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Copyright 2000, Janet Attard Finding the Real
Opportunities: Business ideas are all around you. They are lurking in your garage, in your basement, in your kitchen, and in your children's room. You'll find them in magazine ads, at your neighbor's house and at work. They are right there in the vegetables you brought in from the yard . . . in the stack of papers next to your laser printer . . . in the back of your truck . . . and at the back of your mind. You don't need to be a genius or an MBA to spot those ideas and turn them into profits, either. Identifying business opportunities is often as easy as identifying problems many people share and finding a way to solve them. When Matthew Osborne, an entrepreneur from Columbus, OH, wanted a way to make money, he found one right at his feet: dog dirt. Unlike most people who just gripe about stepping in it or having to clean it up, he started a business removing dog waste from homeowners' yards. The business was an immediate success, and after several years, he sold the business for a quarter of a million dollars. Even then, however, he continued to make money from his idea by writing a booklet about how to start a pet waste removal business and selling the booklet on the Internet. Other business owners have turned their hobbies, interests and skills into satisfying and often lucrative businesses, simply by seeing a need in the world around them and finding a way to fill it. You can, too. Do what you love to do Turn old standbys into new
products 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 build a multimillion-dollar sales organization. But you don't have to launch anything that large to start a business or introduce a new product. 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. 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, several paper suppliers have created businesses by preprinting colorful brochure or flier designs on paper stock. The preprinted papers are then sold to businesses and individuals who use their laser printers to print out their own sales literature and fliers on an as-needed basis. Look for mundane
money-makers 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 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 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 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 You can use your computer to produce camera-ready copy or complete copies of printed materials. You also can generate computer diskettes, and have professionals produce your materials if the volume warrants. Don't try the "loving hands at home" approach for audio or video tapes, though. The result is likely to be an amateurish product. Lloyd de Vries, a producer at the CBS News Web site who also worked for many years as a producer at CBS News, Radio, suggests that if you're on a tight budget, you may be able to produce master tapes economically by having them done by students in broadcasting courses at local colleges. De Vries also suggests taking a broadcasting course, yourself. "That way, you can polish your skills and at the same time gain access to whatever studio facilities are on campus as part of your course fee." Another option is to contact your local radio or cable TV stations and see if they'll rent you studio time and provide a crew to make a tape. If you have a proven concept and will be pumping a lot of cash into marketing your tapes, have them prepared professionally. Look in the Yellow Pages under video production services for names of companies to contact for both audio and video production. Be sure your concept is tested and saleable before going this route, though. Depending on where you live and what quality you seek, the cost of producing video tapes professionally runs between $500 and $1,000 per minute of finished video tape time. Be an industry consultant Downsized corporations can be a good source of consulting business since they may no longer have experts they need on staff. A big key to success is to be an expert with years of experience or highly specialized knowledge. If you are newly self-employed, market yourself as an expert rather than as a worker. Turn a former employer into
a valuable source of new business Modify one of your existing
products 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 Don Pelham, owner of MasterCare Cleaning Services, in Seattle, WA, a service he bought 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 hope they get the phone number right), says Don Pelham, a Seattle, WA business man who bought MasterCare Cleaning Services as a going business. "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 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 International Franchise Association (IFA), there are approximately 760,000 franchise units in the United States that generate more than $625 billion in sales each year,. 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. 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 Uniform Franchise Offering Circular (UFOC) and read it cover to cover. You can get copies of franchise UFOCs, and get a mailing list with names of more than 100,000 franchises by contacting FranData at 800-793-8640. For help with startup questions or problem solving after you are in businesses, contact: The American Franchisee Association Or, call: You can get information about the franchise industry from our franchising web site, FranchiseTrade.com. About the author
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