Low-Risk Business to Start in the Time of Coronavirus

In just the past four weeks, 22 million people have filed for unemployment, and a good number of them are considering self-employment.

The obvious ideas including selling corona-related products like masks and sanitizers are too obvious and so the market may already be overcrowded. 

The ideas I offer in my Psychology Today article today are less-so and, because they’re service businesses, they require little money to start and run. Might you have the expertise and desire to try one of them?

Tough Problems: Self-employment fear, a scary competitor

My PsychologyToday.com article today offers the latest in the Tough Problems series. In each post, I present two composite questions that my clients face and my response to each.

 

Today, I offer suggestions to a person seeking low-risk self-employment that can bring in a profit quickly. I also address someone whose business is facing a scary new competitor. 

Senior Self-Employment

Voluntarily or not, many people 50+ are thrust into retirement but feel they still have job juice and so turn to self-employment.

My PsychologyToday.com article today offers seven simple, low-risk businesses well-suited to older people.

11 Businesses You Can Start That Have a Good Risk/Reward Profile

Many people who aren't born entrepreneurs contemplate starting a business but are daunted by the risk.

My PsychologyToday.com article today describes 11 simple businesses that I believe have a good risk/reward ratio. HERE is the link.

Video of Marty Nemko's UC Berkeley Talk, "Eight Career Truths That May Not Be So True"

I'm flattered that UC Berkeley Extension has posted both the complete video and a 3-minute highlight video of my recent talk there: Eight Career Truths That May Not Be So True. Both are below. And HERE is an augmented print transcript of the talk.

The full talk (It's an hour long.)


A 3 1/2-minute excerpt.  

Want to be Your Own Boss? Seven Self-Employment Ideas

Of course, it's not easy to be self-employed, to be your own boss.

My latest AOL article offers some of my favorite self-employment ideas that don't require you to be a born entrepreneur.

Shoestring Businesses: Low-Risk, High-Payoff Ideas

I thought you might enjoy an advance look at my next column in the Mensa publication, The Intelligencer.  

It is an adapted excerpt from my book, How to Do Life: What they didn't teach you in school.

Shoestring Businesses

No-Brainer Businesses that Can Make a Smart Person Rich

When I look back on all my clients, two things most often keep smart people from succeeding in business: the urge to innovate and the desire for status.

Don't innovate; replicate

Smart people love coming up with ideas. Alas, even Mensans' new ideas are more likely to fail than are proven ones because, for example:

• The market doesn't like it
• The market stops liking it before you've recouped your investment, let alone made enough money
• The new product or service works less well than you'd hoped
• The R&D costs of an innovation eat too much profit.

That's why guinea pigs so often die, why the leading edge so often turns out to be the bleeding edge. Deep-pocketed corporations can afford to risk innovations--they make profit even if only a fraction succeed. But last I checked, your pockets aren't that deep, so you need to maximize your chance of success on Try One. 

You're more likely to do that by replicating a proven business that costs little to start, what I call a shoestring business. That way, even if you fail, you may have money left for a second shot. It is an MBA-program-promulgated canard that you need money to make money. Below, I'll offer a half-dozen examples of proven shoestring businesses that require only a small investment.

But you protest, "When you replicate, you have lots of competitors!" That's okay. Take, for example, gourmet food trucks. There are a zillion already but here's how you could well succeed with number zillion and one: Play detective at a half-dozen that have long lines: Incorporate their best features into your truck, buy your equipment used, for less than half price, from one of the many failed food truck businesses, open up shop it in a great location, and your chances of success are far greater than if you try to come up with a winner out of thin air.

Note: In choosing a retail business, you accrue the advantage of being able to see which ones are successful and incorporate their best ideas into yours.

Status is the enemy of success

If you choose to start a high-status business, for example in high-tech, biotech, etc., you're competing with very capable people. In contrast, if you start what The Millionaire Next Door author Thomas Stanley calls a dull-normal business, your competition is more likely to have a two-digit IQ. That, of course, makes you more likely to succeed. 

Here are examples of low-cost, weak-competition businesses that also bear little risk of going out of style. Of course, you needn't do the low-level work yourself. These days, you can hire good people for $10-15 an hour.

• Diesel repair shop 
• Help singles write relationship ads. Photograph them for their profile.
• Mobile home park cleaning service
• Clean out basements and garages, then install shelves and cabinets. 
• Install and remove home-for-sale lawn signs
• Place and maintain laundry machines in apartment buildings
• Own well-located carts selling food, flowers, scarves, knockoff- designer purses, French soap, sandwiches, or coffee.

Let's flesh out the latter. Let's say I wanted to start a business selling soup from a cart emblazoned with a catchy name like Souper! I'd take the time to find a great location: next to a train station, stadium, big-box store, movie theater, office high-rise, or other high foot-traffic area. Or even better, I'd make it mobile, for example, park it in front of a high school or college at lunchtime, move it next to a movie theatre for the evening, and near a stadium on Game Days. A cart business requires minimal rent, offers high profit margin, is a simple business, and isn’t a fad--soup, nor soap, nor flowers, nor coffee, are going out of style. Worried about its lack of status? You can tell your status-impressed friends that you're the president and CEO of the California Cappuccino Corporation, with branches throughout the state.

The secret to wealth: cloning

You may be thinking, "But I can't make enough money from such a simple business." You certainly could. Key is to clone it. For example, the simplest business I can think of is a shoeshine stand. Of course, I'd locate the stand on a high-foot-traffic street where people wear lots of leather shoes, for example, San Francisco's financial district. The stand would have prominent signage with a catchy name like Dianne FineShine. Once I learned the art and business of shoeshining, I'd set up a trusted friend with a clone of that shoeshine stand, asking for a small percentage of sales. I'd keep cloning Dianne until I was making enough money. 

Low-Risk, High-Potential Businesses You Can Start

Here's another adaptation from my new book, How to Do Life: What they didn't teach you in school.

This is an excerpt from the section on starting a business.

Some of you might prefer watching me paraphrase the section while others would just rather read the text. If you're the latter, just scroll down and you'll see the transcript.


Here's the transcript:


Consider running a business that doesn't require the cost of a storefront, for example: Help people write their relationship ads mobile auto repair or detailing, write e-books on hot topics found on google.com/trends, or do niche coaching--for example, dating, money, menopause, end-of-life..

I especially like cart and truck businesses: the costs are low and, with some effort, you can get a great location. Why not locate a cart or truck selling coffee and dessert, soup, scarves, or gift baskets of soaps or gourmet sandwiches and salads: next to a train station, stadium, supermarket, movie theater, office high-rise, or other high foot-traffic area?

Cart and truck businesses require minimal rent, offer high profit margin, are simple so there's less to go wrong, and aren't fads: Coffee, soup, scarves,  nor soap are going out of style.

Worry that a single cart or truck won't make enough money? Once you have your first one working well, simply clone it in other locations until you've made all the money you need. But don't get greedy and have too many branches: it'll be tough to maintain the quality.

Are worried about a cart or truck business's lack of status? You can, for example, tell people you're the president and CEO of the Central Cappuccino Corporation, with branches throughout Chicagoland.

As I said, that's a little excerpt from my new book, How to Do Life: What they didn't teach you in school. The book offers not-obvious yet important ideas on career, relationships, physical health, emotional health, education, even life's big questions. I hope you'll check it out on Amazon.

The Un-MBA: I teach the aspiring self-employed the opposite of what is taught in business school

Many of my clients aspire to self-employment, entrepreneurship. Much of what I teach them is the opposite of what's commonly taught in business school--and that's not surprising. I am most critical of universities' attempts to prepare people for a career.

For example, knowing that law schools, especially the prestigious ones, focus on theory not practice, good law firms have felt forced to create a comprehensive training program for their new lawyers.

Indeed, most law professors don't know how to practice law. Anthony Kronman, when he was the Dean of Yale Law School, received a frantic call from a friend who had just been jailed: "Please, Tony, get me bailed out of here!" Kronman was forced to admit, "I don't know how."

Same is true of education. I have a Ph.D. from U.C. Berkeley in the evaluation of education and, along the way, had to take courses from professors who taught in Berkeley's K-12 teacher-education program. They may have been assiduous researchers of arcana but as teachers, most were mediocre or worse. Certainly, none were the master K-12 teachers who should be preparing our future teachers.

My physician says he learned most of how to be a good doctor after he finished medical school.

But it is in the field of business where I most personally see how badly universities prepare people for their career. I have helped many of my clients to become successfully self-employed, and also have clients, colleagues, and friends with MBAs. I see such a discordance between the principles of starting and running a business taught in business school and what I've seen work in the real world:

Biz schools say "Innovate." That is very risky advice. Sure, a large corporation can take risks. Its deep pockets allow it to stay in business even if many attempts at innovations fail. But individuals or small businesses are likely to run out of money. Indeed, there are so many reasons why an innovation might fail: development costs are high and subject to overruns, the product doesn't work, the public doesn't like it, the public too-quickly stops liking it, and/or a competitor comes up with a better or better-marketed product. That's why they say, "The leading edge often turns out to be the bleeding edge."

Sure it's fun to innovate and, sure, the world benefits from innovation, but if you don't have the deep pockets to afford the multiple failures that precede even most successful entrepreneurs' success, it's wiser to replicate a successful type of business than to innovate.

It's easiest to find a successful business to replicate in the small (therefore affordable) retail space: If a reasonable percentage of small retailers in a certain category are busy, it's a sign they're successful. So, for example, at lunchtime, there are lines in front of many food trucks. I'd simply watch the busy ones, incorporating their best practices plus consumer-tested recipes. I'd hire the owner of one of those food trucks as a consultant to help me prepare to open-up shop. (I'd agree to not locate mine near his.) In sum, my mantra: Don't innovate; replicate.

If I did want to innovate, I can reduce my risk by asking deep-pocketed business owners and executives, "What in your business is annoying you?" If my queries yield a simple, doable business idea, I'd ask similar businesses if they have the same problem. If so, I could create that innovative business with relatively little risk.

Biz schools urge you to quickly get big. "Scalable" is one of biz schools' favorite words. Alas, that too is dangerous advice for small businesses and especially for individuals wanting to be self-employed. True, even if the aforementioned food truck were successful, it probably wouldn't yield enough profit to earn me a sufficient living, so I would need to clone it in another good location. But I'd stop after just a few trucks--as soon I netted $200,000 a year. The more locations, the less control you have over quality and cost control, and the difficulty of operating it well tends to mushroom. So I teach my clients, "Don't be greedy. Get just big enough." (And live modestly so you'll always have enough money.)

Biz schools focus on high-status businesses: high tech, biotech, medical devices, environmental technology, multinational corporations, etc. I teach my clients the opposite: start a low-status business, the grungier the better. That way you're competing with less capable business owners. Few Stanford or Harvard graduates aspire to owning diesel repair shops, mobile home park cleaning services, installing and removing home-for-sale signs from lawns, shoeshine stands, cleaning out and installing cabinets in basements and garages, gourmet food trucks, rehabbing tenant-damaged apartment buildings, carts selling soup, scarves, knockoff designer purses, French soap, or coffee, or placing and maintaining laundry machines in apartment buildings. It's far easier to compete successfully in such low-status businesses. I teach my clients, "Status is the enemy of success."

Biz schools focus on intellectually meaty, complex businesses like the aforementioned high-tech, biotech, etc.. Alas, the more complex the business, the more that can go wrong. I teach my clients to choose a simple business, such as those I list in the previous paragraph. Each business location may yield insufficient profit to support a family but, once you've refined the concept, as I said, just clone your simple business in another location(s.) Yes, keep it simple, stupid.

Biz schools urge, "Choose a business with high barriers to entry;" that way it's tough for competitors to enter the market. That's valid advice if you're a deep-pocketed corporation but it's usually dead wrong if you're the typical cash-strapped entrepreneur. I recommend that most aspiring entrepreneurs start a business that requires little capital and then, as mentioned, use its profits to clone it.

Biz schools proceed on the principle, "It takes money to make money." I teach the opposite: You must constantly look for ways to get what you need for little or no money. For example, I urge that, where possible, you run your business out of your home, car, a Starbucks, a condo development's community room, or friend's apartment that's vacant during the day. When buying something, I urge such cost-effectiveness techniques as to ask yourself, "What must this cost to manufacture?" That enabled, for example, one of my clients to buy silk scarves wholesale for $1 a piece than from another "wholesaler" who wanted $10. Of course, I also encourage my clients to consider buying last year's model, used or cosmetically flawed items, and using the Internet for price shopping. In short, I teach my clients, "Start with 'How can I, without undue hassle, get this for free or very cheaply?'"

Biz schools urge entrepreneurs to delegate: "You can't do everything," they urge. In contrast, I encourage my clients to, when starting their business, to do as much as possible themselves. Of course, that conserves cash--the life blood you must preserve lest you go out of business before you become profitable. Also, spending time immersed in the business's weeds tends to build your psychological ownership in and enthusiasm for the business. Most important, being hands-on allows you to gain deep understanding of how to make the business work.

For example, if my goal were to make $200,000 a year from a chain of shoeshine stands, I'd run the first one myself, taking full shifts doing the shoeshines. That would enable me to truly understand the customers, the art of shoeshining, identify upsell opportunities, how to optimize the experience for the shoeshiner and the customer, theft and vandalism problems, disgruntled customer issues, everything. Only when I really knew the business and it was clearly becoming successful would I clone it and then delegate by hiring someone to run the two shoeshine stands. I would take all the time needed to find great employees and would treat them well, for ethical reasons and because I want them loyal to me. Even then, I would remain actively involved in the business: visiting, training, inspiring, and, where needed, setting limits. My rule: Don't delegate prematurely or too much.

As a way of summarizing, here's how I'd start the aforementioned shoeshine business to maximize my chance of ethically and relatively quickly, netting $200,000 a year:

1. I'd search Google and Amazon to find the best articles and books on running a shoeshine business.

2. Using service review sites such as Yelp, I'd identify a half-dozen shoeshine stands that had excellent reviews and many reviews. The latter would indicate that a business has many customers.

3. I'd visit each of those shoeshine stands and note everything: the characteristics of the location, signage, menu and prices, equipment, products used, procedure used, ergonomics, the shiner/customer interactions, how people who needed to wait were dealt with, amenities, everything. I'd buy a shoeshine at each stand and while getting the shine, ask such questions as, "What should I know about running a shoeshine business that might surprise me?"

4. I'd amalgamate into my shoeshine stand the best practices of the articles and books I've read and the half-dozen shoeshine stands I visited.

5. I would take the time to find an excellent location that I could get for free. (Remember, my rule: "Start with free.") For example, I'd ask the owner or manager of a large office building to let me run my stand for free in the lobby. My pitch: "That enables you to provide a useful service for your tenants without it costing you a dime."

6. I'd run the shoeshine stand myself for a week, a month, whatever it took for me to fully understood the business.

7. Then, because I don't want to make a career of shining people's shoes, I'd take all the time needed to find an excellent person to replace me.

8. Next, I'd turn my attention to finding another excellent location and an excellent person to staff it. I'd keep expanding only until I netted $200,000 a year, always staying actively involved to ensure the quality remained high, my shoeshiners happy, and my profit adequate.

9. Finally, I'd sell the business or keep it as a cash cow while I turned to my next project: entreprenurial, social entrepreneurial, or volunteer--like writing this blog.

As always, dear readers, comments are welcome.

Top Careers for 2011 and Beyond

I've given these careers and fields a high overall score on job satisfaction, and compensation including benefits and job security.

These picks are a distillation of the many thousands of nuggets that have entered my brain: from my career counseling clients, colleagues, radio show guests and callers, friends, reading (and I'm a pretty voracious reader of career material,) plus self-generated thoughts.

• Optometry. This has long been one of my top-recommended careers. Yes an O.D. degree requires four years of post-bachelor's study or a six-year B.S./O.D. degree, but the career has major pluses. Optometrists, unlike many other health care providers, have a very high cure rate, they rarely get a middle-of-the-night emergency call, there's no blood, guts, nor communicable diseases, the aging population increases demand for optometrists, and optometrists make a six-figure income.
  

Note: optometrists are different from opticians, who dispense lenses and glasses, and from ophthalmologists who are MDs and do major surgery. Optometrists fit patients for lenses, diagnoses diseases, may prescribe some medications and eye exercises, and even do some minor surgeries.

• Grant/Proposal Writer. The government, foundations, and nonprofits, distribute money through a proposal submission process. So whether it's a desk manufacturer who'd like to sell to the state, a Native American Dance Troupe that would like a grant from the Feds, or a drug addict job training program that wants money from a nonprofit, all of them need grant writers.

• Fundraiser. Money is nonprofits' lifeblood. So nonprofits generally pay the highest salaries to fundraisers and, of course, to the executive director, who is also responsible for fundraising. So even if there are program cutbacks, nonprofits are likely to keep spending serious dollars on back-office development staff (those who research prospects to identify their hot buttons,) developers and maintainers of the donor database, fundraising event planners, and of course, pitchers: those with the moxie to extract big bucks from wealthy individuals and corporations.

• Adult Day Care (the entire field, not just direct care providers.) Most elders want to age in place, that is, in their homes, but they'd do well to have meals prepared and companions to eat and recreate with, someone to be sure they take their pills, etc. Less expensive than 24/7 assisted living, adult day care is growing in popularity with elders, their families, and long-term care insurers. Typically a bus picks the clients up in the morning and drops them back home after dinner. These facilities, like all businesses, employ a wide range of people: from accountants to HR people to CEOs, as well as, of course, cooks, janitors, nurses, patient supervisors, etc.
• Military. I believe the U.S. will enter a period of decreased foreign adventurism yet will continue to maintain a large headcount. Benefits are extraordinary: for example, free housing and education for the servicemember and family after just 90 days of service! Please know that the military offers an enormous range of careers beyond grunt: from artists to engineers.
• Health care administration. The 2,500-page ObamaCare programs will cover an additional 32-45,000,000 disproportionately low-income high health care users plus 12,000,000 more when Obama fulfills his promise to legalize illegal immigrants and their family members. All of that will profoundly affect health care in the U.S. Hospitals, physician group practices, health organizations such as Kaiser, Humana, Sutter, etc., will, for the foreseeable future, be employing large numbers of people to deal with the myriad required changes.

• Bilingual special education teachers, school psychologists, and speech therapists. Limited-English-proficient students are America's fastest growing category of students, and, by definition, they have extensive, often expensive, special needs. Unlike education for regular education kids, services to special education students are absolutely mandated by law, no matter how tough the economy or how great the cutbacks to other students. So funding will exist to pay for teachers, school psychologists, speech therapists, special bus drivers, etc., to provide the mandated "free and appropriate education" for all special education students.

• Federal manager. Despite the Tea Party win, the Keynesian administration and Senate remain in charge. That means the federal government will not shrink and, for non-star employees, the federal government, compliments of the taxpayer, continues to offer the best deal in town: surprisingly high salary and unsurprisingly excellent benefits, holidays, vacation, retirement, and job security. At this moment, there are 190 U.S. federal manager positions advertised on usajobs.gov. Half of them pay over $100,000.

• Welding. I've often read that this field has shortages, especially stainless-steel welding and welding in tight spaces--for example, inside oil refinery pipes. That's true not just in the U.S. A recent 60 Minutes reported a severe welder shortage in Brazil.

Self-employment ideas

I like these because they require short training and small investment, have high profit margins, are likely to survive a tough economy, and are minimally subject to trend risk--that is, demand is unlikely to wane.

• Parking-lot oil changing. Give an owner of a mall- or large employer parking lot a fee in exchange for allowing you to use a few of their parking spaces for changing oil while the car owners are shopping or at work.
• Gourmet salad and sandwich (including burrito) trucks or carts. I've been touting these for years. Last year, they caught on big-time on the coasts. I believe there's still room in high-foot-traffic locations in non-coastal cities.
• Wellness coaching. I believe the days of the "ten more pushups!" fitness trainer are waning. People are turning to wellness coaches who help them with all aspects of wellness: alcohol, drugs, and smoking, stress reduction, weight control, and yes, "Ten more pushups!"

A good source of passive income?

What do you think of this no-cash-required approach to earning passive income?

Every month or two, search google.com/trends, which lists the currently most searched terms.

Pick out a hot topic that intrigues you but is likely to fade in popularity in six months to a year.

Quickly crank out a 25-page ebook on that topic. That's not as difficult as it may seem. It's like a term paper using reader-friendly rather than academic-stuffy language, with no citations required. Use Google as a key research tool, which speeds the process.

Sell your ebooks on Amazon, eBay, and Scribd. Money should start rolling in.

You'd get your book to market long before a traditional book publisher could or would--By the time such publishers would get the book out, that trendy topic would have faded.

Sure, this is not a totally passive income source--After all, you have to write the ebooks. But the only truly passive income sources require a cash investment, on which you hopefully get a return. I'm assuming you don't have enough to invest that you can live off investment income. Writing ebooks on trendy topics requires an investment of $0 and, like all passive income, brings in money while you sleep.

Making a Living at Garage Sales, Yard Sales, Moving Sales, and Estate Sales

I predict that you could make a living from garage sales, yard sales, moving sales, and estate sales, as follows:

Every week, consult local newspapers and websites to find the upcoming garage, yard, moving, and estate sales. Especially note those in middle- to upper-class older neighborhoods. Why older? Because their residents are more likely to have been there for years and thus have more good stuff to sell. Use maps.google.com to print out a map of the area, and put an X on the locations of all the sales you plan to visit.

On the first morning of the sale, plan to arrive at your first stop at least 15 minutes before its scheduled start time. Bring your iPhone or other wireless internet device with you so you can check ebay.com to see what similar items sold for.

Generally, the professionally run sales are the worst for you because they charge high prices. If you see a professional sign, skip it or come back 1/2 hour before the sale ends--at that point, they may be willing to give you a real bargain. In any event, you must be a tough negotiator or you probably won't make enough money to make this endeavor worth your while.

To take advantage of auction fever, sell your lightweight items (jewelry, collectables, etc) on ebay. Sell heavier items, for example, furniture, at a consignment store, on craigslist.com, or a publication read by people likely to buy the product you're selling.

Keep track of what sort of products are yielding you the highest net profit and focus subsequent treasure hunts on those items.

My Favorite Business Idea

I come up with business ideas all the time but I've continued to like this one for ages. Indeed, I believe it may be the lowest-risk way to become financially independent: a chain of coffee carts. Succeed with one and keep cloning it in a different location until you're making all the money you need. Here's an article with some details:

Guide to Coffee Vending Carts
By Andrea Townsley

Making a living off coffee vending cart sales is relatively easy. You have little overhead and you don't even have to deal with advertising--your customers are purely from foot traffic. As you become better known, patrons will keep coming back when they're in your area.

You can set up your coffee vending cart in a number of places, including busy sidewalks, parks, malls and near special events. Select from a variety of mobile or stationary cants, and, if you have the desire and cash, customize the cart you choose to best fit your business.

Before you jump in and buy a cart to start your business, think about the following:

1. Do some research on what it takes to start up coffee cart businesses. Your most expensive cash outlay will be for the cart itself.

2. Determine the best locations for your coffee vending carts. You must choose places that have lots of foot traffic as well as customer bases that will take advantage of your services.

3. Start with a small, basic cart and then upgrade as you begin to see some profits. When buying a coffee cart, just start out with an affordable cart that fits your initial needs.

Action Steps

Find a quality mobile coffee cart for sale Portable coffee carts have to be able to stand up to the abuse caused by transporting them around on a regular basis. If you want to sell coffee on the streets, at concerts, art shows or special events, you'll need a sturdy cart that's made well.

I recommend: Check out the towable carts that Apollo Food and Beverage Carts offers. If you're interested in exploring coffee cart franchises, Cuppy's Coffee & More might be the right opportunity for you.

Set up a stationary coffee vending cart Many hospitals, airports, malls, theme parks and other gathering places have coffee carts and kiosks set up for their visitors. Stationary carts are better for these locations since it would be a real hassle to move a mobile cart each and every day.

I recommend: Choose from a wide array of coffee and espresso vending carts at Merchandising Frontiers. Take a look at the variety of coffee and beverage vending carts at AAA Commercial Products.

Consider custom coffee vending carts When you start a coffee cart business, it's beneficial to get your company's name and logo printed on your awning or your cart. This makes you look more professional and allows customers to spread your name when they talk to their friends about how good your coffee is.

I recommend: Compare the carts from AllStar Carts and Vehicles, which can be customized for your business. 21st Century Products also offers custom carts.

If you only need access to a cart for special occasions or if you only work seasonally, consider locating a coffee cart rental company in your area. That way, you're not paying to use the cart when you don't even need it.

My Latest Business Idea: FastShirt

There are eight buttons on a typical shirt, ten if it’s a button-down. As a result, you spend about a minute every time you put on a shirt. 

Say you wear a shirt four days a week. That’s four hours a year or 320 hours over a typical lifetime. That’s 320 hours that yields absolutely not a moment of pleasure nor a whit of productivity. 

But what if there was a shirt that could be donned in five seconds instead of sixty and would look better? Wouldn’t you prefer it? Enter FastShirt—a shirt that closes with Velcro. Not only does it close fast, it’s more attractive because there are no buttons to break the placket's clean line.

I believe one could sell enormous quantities of these. Most of the world’s seven billion people wear buttoned shirts. If even 1 in 10,000 people bought just one shirt, I would have sold 700,000 shirts—and as you’ll see, at a net profit of approximately $3 a shirt: a cool $2.1 million. 

Here’s how I’d develop the FastShirt concept: 

Step 1:  I’d create a prototype by having a local seamstress replace the buttons on a standard white business shirt with Velcro. 

Step 2: I know that Wal-Mart sells great-looking iron-free standard business shirts for $8.99. So, I estimate that Wal-Mart must pay no more than about $3 per shirt. I’d google "dress shirt manufacturer" to find one willing to make me a trial run of 1000 standard business white shirts with Velcro closures at $3 a shirt. I’d try to convince them to do so by letting them know that if the trial is successful, my goal is to eventually order shirts in quantities of 100,000+. 

Step 3: I’d try to convince the major retailers of shirts (Lands End, LL Bean, Macy’s, etc.,) to pilot test FastShirt—selling it to them at $9 per shirt, expecting to retail for $29.95 (the same price as their standard business shirt.)  If they all said no, I’d put samples in my car and drive from retailer to retailer trying to convince them to try selling my shirts. If necessary, I’d sell them on consignment—if they don’t sell, I’ll buy them back. 

Step 4. If I was turned down by the major chain retailers but then had a successful trial with a local retailer, I’d report that success to the majors and see if that would change their mind.  If my trial utterly failed, I’d sell the shirts on eBay and/or from a search-engine-optimized website. 

So this strikes me as a relatively simple business that has small risk and large potential.

What do you think? Any suggestions for the idea's improvement?

Starting a Consulting Business

Are you on the chopping block? Already been chopped? Or are you just tired of working for The Man?

 If so, you may be thinking about starting a consultancy. Here's how:

Sure, if you have great expertise in a high-demand area, consult in what you know about.  

But if your expertise isn't that strong or demand for it is low, you can still establish a successful consultancy. (See below for ideas.)  Like the big consultancy firms do, get the consulting assignment and then hire a contractor(s) with the technical expertise to do the job. 

By subcontracting with a technical expert(s), you may need only  enough expertise to get, not implement, the consulting contract.  Here's how:

1. Do the equivalent of a term paper's worth of research in the area so you know enough lingo and key issues to get a meeting with prospective clients.

2. With or without an introduction from someone in your network, contact 50 potential clients. The model I usually recommend is:

• Call to say you'll be sending an email with a link to your site.
• Email that link and a request to meet with them to discuss if and how you might solve a problem for them.
• Call to follow up. Your goal is learn about what, specifically, they might like you to do and to set an appointment for a subsequent meeting in which you'll bring a technical expert(s) to discuss details.
•  If there's no response, call once more.

2. Live or via phone or even webcam, bring the aforementioned technical expert(s) to your meeting. 

3. Pricing your consulting assignments: Charge a flat fee (with clearly defined parameters of what that will include) that will ensure that you and your technical person(s) are well paid yet still provides excellent value for the client.

What to consult in:

Pick a consulting area that meets as many of these criteria as possible: 

• in-demand
• is complex and technical (If it's easy, most of your potential clients would do it in-house.)
• will yield the client high return-on-investment
• is in an Obama priority area (for example, financial regulation, alternative energy, inner city education, health care for low income people, illegal immigrants).  This link shows you how to become a federal contractor. 
• meets a new government mandate.
• involves China (for example, manufacturing, import, export).
  
• you have considerable expertise

Finally, do a great job. Too often, consultants, especially in their early, hungry stages, focus only on getting the next consulting gig.  The successful consultant is excellent both at marketing and in providing the consulting service. 

My Favorite Home-Based Businesses

Here's my current list of favorite home businesses. They require small investment, are offshore- and recession-resistant, and offer a good risk/reward ratio. 

• Agent for job seekers. So many job seekers feel unable to write a resume and cover letter, let alone cold-call potential employers. Just as actors and musicians hire agents to land them  auditions, you can help job seekers to land job interviews. 
• Marketing consultant. For example, help small business owners to market their business. Specialize, for example, in mom 'n' pop restaurants, or help owners of vacation homes and time shares to get their places rented.
  
• Consulting writer or editor. Solicit small businesses to hire you to write or edit a newsletter,  ads, catalog copy, even business letters. 
• Counselor to college-bound students. You'll have an edge if you can also advise on how to find money for college.
  
• Personal, career, life-transitions, money, or dating coach. 
• Accountant or bookkeeper. Especially as electronic records become ubiquitous even in small businesses, this is a business you can run from home.
• Create small-scale architectural models for developers, realtors, municipalities, architects, and landscape architects.
• Tutor. You can charge surprisingly high rates, especially if you specialize. Examples: math for girls, autistic kids, organic chemistry.

Alas, the idea is only 10% of success. The rest?

• Practical intelligence. That means the ability to buy cost-effectively, price at market value, and quickly solve the myriad problems that arise in running a business. You can't always ask a consultant or friend to help you.
  
• Drive. Procrastinators, you're probably better off working for someone else.
• Willingness to sweat the details. You're at risk of failing if you think you can get away with being big-picture. You must be willing to to discipline yourself to take care of the details.

Can you think of any other home-based businesses that you think should be added to my list?

A Low-Risk, Fast-Start E-Business

1. Visit Google Trends to see which search terms are being searched much more than they were yesterday. Today's #1 is "John Phillip Law," an actor who died today. (I wouldn't choose that one because it's unlikely to stay hot for more than a couple of days.)

2. Create an e-commerce site, for example, using Yahoo Small Business E-Commerce Solutions. Get a domain name as close to the term as possible. In our example, you'd try to get something as close to JohnPhillipLaw.com as possible.

3. Sign up to be an Amazon Associate--that gets you 5% of revenue clicked through from your site.

4. Search Amazon.com for books, videos, and other products related to your selected search term (In our example: John Phillip Law.) For each product you think is good (in part, based on the reviews on Amazon,) paste its image and URL (which has your Amazon Associate number embedded) onto your site's home page.

4. On the home page, mention the search term perhaps a half-dozen times. But don't just repeat the word one after the other. Use the term so it logically makes sense within the text.

5. Watch the money roll in.

6. Keep repeating the above process with other hot Google Trends terms that are likely to stay hot for at least a couple of weeks.

7. When one of your sites starts to make less money than the cost of maintaining it, drop it.