Guest deepValue Posted January 18, 2013 Share Posted January 18, 2013 A good entrepreneur can make money doing just about anything. But one way to get ideas is to use a stock screener and sort companies by ROA, ROIC, etc to find high-return business models. Another way to do it is by running through a book like Walker's Manual of Penny Stocks and figuring out which companies you can replicate. Pretty much anything that isn't manufacturing or R&D-heavy is a possibility. You might look into making SBA-guaranteed loans; I'm not sure how much of your own capital you have to put at risk, though. Link to comment Share on other sites More sharing options...
netnet Posted January 18, 2013 Share Posted January 18, 2013 With little capital and all the energy of a youngster, I would follow the prescription of Ferriss's 4 Hour Work Week and the $100 Dollar Start-up, i.e. put together something that nets between 40 to 400k per year. THEN, I would either try to morph that business to something bigger or having kept my eye out for a larger enterprise I would execute on that. As a matter of fact, I have had a lot of push back on this very idea from my own 19 and 15 year old kids. So I think I am going to bet them that I can put such a business together (with them) that will be at a net 40K per year run rate within 6 months, with the caveat that it will be something they could do. Regarding the group 1 and group 2 in software, group 1's are really, really rare. And group 2's, like the reservoir modelling are not necessarily that small. Also, in group 1 you will need a team or at least a co-founder. In the smaller group 2 like ItaValueTrap's business you don't. (That by the way looks like a classic 4 Hour Work Week company. Itavaluetrap, How are you marketing it? Link to comment Share on other sites More sharing options...
ericd1 Posted January 19, 2013 Share Posted January 19, 2013 My 2c. I believe you should do something you really enjoy--perhaps a hobby. Then turn it into a business. You may become a supplier, manufacturer, wholesaler or sales rep for an industry player. Lots of opportunity. I've heard this advice from many sources and eventually followed the path and it worked well for me. The passion for what you are doing makes up for a lot of mistakes you might make. Link to comment Share on other sites More sharing options...
Palantir Posted January 19, 2013 Share Posted January 19, 2013 In all honesty I want to start the next twitter or instagram or the next great web startup and become Steve Jobs and Warren Buffett rolled into one. Lemme know if anybody has ideas. Seriously. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 19, 2013 Share Posted January 19, 2013 That by the way looks like a classic 4 Hour Work Week company. Itavaluetrap, How are you marketing it? I never really figured out how to market it well in the first place... virtually all of the money I have made is from licensing my technology/algorithms to one company. I never made much from selling plug-ins. Regarding the 4 hour work week... I can see how it could work but in practice I don't think it works out that way. Look at Tim Ferriss (the book's author for anybody who doesn't know). Does he really work 4 hours a week? You can view him as a full-time author/speaker. It's just that work and play are lumped together. 2- In a broader sense, most entrepreneurial ventures will reward you for working more hours. Conversely, competition will punish you for not working hard enough. Maybe it's better to tap dance to work- do work that you enjoy. It looks like even Tim Ferriss is doing that now. The alternative is really to make a huge amount of money at once and to live off that. Or, find a part-time job that pays really well. Like medical test subject. Link to comment Share on other sites More sharing options...
zippy1 Posted January 19, 2013 Share Posted January 19, 2013 I think a software company would be difficult. There are tons of software engineers that do freelance work for pretty cheap all over the world. You aren't competing against the local operator, you are competing against a Ph.D in India. If you know what you're doing, you can start a software company in the US and do the labour arbitrage between US and some BRIC country. You can simply connect American companies to cheaper offshore labour and collect the arbitrage (which can be significant). I am sure the above is true. Look at this guy's story, this guy outsourced his own job! Outsourced: Employee Sends Own Job To China; Surfs Web The Verizon team even found that "Bob" kept a regular schedule at his office: 9:00 a.m. – Arrive and surf Reddit for a couple of hours. Watch cat videos 11:30 a.m. – Take lunch 1:00 p.m. – Ebay time. 2:00 – ish p.m Facebook updates – LinkedIn 4:30 p.m. – End of day update e-mail to management. 5:00 p.m. – Go home And as they learned, his schedule also included sending less than one-fifth of his salary to the Chinese firm. Verizon's investigators say the evidence they uncovered suggests "Bob" might have had similar arrangements at several companies. http://www.npr.org/blogs/thetwo-way/2013/01/16/169528579/outsourced-employee-sends-own-job-to-china-surfs-web Link to comment Share on other sites More sharing options...
netnet Posted January 19, 2013 Share Posted January 19, 2013 Regarding the 4 hour work week... I can see how it could work but in practice I don't think it works out that way. Look at Tim Ferriss (the book's author for anybody who doesn't know). Does he really work 4 hours a week? You can view him as a full-time author/speaker. It's just that work and play are lumped together. Ferriss's book describes how to make ten's of thousands not millions. He clearly loves the attention and he is making way more money and he is enjoying it, which is his ultimate point. 2- In a broader sense, most entrepreneurial ventures will reward you for working more hours. Conversely, competition will punish you for not working hard enough. NO, NO, NO, as in investments, in capitalism generally there is no particular reward for working hard, there is only a reward for what the market wants to buy; the market neither cares how hard you worked nor how smart, able or good looking you are, unless that is what you are selling! (Now in a large enterprise looking like you are working hard is often rewarded, but that is an entirely different thing.) If the reward were for hard (and dirty) work, roofers would make more than all of us. And the dalit sweepers in charnel houses would make the most of all. Maybe it's better to tap dance to work- do work that you enjoy. It looks like even Tim Ferriss is doing that now. If the market pays for what you love to do, you have got it made! Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 19, 2013 Share Posted January 19, 2013 Don’t laugh! Part-time College/University Level teaching. Diversified revenue; day job in private industry, night job in government. Minimal expense. Minimal overhead - primarily depreciation of intellectual capital & technology. Minimal CAPEX (seminar every year), minimal business risk. Long investment horizon. Sharpe ratio through the roof. Synergies everywhere. Write & sell the textbook. Referral fees if your company hires a graduating student. Gen X community involvement looks good in the day job. Wider network generating your next job in 5-10 yrs! And if you happen to teach finance/investment … you essentially get paid to research your companies. Now if you start up & run a new business for 8 years? it takes 3 years just to break even, & runs another 2 years at around break even – which route is more likely to yield the higher return? Which was the lower risk? To earn enough to justify the risk, how much does the business have to net ... & when? Not such a dumb idea! Link to comment Share on other sites More sharing options...
Junto Posted January 19, 2013 Share Posted January 19, 2013 In all honesty I want to start the next twitter or instagram or the next great web startup and become Steve Jobs and Warren Buffett rolled into one. Lemme know if anybody has ideas. Seriously. +1, there is a lot of dreaming here and minimal ideas. Link to comment Share on other sites More sharing options...
mikazo Posted January 19, 2013 Share Posted January 19, 2013 In all honesty I want to start the next twitter or instagram or the next great web startup and become Steve Jobs and Warren Buffett rolled into one. Lemme know if anybody has ideas. Seriously. I'd love to be in on that sort of thing but it would require my full attention, and I can't really afford to not be working full-time at the stable job that I have now Link to comment Share on other sites More sharing options...
yp Posted January 19, 2013 Share Posted January 19, 2013 High-end day care center providing multiple language learning and academic instruction. High demand with many dual income families striving to put there kids on the right path. Probably $200K give or take to get going This sounds brilliant! Located in any major metropolitan area where such parents work, it seems like it would be a real hit! Parents who work in the area could drop off their kids right there and visit them during their lunch break or w/e. "High-end" would mean you could charge a fair bit and situate it in a nice location and hire the best of teachers. Hire instructors with degrees in early child development psychology, etc and use that as a major selling point and make such a Day-care into more of a brand than just a child care business. Awesome idea Kyle! I'm actually looking into doing some Small Business Marketing Consulting this summer instead of just getting a summer job (I'm still a student). I plan to approach small businesses and offer online marketing management services. I'm constantly using electronic social media (Facebook, twitter, etc.) and I think I'm somewhat versed in the field now. Also, I know the very basics of Search Engine Optimization which seems to me like it can be one of the greatest tools for small businesses. I could offer some help to small business owners on how to establish, enhance and profit from, a web presence. I won't need any capital for this kinda thing (not that I have any) which is why it would be perfect for me. Link to comment Share on other sites More sharing options...
LC Posted January 19, 2013 Share Posted January 19, 2013 http://www.reddit.com/r/EntrepreneurRideAlong/ This subreddit is a "ride along" with a entrepreneur who started a maid business in DC metro area. Turns out he copied the idea (the idea being a maid service optimized to sell/function on the web) from another guy, but his experience is very valuable to learn from. Link to comment Share on other sites More sharing options...
turar Posted January 19, 2013 Share Posted January 19, 2013 High-end day care center providing multiple language learning and academic instruction. High demand with many dual income families striving to put there kids on the right path. Probably $200K give or take to get going There's a company operating with a similar model in Canada, except they add an additional twist. They contract with big local employers to provide "drop-in" daycare service for employees as a benefit. Also, employees of contracted companies are automatically put on at the top of a waiting list, etc. So they have corporate revenue stream, and also charge a premium rate compared to other daycares in the surrounding area. It's pretty successful and is running locations in several cities across Canada: https://www.kidsandcompany.ca/ Link to comment Share on other sites More sharing options...
Palantir Posted January 19, 2013 Share Posted January 19, 2013 In all honesty I want to start the next twitter or instagram or the next great web startup and become Steve Jobs and Warren Buffett rolled into one. Lemme know if anybody has ideas. Seriously. +1, there is a lot of dreaming here and minimal ideas. Ha, I was not being sarcastic, I was 400% serious. I think that for these web startup type firms, the idea is not really that important, many of the ideas already exist....all about putting something really good together IMO. Link to comment Share on other sites More sharing options...
compoundinglife Posted January 19, 2013 Share Posted January 19, 2013 In all honesty I want to start the next twitter or instagram or the next great web startup and become Steve Jobs and Warren Buffett rolled into one. Lemme know if anybody has ideas. Seriously. +1, there is a lot of dreaming here and minimal ideas. Ha, I was not being sarcastic, I was 400% serious. I think that for these web startup type firms, the idea is not really that important, many of the ideas already exist....all about putting something really good together IMO. One common factor I have noticed among alot of the successful web start ups (successful does not always mean profitable in this context ) is the founders and key players have unrivalled passion about what they are doing. So while the idea itself does not have to be revolutionary, sincere passion and belief in the idea is IMO. Link to comment Share on other sites More sharing options...
Buffett_Groupie Posted January 19, 2013 Share Posted January 19, 2013 I started a small IT consulting firm based in Toronto in 1995 with me being the only employee with ZERO initial investment. Then I hired 6 staff in 1996 and grew to 45 in 1999 and again to 64 in 2002. Then down to 2 in 2003 after the tech crash when everything went to India overnight. Now I'm back up to 20 staff. As far as non-investment/service business is concerned, I can't think of anything more profitable than IT outsourcing regardless it's legal, accounting, medical, engineering services: no start-up cost and profitable from day 1 without a single month of negative cash-flow. If you know any better service business than that, I'm interested in finding it out from you. Link to comment Share on other sites More sharing options...
Aberhound Posted January 19, 2013 Share Posted January 19, 2013 You buy machines to insert herbs and spices into pills and offer a service to the chinese community etc. to take their herbs and encapsulate them. You then source high quality organic tumeric etc. a bring it in by the container and sell it by the bottle find out what formulations increase absorption and mix them in. Once you find out the top products that can be grown here you arrange contract organic growers and buy the output and sell it by the bottle. People are starting to realize pharmaceuticals often cause more harm than good. Link to comment Share on other sites More sharing options...
netnet Posted January 20, 2013 Share Posted January 20, 2013 Don’t laugh! Part-time College/University Level teaching. Diversified revenue; day job in private industry, night job in government. Minimal expense. Minimal overhead - primarily depreciation of intellectual capital & technology. \ I'm still laughing. :) Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 20, 2013 Share Posted January 20, 2013 We like to be balanced ;) ..... rabid capitalist by day, & foaming socialist by night. Always a little exciting - just before & after the flip between extremes! Link to comment Share on other sites More sharing options...
Palantir Posted January 20, 2013 Share Posted January 20, 2013 As far as non-investment/service business is concerned, I can't think of anything more profitable than IT outsourcing regardless it's legal, accounting, medical, engineering services: no start-up cost and profitable from day 1 without a single month of negative cash-flow. If you know any better service business than that, I'm interested in finding it out from you. This is why I love investing in IT firms. Low CapX, high switching costs, high FCFE. yummy. Link to comment Share on other sites More sharing options...
kapilm Posted January 20, 2013 Share Posted January 20, 2013 A 3-D printing related business geared towards possibly highered market...Printers are becoming cheaper/smaller like Cube from 3D Systems. Link to comment Share on other sites More sharing options...
Buffett_Groupie Posted January 21, 2013 Share Posted January 21, 2013 Simply identify something you can be good at, then repeat the process over and over for as long as you can until all the advantages run out! :-) Link to comment Share on other sites More sharing options...
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