Do what you love to do
Businesses don't just happen. They are made. Whether you plan to profit by twisting balloons into smile-generating shapes or orchestrating the growth of multimillion dollar, multinational companies, your success relies on what you bring to the business. If you love what you do, your passion for the business will drive you to be knowledgeable, creative and persistent. On the other hand, if your feeling for what you do is lukewarm, your success will be, too.
Turn old standbys into new products
Truly new concepts are few and far between. Most new products or new business ideas are simply spin-offs of old ones. Inline skates is one good example. Essentially, they are ice skates on wheels. Or, depending on your point of view, streamlined roller-skates. Other business ideas are nothing more than new ways of marketing mundane products. Take 1800flowers.com, for example. Florists were around as relatively small, local stores for years --but then Jim McCann, who started with a single retail shop in 1976, acquired the phone number 1-800-Flowers and developed a network of florists. The company saw an opportunity to grow online, and started selling through the early commercial online services, and then the Internet.
You may not have the money, management ability, contacts or desire to launch a major new product like inline skates or the energy or desire to turn your single store location into a multimillion-dollar sales organization. But you don't have to launch anything that large to start a business or introduce a new product. You need to think about what people want to buy and how they would like to buy it.
Years ago when my kids were little, I made money selling beanbags. The twist? I designed them in the shape of frogs and I filled them with birdseed instead of beans to make them pliable and less lumpy to the touch. To attract attention at craft shows, I displayed them in various human poses (sitting up, laying on their side resting their head on their hand, or hugging each other, for instance). I could produce them quickly and kept my costs low by making the frogs from inexpensive fabric remnants. That allowed me to price the frogs low enough to make them great impulse buys for parents who wanted to buy a small, inexpensive gift for a child.
You can spin almost any skill or industry knowledge into marketable new products or services.
A neighbor turned his skill at fixing cars into a repair and tune-up service. His angle? He was mobile. Customers didn't have to drop their car off at the shop. Instead, the "shop" (a van outfitted with tools and auto parts) came to them. Another acquaintance built a business by purchasing large quantities of chemicals and repackaging them in smaller quantities.
And then, there's the grandmother who couldn't find a product to organize her handbag. So, she went out and created one, and turned the product into a million-dollar business.
Look for mundane money-makers
You don't need to create exciting new products or services to go into business, either. Millions of business owners profit by selling routine and sometimes unglamorous services such as window washing, car repair, sandwich making, building maintenance, house cleaning and plumbing. The key to making money with the mundane is to sell something your customers can't do, don't want to do, don't have the time to do, or can't get done well elsewhere.
Tip: one way to making really big money with mundane services is to develop a unique and reproducible method for marketing and delivering the service and then open up multiple offices, or franchise the concept. If you plan to franchise your idea or sell it as a business opportunity, retain an attorney early on who is familiar with franchise law and can help you steer clear of the pitfalls.
Turn that hobby into cash
Do people ooh and ah at your handiwork? Whether you are a whiz at creating floral arrangements or at writing software, look for ways to turn your hobby into a business. You might want to manufacture your items in quantity, license them to other manufacturers, sell them by mail order, at flea markets or on consignment, or open your own retail outlet selling supplies to others with similar interests.
Ask the reference librarian at your public library to help you find trade magazines pertaining to your hobby, and read those to generate new business ideas.
Reach out and teach someone
Do you have a skill others want to acquire? Do you have a knack for explaining things so others can understand them? If so, don't give your expertise away. Start charging for it!
For instance, if you are a karate expert, you might teach at a karate school or open your own karate school. If you're a talented artist, you could teach art at home or in a school.
Tip:: Make extra money selling books, supplies, or other items your students will need to buy to complete the course.
Sell training seminars to corporate America
Don't limit yourself to training individuals or private groups of people. Look for ways to polish up your act and cash in on the $50 billion corporate training market.
What kind of training do corporations buy? Everything from sales, management and computer training courses to self-defense courses.
To locate training opportunities, contact the human resources department and ask to speak to the person in charge of training programs. Introduce yourself to that person and make an appointment to discuss the company's needs and your ability to fill them. If you get the assignment, be sure to have handouts for the class so they know how to reach you for more intensive training on their own.
Mass produce your advice
Selling your product or service one-on-one limits the amount of money you can earn to the number of people you can personally see. To increase your profits without significantly increasing your work, consider turning your expertise into booklets, books, computer programs, MP3s and DVDs that you can market in quantity.
You can use your computer to produce the printed matter and CDs, DVDs, and MP3s. You can outsource editing and production to professionals if you don't have those skills yourself. When sales volume grows, you may also want to outsource production and fulfillment.
If you need help producing audio or video, look for an independent contractor to do the work for you. Elance.com, ODesk.com, and Craigslist.com are all good places to find freelance help.
Be an industry consultant
This is another great way to increase your bank account. If you can solve business problems (such as how to bring waste water into compliance with EPA regulations) or answer important business questions (what steps should be taken to increase market share in a target market or how to manage inventory more efficiently) you can earn substantial hourly fees selling your advice to corporations. Downsized corporations can be a good source of consulting business since they may no longer have experts they need on staff.
Turn a former employer into a valuable source of new business
Just because you leave a company doesn't mean it doesn't need your services. Companies often retain the services of former workers on a freelance or consulting basis. That way they get the benefit of trained personnel without having to pay payroll taxes and benefits. If you leave a company on good terms, ask about contract or freelance opportunities. Don't stop with contacts who work with the former employer, either. Call your former employer's suppliers and customers and tell them about your capabilities. Call their competitors, too. Stress your industry knowledge, contacts and skills. You may soon find that the income you earn exceeds what you made as an employee.
Modify one of your existing products
Sometimes all it takes to create a "new" product is a slight change in an existing product.
Harrison-Hoge Industries is a mail order company in Port Jefferson, NY, that sells fishing lures, inflatable boats and other outdoor gear. To expand their line, the company added a wide-brimmed, canvas hat called the Campesino to its catalog. The hat was a big success, but the owners of the company thought there might be more they could do with it. And there was.
They discovered they could adapt the hat to sell in specialized markets just by changing the hat band. As a result, they began to supply the Museum of Natural History and the Guggenheim Museum (both in New York City) with hats. Each museum's hat has its own distinctive hat band.
Skip the start-up headaches: purchase an existing business
When you start a business from scratch you have to jump through hoops to find and train employees, build up a customer base and find suppliers. But when you buy an existing business much of this infrastructure will already be in place.
Don Pelham bough of MasterCare Cleaning Services, in Seattle, WA, from another businessman. He explains the advantage of purchasing a business this way: "In a start-up you have to pound the pavement while you wait for your ads to appear in the phone books and your website to show up in Google. But when you purchase a business, the phone rings from day one. Ads are in place and working. Schedules are already made. When I took over the cleaning service, there were about 12 jobs already scheduled, 3 or 4 a week, and the phone was ringing a new job every 2 or 3 days. "
Be sure to find out why the buyer is selling; don't rely on what they tell you. Investigate the business yourself. Find out how much traffic it actually gets. Check newspapers and town records for information about any proposed highways, superstores or zoning changes. Check for liens against the business or other problems that could have an adverse effect on the business. Consult an accountant and an attorney before you sign on the dotted line and follow their advice.
Buy a franchise
If you want to start a business but don't want to develop your own products, or methods of doing business, franchising could be your ticket to business ownership. That's because when you buy a franchise, what you get is essentially a build-your-own-business kit.
Depending on the amount of money you invest and the franchise opportunity you choose, you get rights to use the franchise name, distribute a branded product or service, and perhaps use the franchise's methods of operations. Customer leads, help locating your business and other services may be part of your package, too. The benefit of this approach is that it simplifies start-up and may also help reduce the chance of failure.
Buying a franchise won't actually put you in business. You have to do that yourself. But if you choose your franchise carefully, the franchise's products and methods can give you the leg up you need to succeed.
Scott Wallace started his commercial cleaning business in Eden Prairie, MN, this way.
"I had been fired from my job and decided I never wanted to go through that experience again," he says, "so I chose to go into business for myself. I decided to go with a franchise because of my previous business experience--none!"
After researching several types of franchises, Wallace concluded that the best one for him to buy would be a cleaning franchise because the investment was small (prices started under $5,000), no special knowledge was required, and the profit margins were good. He bought a Coverall franchise in 1994 because their Minnesota regional office seemed more interested in having him as a franchisee than other franchisors he contacted.
For his money, Wallace got a package of supplies, equipment, and customers. Then it was up to him to keep the customers and grow the business. A year after he had started he was not only making a profit, but was considering buying a second cleaning business.
Wallace is one of hundreds of thousands of individuals who have turned to franchising as a way to get into business. According to the US Census Bureau, franchise businesses now account for 10.5 percent of businesses with employees in the 295 industries for which franchising data were collected in 2007. Additionally, franchise businesses accounted for nearly $1.3 trillion in sales in these industries.
Despite the large number of franchise outlets and the huge dollar volume of sales, franchising isn't without its pitfalls. One New Jersey couple lost nearly $20,000 when the owners of a startup bread and roll franchise they had invested in went bankrupt. A West coast man sunk his retirement funds into a mailbox/office center franchise and discovered to his dismay that the income didn't come near the claims the company's sales staff had made.
Other problems can arise, too. Franchise territories may not be large enough or competing franchises or private businesses may open, making inroads into your selling area. Licensing fees may be excessive compared to the services rendered, supplies may be too expensive, or you may find you personally don't want to conform to the franchisor's way of doing business.
To minimize the risk, learn as much about franchising as possible. (For more information on franchising, visit FranchiseKnowHow.com.)
Evaluate your own motives, needs, interests and willingness to follow someone else's methods of doing business. Research several types of franchises and compare their profitability and appeal. Consider their track record, and your ability to afford the franchise. Remember you'll need money to live on as well as to get the business rolling.
Once you narrow your choices, call and visit as many current and past owners as you can. Get copies of the franchise's Franchise Disclosure Document (FDD) and read it cover to cover.
© 2012 Janet Attard. All rights reserved.