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.
Some of these ideas may require funding. Fundbox is a company that has business loans for women. Here’s their latest womens business loans interest rate.
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.
J. Money says
I’m gonna “hustle” you out of your money next time we play Catan ;)
Lazy Man says
Next time I won’t go easy on you in Catan.
1st, pardon my fangirling. Oh my gosh, I love Buffy the Vampire Slayer so much!
2nd, I love Esty. So many cool things can be found there. I actually don’t let myself on now because I want everything >.<
3rd, people can do a lot with vague tips ;)
Good luck Anya!
Can’t really tell if the person has debt, but if you could start eradicating those debts your minimum monthly payments will disappear.
With monthly payments gone it will be like giving yourself a raise as each one goes away!
Lazy Man says
Good point Evan. I couldn’t tell either, so I kind of just went with the entrepreneurial aspects of the question.
Mona vie is not a pyramid scheme. It is a legitimate network marketing business. It offers products for sale. Network marketing is a legitimate business model. Warren Buffet owns pampered chef. Do you think he would have bought a pyramid scheme? I am so tired of people bad mouthing mlm. It’s a viable way to create an income stream. It’s not for everyone, but for those who are willing to dive in and commit, it does work!
Lazy Man says
There are a lot of myths about MLMs and pyramid schemes. Most of them are spread by the MLM industry. When you said that MonaVie is not a pyramid scheme because it offers products for sale it tells me that you’ve been told one of the lies that the MLM industry has been saying for years. This myth is so common, I had to write an article about it just so that when people spread it, I can direct them to the truth with many backed up examples from the FTC, the unbiased authority on the subject: MLM Truth: MLMs with Products Can be Illegal Pyramid Schemes
Years ago, I wrote about Warren Buffett’s Pampered Chef and MonaVie and how that is different. You are making the mistake of thinking that if one MLM is legit, they must all be or assuming that if I say that one is not legit, then must all not be. Neither is true. As the FTC says, “Not all multilevel marketing plans are legitimate. Some are pyramid schemes.” That leaves room for Pampered Chef to be legit and MonaVie to be a pyramid scheme.
Considering that hundreds of studies have been on MLM, it is not a suggested way to create an income stream since over 99% of people lose money participating in them. You could consider it viable in the same way that being a professional poker player is viable, but the odds are not good. It’s also a myth that committing to MLM works… see It’s Not a Matter of Effort, it’s a Mathematical Certainty.
I never said they are all legitimate. I don’t personally endorse mona-vie. I wouldn’t use the product personally and if I won’t use the product I can’t in good conscience sell it to others. People lose money in MLM because they don’t treat it as a business and because they don’t do their due diligence in evaluating the company. It’s like anything else. If you believe in the product, you believe in what you are doing, and you put in the time, you will succeed. Direct sales is a legitimate business model that is taught in Universities,
The people who bad mouth it usually are the ones who weren’t successful at it.
Lazy Man says
You may not have said that they are all legitimate, but you implied that MonaVie and others must be because Buffett bought into Pampered Chef (“Mona vie is not a pyramid scheme. It is a legitimate network marketing business. It offers products for sale. Network marketing is a legitimate business model. Warren Buffet owns pampered chef. Do you think he would have bought a pyramid scheme?”)
I simply wanted to establish that they all are not legit just because Buffett buys one. More importantly, there’s the issue of whether MonaVie is legitimate. In the article above I linked to my article (Here it is again) that showed that MonaVie is a pyramid scheme. Now if you want to show why MonaVie is not a pyramid scheme, I invite you to read that article and comment there.
While it may be true that the people who are usually against MLM weren’t successful at it, it doesn’t not mean that everyone against it was in MLM. I, for example, have not been involved in MLM. I don’t need to be. I can see that it is bad from the numbers where the failure rate is high. And it’s not due to those not working or treating it like a business or not doing their due diligence in evaluating the company as you suggest… it’s a mathematical certainty. It’s baked into the compensation plan of the 50-60 MLMs that I’ve looked at.
The other thing about those “bad mouthing” MLM (in your words) are those who weren’t successful at it, makes sense. Since it success rates can be 1 in 10,000 there are 9999 unsuccessful people who paid a few hundred dollars for a business opportunity that got them nothing. They SHOULD bad mouth it like a rigged carnival game. That one person who was fortunate enough to succeed isn’t going to bad mouth it, especially because his very success depends on him encouraging other to join.
As for MLM being taught in Universities, that article was clearly stretching. It is 2012 and I’m reading stuff like, “in a network marketing program it hopes to offer on campus in the year 2000.” Either it did or it didn’t. The article tries to represent a changing atmosphere for MLMs saying that it is in its infancy and that it isn’t well understood. Ironically it turns out that what Money Magazine said in 1987 still applies to what USA Today said in 2011. Twenty-five years and it still doesn’t work, because in practive the only replace a living income (5 figures a year after expenses) is to recruit hundreds or thousands of people and mathematically that isn’t a sustainable business model… you run out of people to recruit.
I think there’s more research in Buffy the Vampire Slayer being taught in Universities than your article provided (see also: http://staff.washington.edu/changed/496g/).
Please note that although getting and monioring your credit score on Credit Karma is free, they are in the business of sales: credit cards, loans, mortages, insurance, savings/checking accounts, you name it. And it’s a somewhat hard sell. The credit information is good and mostly accurate, but is hard to distinguish from the advertising.
In short, I use Credit Karma and like the information it provides, but have been careful and not taken any of their sales offers.
Lazy Man says
Yes, it’s true that Credit Karma is in business to make money. The offers are how they do that. Mint has a similar business model.
There are legit financial reasons why savings/checking accounts, insurance, etc exist and I don’t see anything wrong with them offering these to consumers. Of course if you are uncomfortable with the offers, you are under no obligation to take them. Just enjoy the free credit score and credit tips.
Ooh, I have so many small business ideas! I’m a small business owner too and I’m always thinking business! Anyway, you mentioned home made candles, I would assume you’re pretty knowledgeable about this industry already.
I would suggest you ask yourself why are you not able to make this profitable? Low sales? Why? Do you need to advertise more? Where? Low profit margin? Maybe find a new supplier with better prices?
I guess what I’m trying to say is, try to stick to something you know already. There will be a learning curve when you venture to an entirely new business.
Here’s an idea, seems like there are a lot of folks selling home made candles on Etsy. Where are they getting their supplies? Have you ever thought of selling supplies instead?
Here’s another one, have you thought of holding a class on how to make home made candles? I know our community center have all kinds of classes (sewing, jewelry making, gardening, zumba, etc).
How about writing an eBook on how to make candles?
I’m not interested in debating network marketing with you. It is clearly not for you and that’s ok. It’s not right for everyone. There are those for whom it is right. And it is a legitimate business model. There are plenty of corrupt traditional businesses out there as well. How about Enron, Bernie Madoff, and the sub-prime mortgage industry? How many poor souls were scammed into buying loans they couldn’t afford and have now lost their homes to foreclosures? It’s not for you. I get that. But don’t badmouth the industry as a whole just because you don’t believe in it. I will leave you with this post from the Association of Network Marketing Professionals (http://www.theanmp.org)
GREAT Post by Carolyn Samuels: I am truly saddened by the news of Zeek Rewards’ failure, especially for those of you who had hopes of obtaining your dreams there.
The Industry of Network Marketing is a Legitimate Global Business that has provided the means for thousands to realize their dreams and goals. The Direct Selling Association (DSA) shows U.S. direct sales totaled $29.87 Billion in 2011
and here are around 56 Million people in the entire world engaged in the network marketing industry.
It is a Proven Industry and is highly recommended by world leaders such as Warren Buffett, Robert Kiyosaki and many others. The Network Marketing Industry like any other industry, profession or field has rules and laws that must be followed. The same as doctors/lawyers and other professions, those who do not follow the rules will suffer the consequences, BUT THEIR WHOLE INDUSTRY IS NOT PUNISHED!
Network Marketing offers a way for you to realize your dreams, just make sure that the company you select is build on products and not on the people you bring in.
Former Zeek Rewards members, please do not let this failure stop you from believing!
Lazy Man says
If you are not interested in debating MLM (Note: don’t confuse MLM, Network Marketing, and Direct Selling), then why do you continue to do it?
The “MLM isn’t for everyone” is a common saying amongst MLM distributors. As a guest poster noted with MonaVie, or any MLM where recruiting is emphasized, losing money is not a matter of effort, it’s a mathematical certainty. With over 99% of people losing money, it’s really not worth everyone. Of course people who read my article, The Business of MLM (or What Gives Freddy Krueger Nightmares), know this.
Sure there are corrupt traditional businesses as well (Enron, Bernie Madoff, the whole sub-prime thing), but that defense is like a murder pointing to a serial killer and saying, “but that person killed multiple people.” Are you suggesting that investing in Enron or Bernie Madoff, and getting a sub-prime mortgage are for some people?
You claim that MLM is a legitimate business model. The FTC doesn’t necessarily agree: “Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It’s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products.”
At a minimum we must conclude that at least some MLMs are not legitimate. The FTC says (same link), “How can you tell the difference between a bona fide multilevel marketing plan and a pyramid scheme? According to the Federal Trade Commission, the nation’s consumer protection agency, it takes research, some business sense and a healthy share of skepticism.”
That’s where I come in to hand people the research about MLMs. I don’t have the time to research a thousand MLMs, but I have researched somewhere between 6-10 on this website, and each of them appear to be a pyramid scheme in addition to purposely misleading consumers about their products.
If you had been reading my site over the last couple of weeks, I had been writing about Zeek and bidding auctions. On the day, Zeek Rewards got shut down, I was going to write about it too was a pyramid scheme.
When an MLM proponent quote from the DSA, it just makes them look ignorant. The DSA is a special interest group that best described by the well-cited Wikipedia article: “On behalf of its members companies, the DSA engages in public relations and lobbying efforts against regulation of the multi-level marketing industry, and it funds political candidates through a political action committee… As of 1970, less than 5% of the DSA’s members were multi-level marketing companies. By 2009-2011, the DAS’s membership had grown to include nearly 200 companies, more than 90% of which were multi-level marketing companies.” It might as well be called the MLM Association as it has little to do with direct selling (such owners of Ebay stores).
In Myths from the Direct Selling Association (DSA), I compare what the DSA thinks is a pyramid scheme with what the FTC says is a pyramid scheme. I don’t have to badmouth the industry as a whole when its special interest group lies to consumers, by contradicting what the government’s consumer protection agency, the FTC says on the topic of pyramid schemes.
Buffett may have bought into the only legit one, Pampered Chef, which I wrote about here: Warren Buffett’s Pampered Chef and MonaVie. One legitimate MLM certainly doesn’t make them all or even a majority of them legitimate.
As for Kiyosaki, you clearly show your ignorance calling him a “world leader.” You need to educate yourself about him at this article: Robert Kiyosaki and Multi-Level Marketing Exposed!
HAHAHAHAH did you really try to defend Multi-Level Marketing with a post apologizing for yet another MLM to go under?!?!?!?
Lazy Man says
Evan, I envy your brevity.
I have already unsubscribed from your list. And take me off your email list. You are ignorant.
Lazy Man says
If you have unsubscribed from my list using the clear instructions at the bottom of every email (“Manage Your Subscription”), then there is nothing for me to take you off of.
I think my last comment demonstrated my expert knowledge of the MLM industry. I proved that I know more about pyramid schemes than the DSA.
You have proved nothing other than the fact that you are closed minded and ignorant.
Lazy Man says
More than three years ago I wrote about Being Open-Minded About MonaVie.
You seem to be programmed with the typical lines, “MLM isn’t for everyone”, “The DSA says [X]”, and “You are closed minded.” I think the next thing on the list is to call me a negative person or a dream stealer, but that might not work on a post such as this one.
I feel like you don’t know the meaning of ignorant. I think you can tell from LazyMan’s numerous posts on the subject ignorant is not a proper adjective to describe him.
I think where people get confused is they can’t tell the difference between companies like Pampered Chef, Scentsy and Passion Parties, where you actually sell products and the plethora of “nutritional supplement” MLMs that you sell the business not the product. I know this post is way late, but hopefully it will help the people that read this far but still too lazy to read your articles.
Lazy Man says
Even the ones that sell products can be problems. They get distributors to buy so much inventory. Mary Kay is one example: http://www.pinktruth.com/mary-kay-facts/mary-kay-destroying-women/.
Penn and Teller have a good documentary on Showtime’s BullSh!t called Easy Money that cover some of the product-based MLMs and they aren’t much better.