Tuesday, August 28, 2012

A Fairly Low-Risk, Fairly Fast Path to Wealth

This is the fourth in a series of five posts, each of which distills one of the presentations I made at the Commonwealth Club this month.

Of course, there is no guaranteed path to wealth, slow or fast, but my vote for the most likely approach to fairly quick wealth is to clone an ultra-simple business:

1. Pick one of the simplest businesses. There's less to go wrong and less start-up money needed so you can afford setbacks or even total failure. Examples:
  • College financial aid counselor. They help families complete the forms so as to maximize aid--like a tax accountant but for college financial aid.
  • Career coach in a niche: unhappy physicians or lawyers, people with Asperger's, etc.
  • Relationship ad writer and/or photographer

  • The cost of rent can be prohibitive so, if possible, run such businesses from home, meet at a coffee shop, or at their home or office. Or rent space by the hour from a friend. There may also be rent-by-the-hour meeting rooms available in your locale. 

  • Clean out and add shelves and cabinets to basements, garages, and attics. My favorite name: Spacemaker.
  • Shoeshine stand. My favorite name: Shine On, or in California, Dianne FineShine
  • Soup sold from a cart. My favorite name: Souper!
  • Espresso cart in the financial district. My favorite name: Liquid Assets.

      Buy your major equipment used, at auction, etc. The cost saving can be enormous.
2. Visit a few successful businesses of your chosen type. It's easy to find which brick-and-mortar retailers are successful:: Just see which ones have long lines of customers. For not-retail businesses, check out the websites of businesses that get lots of excellent reviews on Yelp, Angie's List, ServiceMaster, etc. Incorporate their best features into your business.

3. If needed, hire one of those successful business owners to be your consultant in helping you start up. Agree to not compete in their geographic area.

4. Run the business yourself for a month or two. Resist the temptation to delegate. Not only will you save money, you'll learn the ins and outs of the business so you can keep improving it. 

5.  When the business is running optimally, even if it nets as little as $500 a month, clone it in another (excellent!) location. Take the time to find a wonderful person(s) to staff it. Pay the person(s) fairly, including profit sharing. At least as important, treat them with deserved respect and kindness.

6. Keep cloning the business until you're making $100,000 to $200,000 a year. That's enough to live well. Expand beyond that and the risk of quality and efficiency too greatly declines and of theft increases, not to mention the headaches of running a bigger business.

1 comment:

Anonymous said...



blogger templates | Make Money Online