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.

Days of Our Work Lives: An unvarnished look at work today: Part II: Susan's Saga. Episode 13: The Town Hall Meeting Cafe

Days of Our Work Lives

Part II: Susan's Saga  

Episode 13

The Town Hall Meeting Cafe

In the previous episode, despite being a star, Susan got laid off--Part of her work was automated, the rest offshored.

Susan was happy to keep her promise to make the four-hour trek to Ben's condo. 

For a guy's place, it was surprisingly well-kept. She liked that. 

Susan was afraid she'd never land another job. "Ben, I was at each of my last three jobs for a really short time and before that, I was a stay-at-home mom."

"And a music teacher."

"Part-time. Very part-time. Oh, I'm the perfect job applicant: 15-year-old degree in sociology from San Francisco State, stay-at-home mom who gave piano and voice lessons a few hours a week for 14 years. In my next job I got accused of creating a hostile environment against gays. As a sales clerk at Rory's Ag Supply, I lasted a grand total of two hours. And now I just got laid off after a big three months as an academic adviser. Now that's the sort of focused career with "a pattern of continual advancement" employers are looking for. Who's going to hire me, Jack in the Box?"

Ben offered, "Maybe you need to start your own business, hire yourself. That way you instantly go from hard-to-employ to CEO."

"Yeah, part-time music teacher. Big CEO."

"Well maybe you need to do something with a better chance of making a real living?"

"Like what, start a biotech company?"

"Of course not."

"Ben, I was joking."

"I know that but there's a point here. Any time you go into some cutting-edge field, you're competing with the world's smartest, big-moneyed-interests. And even if you came up with, say, some amazing drug, you'd need a fortune and ten  years to bring it to market. I used to work for a biotech company in regulatory affairs. To get FDA approval, it takes ten years and three truckloads of data, I swear."

"No wonder drugs cost so much."

"Susan, I'm talking about something simple, something under-the-radar, something all those geniuses from Stanford and Harvard wouldn't touch. You want a business where the competitors aren't that smart or hard-working. Like a business installing real estate sign posts or cleaning windows."

"You expect me climb up to the 44th floor of buildings with a squeegee?"

"You'd hire kids to do that. You'd do the sales and marketing. And the books--now that you know Excel and Quickbooks."

"What, I'm going to tell my family and friends I clean windows?"

"Susan, status is the enemy of contentment. You can quote me on that. Millions of executives, doctors, and lawyers, especially lawyers, work 12 hours a day, finally get home totally stressed out and collapse in their 3,000-square foot house getting loaded every night. Many people who run simpler businesses don't have that."

"But can you make money?"

"Well, take for example, a shoeshine stand in Seattle's financial district, at a hotel, or at the airport. It costs almost nothing to start. Profit margin's amazing. The only product with a higher margin is cocaine."

"You can't make a middle class living with a shoeshine stand."

"Maybe, maybe not. But you sure can net at least $20,000 a year. Then you simply clone it. You work in the first stand until you've learned the business. Then you hire a trustworthy friend to work there--pay them fairly, with profit sharing--and you open another one. Five locations and you're making six figures."

"I still can't see myself running a shoeshine stand."

"What could you see yourself running?"

"I dunno, maybe a cafe or something."

"Susan, there's a cafe under every rock in Seattle, even here in Sage River."

"What if it had something special to bring people in, keep people there."

"Like entertainment?"

"Maybe. At nights, maybe poetry readings, folk guitar, light jazz, comedy. And during the day, let me think..."

"You're doing great, Susan."

"Hey wait a minute. When David and I went on our honeymoon to Switzerland, there was a cafe called The Community Cafe. And in the window was a blackboard: Anyone could sign up to lead a one-hour discussion on whatever topic. We went back three times: Once they were talking about immigration, the next time Swiss banking secrecy, the next time whether they should rescind  legalization of drugs. Every time we were there, it was packed."

Ben added, "In America, we could call it the Town Hall Meeting Cafe."

"Town Hall Meeting Cafe."  Hmm.

"Susan, let's do it together."

"What?!"

"Really, Susan. I'll do all the tech stuff, you bake and do the people stuff: serve, make people feel welcome. Hey, now that you know Excel and Quicken, you can even be the bookkeeper!"

"With help...Ben, this is crazy! It costs a lot of money to start a cafe. I inherited some money from David but I can't afford to lose that."

Ben was on fire: "Like I said, there are a zillion cafes. Too many. Lots of them go out of business and we could buy a cafe, fully outfitted, for a song--You could contribute eight bars. And for the rest, we could get credit cards that are zero interest for the first year. After a year, we'll have good cash flow and can pay off the credit cards without paying a dime of interest."

"We couldn't get that much in credit cards."

"If we need more money, wouldn't your parents invest a little? And how about that rich friend you told me thought you were great?"

"Ben, this is crazy!"

"Let's sleep on it."

And they did...together, for the first time.

And when they awoke, in each others' arms, they were more committed than ever: to the Town Hall Meeting Cafe...and to each other.

The next episode is HERE.

"Six Fresh Ideas for a Budding Entrepreneur" named "This Week's Best"

I was browsing the New York Times online tonight when I was surprised and honored to see one of my U.S. News articles, Six Fresh Ideas for a Budding Entrepreneur named This Week's Best.  (To see that, scroll to the bottom.)

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.

A Variant on My Favorite Small Business Idea

Because rent is low or free, I've long advocated selling coffee, soup, gift baskets, scarves, desserts, etc. from carts or trucks placed in high-foot-traffic locations, for example, near a busy train station.

To learn the business, you run the first cart or truck yourself and then, because just one of them is unlikely to generate sufficient income, once you've got one running well, you keep cloning it until you've made as much money as you need. To minimize employee theft, hire your friends or empty nesters to run the subsequent carts/trucks, and treat them well.

The new variation? Gourmet food. How about sandwiches like organic turkey sandwiches with pesto and Danish havarti cheese and heirloom tomatoes on ciabatta bread? Or French crepes--the savories with imported ham and gruyere, the sweet with gourmet chocolate and whipped cream? Or baby lettuce salads with fresh pears, gorgonzola, and candied walnuts?

You can charge $2 to $3 more per item for food that will cost you just pennies more--and you'll be a cut above other fast-food operations, mobile or store-front.

Job and Business Opportunities in Rebuilding Haiti

The Chinese symbol for crisis is the same as for opportunity.

If I were looking for a job or to start a business related to rebuilding Haiti, I'd do one or more of these:

• I'd try to get a job at of the companies that will get large rebuilding contracts. To find them, every day I'd Google (both its web and the news tabs) terms like "Haiti, rebuilding, contracts." I'd also look at the job listings at the websites of companies that got large rebuilding contracts after Hurricane Katrina. For example, CH2M Hill got $100 million just to remove damaged cars. Fluor and Shaw received huge contracts to build temporary housing. Ashbritt got a contract for debris removal. SCI provided funeral services. Evergreen International Aviation got a contract for surveillance helicopters and drones to detect violence and airdrop food supplies. Even if one of those companies was not listing a job opening, I'd try to get a job created for me. For example, I just read that Haiti has a huge shortage of tents. I'd spend an hour googling terms like "temporary housing, tents, disaster" to learn what I can quickly. I'd also do some quick Google learning about issues in providing relief to Haiti. I'd then leave voice mail for vice presidents who could create a job for me in supervising tent distribution to Haiti.
• I'd think one link away. For example, of course, companies such as Bechtel will get contracts to help rebuild Haiti's infrastructure and so there will be hiring of Americans to do that. But more under-the-radar opportunities are a link away. For example, corporations will be hired to do the clean-up but they'll need lots of trucks. I'd buy up as many trucks from Haitians as I could, giving them more than they could otherwise get. And then I'd subcontract my fleet of trucks to those contractors. Another example: Many Americans will have to move their families down to Haiti to do the multi-year rebuilding, and they'll want English-speaking, U.S.-caliber schools and tutors for their children. Perhaps you might want to meet that need. Another example of finding work one link away: Everyone knows that Haiti will be rebuilding its infrastructure but might they also take that opportunity to create WiFi throughout Port Au Prince? Armed with my knowledge of the way such enterprises would be successfully implemented in Haiti (again using Google and a few phone calls to experts I found on Google), I'd contact the major builders of WiFi systems and try to get a job created for me.
• I just did a search on USAJobs.gov on terms like "Haiti USAID," "Haiti aid" and "Haiti rebuilding." I could not find one job listing. Nevertheless, I believe that's only because government is always slow to respond, especially in creating jobs. Rebuilding Haiti will be a multiyear process, so I'd keep searching usajobs.gov.
• If I were looking to start a business, I'd get myself to Haiti or at least visit Miami's Little Haiti (hanging out in coffee houses, attend community meetings, etc) to hear where the unmet needs are. I'm guessing they will be basics such as a jitney service, bicycle rental, roof repair, health care supplies, day spas, etc. (Just kidding--mostly--about the day spas.) I'd partner with a local and set up shop quickly.
  

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.

An Idea for a Business: Parenting Training

Before you're allowed to drive a car, you must receive training and a license, yet no training is required to be a parent.

And most people find parenting far more difficult than driving a car. 

I believe that a business that offered high-quality parenting training would enable a person to do well by doing good. 

If you don't have the skills to offer such training, hire someone who does, and you take care of the marketing, accounting, etc.

Your Parenting School could offer one-on-one coaching and/or classes, or even a weekend-long parenting bootcamp aimed at pre-parents and parents of children at different ages, or with special problems: for example, drug or alcohol abuse, learning disabilities, hyperactivity, etc.

My favorite approach to training is to demonstrate model parenting and then provide the parents with supervised practice in dealing with critical incidents in parenting: 

• a baby who won't stop crying
• a destructive toddler
• a child who won't do his homework
• a child who hates school
• a child who is mean
• a child who is disliked
• when your child asks about "the birds and the bees," 
• a child with a drug problem
• a teen who is or is contemplating having sex.

You could market your Parenting School by conducting free or low-cost introductory workshops at PTA meetings,  by writing articles in a local publication, especially one aimed at parents, or by emailing a brochure to local pediatricians and ob-gyns.

Whaddya think?

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.