I received an email from a reader earlier today and I'd like to share it. I think a lot of people could find themselves in similar situation and might find the advice helpful.
"Hello Lazy Man,
I would like to ask for some low cost investment ideas as well as possible work at home suggestions. I've been struggling to make ends meet. I have also tried a few business ideas, but somehow can't seem to keep afloat. I'm doing something wrong and I would like some guidance to get and keep things going.
I have had a home-made candle company as well as a small "gift shop" type business... neither managed to stay afloat. I also have had ideas of a landscaping/snowplowing/tow truck business. I am considering real estate as well. However my credit has suffered due to a divorce and I'm a little nervous about going so large when my smaller ventures have not panned out to my expectations.
Any suggestions of how to make these work? Or perhaps you have some suggestions on some others I can do while working my current full time job. I hope to transition away from the job and put my energy all into the business to quit the 9-5. Any and all help is greatly appreciated."
As is Lazy Man tradition around here, I've substituted a Buffy the Vampire Slayer character for the reader's name. In this case, I've chosen Anya is a perfect example as she grew into quite the entrepreneur. I also edited the email a little bit and in some cases chose some unfavorable sentence structures so please overlook those and focus on the letter's intent.
First things first, congrats on taking a steps to try to reach financial freedom. That's huge. Second, I should start off by saying that I'm not the world's leading expert in any of this stuff, so I hope the reader will get a lot of other opinions. I'm also hoping other readers can share their thoughts and resources as well.
Here are my thoughts on some of Anya's business ideas:
- Candles - I really don't know much about the candle business, but It sounds like a tough industry to get into. How do you compete with with the scale and distribution of Yankee Candle? I can see a small boutique candle business working if you have the right connections and product.
- Gift Shop - This can work, but location and the product are everything. I couldn't open up an Eiffel Tower gift shop here in Silicon Valley.
- Landscaping/Snowplowing/Tow Trucks - These can be profitable, but the business, like many, is about acquiring customers. How are you going to lure people away from their existing suppliers of these services. Are you going to price your landscaping and snowplowing business cheaper than competitors? Will you still make enough money if you do that? These seem to be very competitive businesses. When I lived in New England, it seems I couldn't turn my head without seeing a snow plow or landscape truck.
- Real Estate - This is my favorite time to get into real estate. However, investing in real estate can be tough. You have to have the money upfront to buy a place. You have to have the good credit to get the best interest rates on a mortgage. It doesn't sound like you have either. My wife and I actually own three places between the two of us and though we lose a few hundred dollars a month, we'll own them outright in 15 years, when we expect they'll generate around $5,000 in revenue a month. Some of that money will have to go back into the upkeep of the property and we are mostly likely going to be living in one of them, but there's a lot of upside.
Here are my tips in no particular order:
- Watch Shark Tank - Watch the ABC show Shark Tank on Hulu. The show has a lot of people with ideas much like yourself trying to get funding for their business from experts. The experts pick the ideas apart looking for weaknesses and decide if they want to invest in the company. Though this may be bigger than you had in mind, there are some small business such as lotions that make the show from time to time. Most of the older episodes on Hulu are free, but the current season's require Hulu Plus, which has a one-week free trial.
- Read About Some Side Hustles - My friend J Money at Budgets are Sexy has a Side Hustle Series of second jobs that people take to earn some extra money. Some are not stay at home and others like "phone actress" may not be a fit for everyone. I don't know if any of these are a fit to transition into a full-time business, but it's worth reading about them.
While on the topic of "hustles", I hate the use of the word hustle because it has that double meaning of trying to trick someone out of their money. I wish people wouldn't use it to describe a legitimate business.
- Work from Home - Clark Howard has some great Work from home suggestions, with good tips at the end to look at the FTC suggestions to avoid bad work from home opportunities. (And yes pyramid schemes masquerading as multi-level marketing "opportunities" like MonaVie are represented.)
- Read The Millionaire Fastlane - This is one of my favorite books covering entrepreneurism. It is a pretty dense read as it makes you think on almost every page, but that's a very good thing. I reviewed Millionaire Fast Lane by MJ DeMarco too.
- Look into Kickstarter - Kickstarter is a place where you can get funding for creative ideas. I honestly don't know much about it, except that a friend of mine, Adam Baker, got six figures to get his movie made. There are probably some good tips on how to use it successfully on Man Vs. Debt. One of the great things about Kickstarter, as I understand it, is that you have limited initial risk, since you are using other people's money to get the idea off the ground.
- Look to Sell Products on Etsy - The website Etsy is kind of like an Ebay store of crafts. I just did a search and found 47,419 items in handmade candles. Perhaps that method of distributing your candles or anything else you create can help you be profitable, at least on a small scale.
- Fix Your Credit - The mention of having suffered with credit hurts. I recommend signing up with Credit Karma, as they will analyze your credit and give you tips on how to improve it. Oh and it's free. Having good credit will be helpful if you need to borrow money to get your business off the ground or help it scale better. When you get to that place, one place I would look into to raise money is Lending Club.
I realize that these tips are general. I'd love to say, "The towing business is the answer and it can't fail", but the truth is I can't. If it was clearly the answer then everyone would do it and the competition in the marketplace would drive the prices down to where it wasn't profitable for everyone.
Anya, hopefully, you find these tips helpful. Good luck, and I'll be in touch with you via email.
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