait too long either, or you will end up getting in when it’s too late. (Most people who got into real estate four or five years ago know just what I mean.)

The trend toward inexpensive knock-offs is not brand-new. But it is far from over, that’s for sure. The certainty (yes, I am sure of it) that the Great Recession will continue to haunt us for many years ensures the growth of low-price buying in the United States.

The Great Recession is decimating high-priced retailers. Upper-middle-class consumers are feeling pinched economically and are, therefore, cutting back on their discretionary spending.
But here’s something to keep in mind about recessions: When consumers are feeling bad about their financial situation, they don’t buy fewer products (as they should). They buy more.

Buying lifts their spirits. It makes them feel better about themselves. So they buy more, but they shop for bargains. And that fact of life is great for all the entrepreneurial businesses that are selling knock-offs from China.

What I’m saying is that we are going through a multibillion-dollar shift in the buying habits of the American public. The working class will continue to buy from Walmart. But more and more middle-class people will look to other sources of super-cheap goods — and not just Target and Marshalls.

As I said, that means big opportunities for entrepreneurs who want to follow in the footsteps of the Walton family and get into this wonderful business of selling Chinese goods to the still-huge U.S. market.

Let’s Get Back to Valerie…

When Valerie got her idea about selling footie pajamas for adults, she had absolutely no experience in the textile business. What’s more, she knew nothing about product sourcing or how to run an online business.

And yet, using very little money, she was able to create a home-based business that is bringing in seven figures. These days, she works according to her own schedule and answers to nobody but herself. She is very happy with her new life. She attributes her success to finding a source that allowed her to import the pajamas exactly the way she wanted them, for pennies on the dollar, from China.

You’ll read all about it in the attached report. You’ll also read about others like Valerie. For example:
  • A woman, pregnant with her first child, started her business back in 2004. She needed some maternity wear but didn’t like what was available at the stores she shopped in. The clothes were bland and unflattering. She was looking for something a little sexier and more exciting, but the only places that carried what she wanted were very expensive boutiques. She figured there were a lot of other pregnant women in the same boat. So she found a source in China for the kind of maternity clothes she wanted to wear, and went into business. Today, her company brings in over $1 million a year.
  • A married couple started importing flags from China in 2001 and reselling them on the Internet. Their business took off right away, so they expanded their offerings. Now they are generating revenues of more than $25 million a year.
The Opportunity Is Yours for the Taking

You can start your own business by importing Chinese goods and selling them directly or on the Internet. You can get exactly what you want, and have it made so cheaply you probably won’t believe it at first.

You can have the manufacturer deliver it wherever you want, too — to a distribution warehouse, to a wholesaler, or to the end customer. It’s as easy as pushing a few buttons. That’s how sophisticated this “underground” market has become.

What you need first, though, is a little bit of education. You need to know how to:
1.      
1.     Research all the really hot markets.
2.     Locate reliable manufacturers.
3.     Create purchase agreements that ensure your full satisfaction.
4.     Find buyers eager to take your products at big discounts.

Because the people at ETR see the Chinese import business as a big and growing trend, they have created an information product that will get you started right away. I was invited to consult on it, and I gave them these suggestions:
  • It must be easy to understand.
  • It should be written for the layman who has no experience importing or selling products.
  • It must cover all the bases. (I gave them the four-point list above. I told them to make sure all of that information was included.)
  • It must explain how this business can be started on a kitchen table.
  • It must explain how it can be done part-time or on weekends.
  • And, finally, I advised them to price it as inexpensively as they could.
The program does everything I had asked for and more. Not only that… the ETR team persuaded ETR’s own Marc Charles to develop it. Knowing that Marc is involved makes me feel even better. Marc is indefatigable when it comes to developing and improving his products. And he knows a lot about the Chinese import business, for he has done it himself.
Now Is the Time to Take Action!

Here are eight reasons why you should get into this market right now:

1. You can start out small. Many an empire has been started from a spare bedroom or the kitchen table. You don’t need a huge office or a lot of overhead.

2. You will be your own boss. No more stupid memos and dress codes and meetings! You have the chance to do everything the way YOU want to.

3. You can make your own hours. You can work two hours in the morning and go golfing the rest of the day if you feel like it.

4. You have unlimited profit potential. You can make as much money as you can spend. Want to make an extra $2,000 a month? Okay. Need to make an extra $10,000? No problem. It’s all up to you. The sky’s the limit.

5. You don’t need any employees. (If you’ve ever had employees, you know what I’m talking about.)

6. You can run your empire from anywhere. All you need is a computer and an Internet connection. Go ahead, work from the side of the pool. It’ll be our little secret.

7. You can learn everything you need to know in under an hour.

And I left the best for last…

8. You don’t need to have a ton of money to get started. You’ll actually learn methods that can get you started for less than a couple of hundred dollars.

Chinese import is a multibillion-dollar industry. And the fastest growing portion of it, I predict, will be small-time entrepreneurs taking advantage of the new Internet technology.

If you purchase Marc’s China Wholesale Trader program, you will be given access to a website that we recommend you start with. Here are some of the reasons why:
  • It facilitates more than $6 billion in transactions every year…
  • Boasts more than 47 million registered users…
  • Hosts more than 6 million virtual storefronts…
  • And reaches buyers and sellers in more than 240 countries and territories.
Despite all this activity, it is entirely under the radar and unknown to most people.
This website not only connects you with sources to have your products made, it helps you locate buyers (including some amazingly big and qualified buyers). When you see it, you’ll be very impressed.

The attached report will introduce you to some other ways to sell products on the Internet. The easiest (and least expensive) way is on sites like eBay, Amazon, and Yahoo Small Business. But there are many others you will want to know about. Marc is currently researching them and will provide the buyers of his program with new contacts on a continuing basis.

When you sell through these high-traffic online marketplaces, you don’t even need a website. Just list your products on one or all of them. You can customize your listings so they stand out, too. And, for a small fee, you can actually feature your products on their front pages.

You’ve no doubt heard of Marc Charles, the man behind the China Wholesale Trader program. He is often referred to as “The King of Business Opportunities.” He has launched more than 40 successful businesses over the past 28 years (and advised on many more). One business (an ad rep agency) produced more than $6 million in sales in 36 months with a start-up budget of less than $2,000.

Marc began his Internet adventure in 1993 by reviewing more than 8,500 websites for Yahoo! Unplugged. His reviews (which became a bestselling book, online resource, and interactive CD) were featured in Wired, Bloomberg Personal, Internet World, Internet Edge, Web Digest, and Business 2.0. In 1999, he developed the first e-mail newsletter advertorial. (And e-mail advertorials continue to be one of the most powerful marketing tools on the Internet.)
Marc’s passion is identifying bricks-and-mortar and Internet business opportunities for start-up entrepreneurs.

With the China Wholesale Trader program, his goal is to help aspiring entrepreneurs get in on this lucrative market quickly and easily. In the program, you will learn:
  • How to know if an exporter is legit. You’ll find out what a “trust pass” is and why it can make all the difference in the world to your success. Get this wrong and you’re guaranteed to fail.
  • How to make sure you know the lingo. Other importers will think you’re an old pro, which means they won’t try to take advantage of you. You can learn all the necessary terms in under 2.5 hours.
  • How to correctly handle the exchange of money, whether it’s dollars, yen, or euros. (Don’t worry. You’ll get it right.)
  • How and when to make a whopping 40% to 100% commission on certain key items.
  • Where and how to spot the hottest products. For example, which would you rather sell: heavy machinery or simple herbs and spices? One is much more profitable than the other, but the answer may surprise you. (Here’s a hint: It’s not heavy machinery!)
  • How to get started with little or none of your own money.
  • How to make money without touching a single product. (I really like this one.)
  • How to pay for the program with the money you’ll save on your own personal items — items your neighbors definitely won’t have, but will kill to get.
And that’s just the beginning.
You will also learn:
  • How to order in small quantities. Sometimes you can even order one item at a time so you won’t have to keep your money tied up in inventory.
  • Where to find a thousand companies looking to do business with you right now. This very minute. (The competition is fierce.)
  • How to get name-brand items at prices so low we can’t even show them to you or the manufacturer would sue us.
  • How to travel almost for free, to all sorts of exotic locations around the world. Manufacturers will basically pay for you to visit them.
  • How to get your own next big idea manufactured for peanuts.
If it feels like I am trying to sell you on Marc’s program, it is not an accident. I believe this is a bigger market than information publishing, and information publishing is the business that has, until now, been my number one recommendation to ETR readers. I like this better because you don’t have to know anything about writing do get in on it.

Plus, the market for manufactured products is even bigger than the market for information. All you have to do is find out what consumers are already buying, and then sell them the same things at a fraction of the cost.

If, for any reason, this program doesn’t get you going and raking in the money, you can get a full refund at any time. So there is really no reason not to take a look at the offer. Just remember… this is the beginning of a big trend. The sooner you get in on it, the better you will do.


Tuesday, February 22, 2011

Unusal Web-Based Business with NO Start-up Cash Required


Reprinted by permission
 

Unusual Web-Based Business Service with NO Start-up Cash Required
Can You Say $100,000 Per Year?

9:02 AM

Dear Entrepreneur:

I've been involved in a unique business for more than 20 years. 

Hardly anyone knows this business even exists.

I’ve made more than $100,000 per year more than a dozen times.

You’re probably thinking “That’s great Marc. But what about in this stupid economy”?

It’s real simple….

There has never been better time make money by providing this service.
Granted, you probably won’t make $100k right out of the gate. But you could make a nice income offering this service.

This week I’ll focus on the Internet side of this business. You’re not limited to the Internet or eBusinesses…but that’s my focus this week.

I’m referring to is business development.

Now get this……

If you can spot opportunities, work with people, write proposals, close deals or generate “buzz” and traffic to a website….you’re in!

If you think that's great, then you'll love this ... 

Unlike most entrepreneurs, I dislike traveling these days.

I’ve made enough money and slashed my expenses so I can usually bypass hotels, restaurant food, airport delays, and other fiascos. 

In fact, working on the Internet enables me to live where I want and do business on my terms…..without the headaches of being “on the road”.
I’ll leave “business traveling” for someone else. 

If you enjoy traveling, then even more opportunities will be available to you in this business.

Okay….here’s the deal.

I'm not talking about business development the way most MBAs approach it.
Most of the MBAs I've met, hired, retained or worked with couldn't sell themselves out of a wet paper bag!

I’m serious.

If you have an MBA that’s wonderful…but my advice would be to start or run a profitable business before investing in an MBA education. However, that’s another story for another time.

Being able to sell a vision, a concept, or an idea are prerequisites to successful business development. 

What the Heck is Business Development?

Business development is the process of finding legitimate partnership opportunities, and developing agreements which enable two or more parties to make money or profit. It's that simple.

I'll show you how to find people who desperately need business development right now. 

On top of that, I’m also going to show you how to develop proposals and agreements which anyone can understand and, thereby, profit from.
I recently introduced two entrepreneurs who went on to build a multimillion-dollar business together. 

The relationship also gave me an opportunity to consult on other projects (including a new casino).

“Can I Make Money Doing This”?

Business development has many facets and angles to it. 

But here's my definition:
Business development is the process whereby you identify and develop relationships which would likely enhance the profitability of two or more companies.

A business development specialist identifies companies and opportunities and then develops proposals which clearly describe how both companies would profit by joining forces or by working together on a project. 

The most successful business development specialists typically develop proposals so all of the parties involved are satisfied with the objectives, terms, and conditions of the agreement.

Look…..I know this sounds hard to do or “sticky” as some of clients would say.
But in reality…the most successful business development specialists I know do what comes naturally to them. 

In other words, it would be difficult to jump into million dollar real estate development deal if you've never been involved in real estate. 

But, if you have specialized knowledge of Web development, e-commerce, direct marketing, sales, programming or thousands of other fields - chances are you would be good at business development in those areas.

Here's a true story....

Recently, one of my clients developed an Internet search engine. He asked me to help "monetize" their database. 

"Monetize" is a popular business development term which simply means to find additional ways to make money with an existing product, brand, tool, or application.

In the course of developing ways to monetize my client's search engine database, I discovered an opportunity they could exploit. 

In order to make this opportunity work my client’s company would have to partner with several large Internet traffic sites. 

And so I focused on identifying and securing partnerships in this area for my client’s company.

The project was very successful. 

The agreement I developed was easy to understand and implement. 

More important, the partnership was beneficial to all parties ... and everyone made money! 

By the way, the agreement is still active as of this writing.

It took a business development guru (yours truly) to identify and help the companies involved capitalize on new opportunities and revenue streams.

How to Learn This Crazy Service

One of the best ways to learn the skills necessary for a business development is to mentor someone who's already doing it.

If that's not a realistic option for you, visit the top job sites (like Monster.com, HotJobs, CareerBuilder, and CraigsList) and read the descriptions and qualifications for business development specialists or managers.
That will give you an idea of what's involved.

Where to Find Business Development Clients

Checking out the major job sites is also a one way to learn about freelance business development opportunities.

But rather than apply for one of the 9-to-5 jobs listed, you could contact the company with a proposal to work as an independent contractor or freelance business development specialist. I’ve secured dozens of projects with this strategy over the years.

Granted, most companies want a warm body in a cubicle or an office. 

So the freelance approach is not going to work every time. 

On top of that, most of SVPs I’ve met or worked with want people to serve “under” them. These “corporate” types are never thrilled with freelance Lone Rangers.

But don't let that stop you!

You'll be amazed at how receptive companies will be to the idea of hiring a freelance business development guru. 

If you contact enough "A Prospects" (companies already working or retaining freelance business development people), you will secure projects.

You can also post your availability on the major jobs sites and search engines too (with links to your business development bio). 

For example, on CraigsList.org recently there were 216 postings for business development help in San Francisco alone - and many of these were freelance opportunities!

A good way to keep abreast of companies that need business development help is to subscribe to news briefs like Google NewsAlert and Yahoo! News Alert

You can customize the news alerts anyway you want. One criteria could be the phrase “ business development” or “expands business development”. Every time this phrase appears in a news story or press release you’ll receive it by email, SMS or RSS.

I’ve used Google NewsAlert (and several other services) as a prospecting tool for years. 

I also use direct marketing and FedEx to prospect for business development clients. 

For example, I sent an easy-to-read introductory letter via FedEx to the founder of a technology firm. I presented examples and stories of business development in action. The CEO immediately sent me an e-mail. We talked, and I secured a lucrative contract with his company. My business development assignment was to improve the company’s direct marketing efforts and sales letters!

You'll never have a shortage of “A Prospects” when it comes to business development clients.

A Little-Known Key to Powerful Proposals 

Back in the 70’s I sold new Buicks at a swanky dealership in Minneapolis.
When I started selling cars I was a young, cocky entrepreneur. I thought selling cars would be easy. 

But I soon realized selling cars is hard work. 

I remained at the bottom of the sales team until I stole a technique used by a million dollar car salesman. 

I learned his "trick" by eavesdropping on his conversations with customers.
I watched in amazement as he closed deal after deal after deal. One month he sold more than 100 cars with a retail value of more than 1 million dollars.

Anyway, the “big man on campus” always asked his customers the same question:

"What can I do to make this work for you today?"


You've probably heard this line a thousand times. 

But believe me….this question works wonders. 

By understanding what you can do to make a deal work for the other person, you'll know HOW create a POWERFUL business development proposal.
When you write a business development proposal just remember to include the exact words the other party used to describe what it would take to "make it work" for him or her.

Listen….this isn’t a fancy sales trick to get somebody to do something they don't want to do. 

Most entrepreneurs and business development specialists could care less about what the other person wants. In my experience, most people are concerned about what they want!

But if business development proposals are written from the other person's perspective then deals RARELY come undone. 

Proposals developed with the other person's hopes and desires in mind always stand the test of time.

Your Humble Host,

Marc Charles

(Ed Note:  Marc Charles is referred to as "The King of Business Opportunities" ....and for good reason. He should be known as "The King of Legitimate Business Opportunities"...because he's launched, bought, sold reviewed and advised on hundreds of businesses and money making opportunities. He understands legitimate opportunities. Marc has agreed supply League of Power members with crucial updates regarding legitimate business and money making opportunities.)

***Action Strategy***
There are several ways to get started in this field.
Obviously, if you're new to the concept of business development, you'll need to bring yourself up to speed quickly. You can do this by scouring the top job sites and reading about what companies are looking for with regard to business development.
One of the best ways to learn business development is to hang out with people who are already doing it. If that means taking on a part-time job or freelance assignment ... do it!
Once you know enough to be able to produce profitable results for your clients, you can start to going after higher paying assignments and projects.
The approach I’ve used hundreds of times when approaching prospective clients or business owners is a simple sales letter.
You’re not trying to secure a contract or project with your first sales letter or introduction. The objective of your first letter is to have the prospect take one small action, such as e-mailing or calling you, or to visit a website to get more information about what you can do for them.
When it comes to posting your bio on a website I've found a convincing overview of your background written in everyday language, will always produce a greater response than a conventional resume.
And remember….You can launch websites for almost nothing these days ... and host them for free.
Another way to get business-development clients is to post your availability on places like CraigsList.org (which has hundreds of cities for you to choose from).
Your bio or website should be submitted to all of the major search engines. You can do this yourself or contract someone like Bruce Clay or Whiz Kid SEO.
What’s more, you'll be amazed how many qualified business-development clients and prospects you can attract to your site with a few good keyword ads on Google, Yahoo!, or Bing.
Yet another great way to find qualified business-development clients is by subscribing to a news clipping service like BusinessWire, Google NewsAlert, or Yahoo! News.
Simply submit words and phrases relating to "business development" or “business development expansion” and they'll send you every press release and news story with that phrase in it.
By reading press releases you’ll learn about what companies are doing, and then shoot them an e-mail if there's a fit.
*******Valuable Resources ********
Freelance Central
HotJobs Freelance BizOp
Guru.com
CraigsList.org (200+ cities, hundreds of opportunities)
Get A Freelancer
DirectResponseJobs
eLance
Media Bistro
Monster
VP Business Development Jobs
Reach Hundreds of Qualified Prospects by Posting Your Availability Website Bio or Sales Letter on any of these Sites and Search Engines:
Google AdWords
Bing
Yahoo! Small Business
ExactSeek
Monster
CareerBuilder
SmartHunt
PaidContent
ClientAttraction.com
Snail Mail Marketing Approach
Snail mail is NOT dead!
In fact, as millions of people flock to Google, Facebook, Twitter and PPC advertising….postal mail and FedEx has been virtually ignored. But as your prospective clients receive thousands of emails, promos and pitches online and via email each week….very few of them are receiving personalized FedEx letters!
By sending personalized introductions and sales letters via regular post or FedEx you will stand out from the crowd…that’s the objective!
Therefore, you could reach and close a boatload of sales in 2011 by using viable mailing lists of “A Prospect” clients.
You can research hundreds of viable mailing list companies and brokers on the Direct Marketing Association website here.
Recommended Reading:
"Get Clients Now" by C.J. Hayden
"Selling Your Services" by Robert Bly
“Book Yourself Solid” by Michael Port


Sunday, February 20, 2011

China Wholesale Trader by Marc Charles

My latest (hottest) info product in all its glory.......

A legitmate business opportunity and money making formula without huge start up cash requirements.......





Have fun and play nice!


Your humble host.......


Marc Charles

Saturday, February 19, 2011

Being An Entrepreneur.....................

I think Michael Masterson hit the mark on being an entrepreneur in a recent article.

I've reprinted it below (courtesy of Early to Rise)

Marc Charles

_______________________


"Entrepreneurship is neither a science nor an art. It is a practice."
Peter Drucker 


So You Wanna Be an Entrepreneur... 
by Michael Masterson

It's hard to say which comes first - the desire to be an entrepreneur or the germ of an idea for a business. Obviously, you need both.

The idea can come from anywhere. It can be the result of an experience you have in the marketplace or it can be something to do with a hobby or passion you have. And the two sides of the initial decision of what business to get into are this:

One, you need to know a lot about the subject. When I say a lot, I mean you should be able to write a book about it. If not at first, then at least before you start investing in it.

Second - and this is more important than you might think - you need to be interested in it. You are going to be married to this idea. You are going to be sacrificing time and investing resources into it. If you are not keenly and seriously absorbed by the whole concept, you won't last long. You won't be able to maintain the momentum it takes to go through the process of developing and running a multi-million dollar business.

But if the idea excites you and you want to know everything you can about it, you'll be ready to dig in and put your time and money into it. You'll enjoy the process and even more, you'll be gratified when your business serves a need in the market. 

Now let me stop right here and do a little balloon-bursting.

If you've been scanning the entrepreneur news for long, you may be on the "do what you love" bandwagon. I'm all for having a passion for what you do, but only to a point. "Doing what you love" can be a big mistake unless you keep it within certain guidelines. 

So let me give you some caveats on deciding what your business will be... 

Separating Your Passion From the Reality of the Marketplace

I can't stress this point enough. You might think the world will beat a path to your door to buy your product, especially since there's nothing else like it in the market place. You've got visions of selling your wares like hotcakes and watching the money roll in. No one's ever heard of your breakthrough idea, but once they do, they'll have to have it, right?

Not necessarily. If you're filling a true gap in the market, it might be true. But if your product doesn't already exist, there might be a good reason for it... no demand.

You must realize that if there is no demand for your product, you won't have any buyers. Entrepreneurship is not a case of "build it and they will come." No matter how passionate you are about your idea, the market decides what sells, not you.
A prime example is the online grocery business that was called Webvan. Owner 

Louis Borders was already a successful entrepreneur (Borders Books), so he was able to attract a lot of startup capital. And because he was so sure of his idea, he spent it all on a distribution system of warehouses and delivery trucks. Then reality set in.

People weren't as quick to change their shopping habits as Borders thought they would be. He had banked on the idea that people would choose convenience over time spent going to the grocery. And that they would not only pay full retail price, but a delivery charge.

That wasn't the case. If Borders had tested the market he would have found that people like to shop for specials when they go grocery shopping. They also go to the market several times a week because they often don't plan meals in advance. 

One big delivery order at premium price doesn't meet the customer need. And then there's the fact that most people like to squeeze their own tomatoes before buying them...

Borders built it, but they didn't come. And with the profit margin in the grocery business being razor thin (he didn't have the power of volume buying on his side), the business tanked. When it closed, 2,000 people lost their jobs.

As you can imagine, Borders has had a hard time living down this spectacular failure. It's easy to say in hindsight that he should have known better. But if you're ever going to learn from someone else's mistakes, this is a good one. It really drives home the point that you need to build your business slowly to minimize risk. 

You need to determine exactly what works - and what doesn't - before you blow all your capital. You need to make sure there's a place in the market for your passion - not just in your own mind.

The Conceit of Outside Knowledge

One of the most common mistakes made when choosing a business venture is thinking you know things you don't.

For instance, you might enjoy dining out. You eat in restaurants several times a week. In fact, you've dined in some of the finest eateries in the world on your travels. It only seems natural that your passion for great dining experiences and all the time you've spent in restaurants would lead to opening a restaurant of your own...

The problem with this thinking is that you are going on "outside knowledge." Your experience, vast though it may be, has been as a customer, not a business manager or owner. Your experience feels deep and certain. But it isn't. It's specious. And rather conceited.

I am not immune to this mistake myself. I once partnered in a restaurant because I had the hubris to think that my own dining history qualified me to run one. And a colleague, George, an architectural designer, almost helped me make it worse.
Like me, George thought he knew the restaurant business because he had spent many years frequenting fine dining establishments. 

When I gave George a tour of my place, he suggested doubling the size of the kitchen. My partners and I were keen on the idea because we also thought the kitchen was too small.

Fortunately, I got a couple expert opinions. I hired two friends who had been running restaurants for years to do an analysis. Imagine my shock when their report showed that the present kitchen was fully capable of handling three times the traffic we expected to have!

As proof, the report included a diagram of how to better organize the kitchen space. The map showed where every sink, stove, storage unit and cooking pan should go. It boggled my mind because it was so counterintuitive to me. 

My own ideas were based on kitchens I knew - household kitchens. But that's not how an industrial kitchen works. A restaurant kitchen equipped to produce 200 meals in three hours is a very different thing. It's not a family space, it's an assembly line. And it needs to be set up like one.

That's a classic example of the conceit of outside knowledge, which is why I am no longer in the restaurant business. Just think of how many people have jumped into business simply because they think they understand something they do not.

Typical businesses that fail due to this mistake include:
  • Restaurants
  • Travel agencies
  • Vacation tour operations
  • Bed and breakfast enterprises
  • Art galleries
  • Gift shops
  • Antique stores
  • Book stores
  • Coffee shops
  • Sports-related businesses
If you're tempted to start a business in a field you have never worked in, be aware that much of what you do in the beginning will likely be wrong. Ask yourself if you have the resources - human, capital and emotional - to push the business forward after you suffer from your mistakes.

There's no better foundation than building on what you know. You might be drawn to the rush of something new and exciting, but your chances of success decrease with every step you take away from what you're familiar with.
So if you want to be an entrepreneur, I say go for it. But do your homework and build on what you know. 

[Ed. Note: This essay is an excerpt from Michael MastersonĂ¢€™s new book in progress, The Chicken's Guide to Entrepreneurship: How to Create a Cash Rich Home Business Without Quitting Your Job.
It will be released later this year. Keep an eye out for more exclusive excerpts. And let Michael know what you thought about this piece by sending a message to AskMichael@ETRFeedback.com.]


 
[Ed. Note: Michael Masterson welcomes your questions and comments. Send him a message at AskMichael@ETRFeedback.com.]