Day 4: The Journey Begins...Again!!

It is my goal to use this blog to teach as I learn, so that as I said before, I can better understand the business principles and methods that I'm going to be using.  My goal is to put these ideas into simple terms, and give actual resources so that after reading this blog, you could start a business yourself.  Plus I just love teaching! :)

I'm so excited about gathering all the information that I've been reading about, and what I've learned from my Business degree, and putting it to use.  When I read a book like the 4 Hour Workweek, I typically just read it for information, but rarely apply it to my life.   Having this blogrimage will help me to critically think about what I've read and apply it.  Starting a business will be a new thing for me, and I'm not sure how much roll over knowledge there will be from the non profit world.  I know how to start and maintain a non profit. I've helped start and I'm on the board of directors for Wisdom's House, and I'm the Business Administrator for Freedom Kingdom Enterprises, so although I wouldn't call myself an expert, I have experience in the nonprofit world.

There are four main steps in starting a non profit:
1. Have a vision
2. Assemble a board of directors.
3. Know what forms to fill out and when (know when to hire an attorney and when to do it yourself.  Ex: For articles of incorporation and bylaws, just use someone else's that has used an attorney.  For 501c3 status, get an attorney.)
4. Set up an accounting process.

That said, starting a for profit has very different steps that I'm definitely not used to.  The first step will be to determine a product that I want to sell.  I would prefer to sell a product rather than a service for a couple reasons.  First because I want the experience of creating a business to sell a product, and second because its easier to automate than a service business would be (more on automation in future blogs).  There are 3 options for products that I could sell:

1.  Resell an existing product - easiest to do, but lowest amount of profit and shortest lifespan
2.  License a product - one person invents it and gets profit when the other person sells it.  You could either be the inventor or the seller and make a lot, but its very complicated and sort of scares me.
3.  Create a product - Either make your own product to sell, or buy a generic product and market it as your own.  This is exactly what Costco does.  They buy a generic product, lets say asprin, from a manufacturer, then slap a Kirkland label on it and sell it for slightly less than a name brand like Advil.

This is a little secret of product sales.  Both the name brand and Costco buy from the same manufacturer, they just sell the product under different names.  It's literally the exact same product, just with different labels.  Crazy, huh?  But thats business, and we'll buy it.

If the product you want to sell is an invention, you can go to www.elance.com and hire mechanical engineers and industrial designers to develop a prototype for you based on what you tell them you want it to do and look like.  Pretty sweet, right?

The easiest and most profitable things to sell are information products, such as how to videos.  They are easy to produce, cheap to make, and difficult to duplicate.  Tim Ferriss, author of the 4-Hour Workweek, says that the best product to sell is something that appeals to a demographic or niche that you are a part of.  Selling outside of your niche isn't advised, although not impossible.  I really love music, so I could sell something to music lovers.  But more specifically than that, I love to play music, and more specific than that I love to play experimental progressive rock.  The more specific a niche is, the easier your product is to sell, and the more effective it will be.  Selling a product to people that love to play experimental progressive music is easier than selling to all people who listen to music, because its too broad.  Does that make sense?  That is a shame, because I have a clothing product I really want to sell for newborns, but I'm not a parent.  I'll explain what that product is and get your feedback on it in a later post.

There was a man who made a home video on how to install a security system in your storage facility for $200, he then produced the DVD's for $2 each and sold them for $95 each, making him hundreds of thousands of dollars with no employees.  Doesn't get much more specific than that.

For those of you that know me, what is a niche that I could sell to?  What specific groups am I involved in and what products could I sell to those groups?  Your answers will really help me!  (P.S. I'm so glad I changed blogrimages :)