The Easy Way To Start a Profitable Business

To paraphrase Chef Gusteau in Ratatouille, "Anyone can start a business, but only the fearless can be great."  Fear is the great debilitating voice in our heads.  There is no reason to have fear, yet we all do.

Starting a profitable business is very different than starting a business.  Starting a business is simply buying something to sell or getting paid for your services without being an employee.  Starting a profitable business means that you are able to earn your living from your business, and for most people it also means that your "living" from the business is better than it was with your "job".

So is there an easy way to know if your business will be profitable?   Many restaurants go through two or three different variations at a single location before they become profitable.  Most small businesses that offer professional services take years to really make money.  My CPA started a bookkeeping firm.  It isn't making the momentum he had hoped for.

Starting any business that is going to be successful and profitable, requires one simple thing.  Customers who are willing to pay enough that you make money.  While this sounds easy, it is amazing how many people start a business thinking that they had enough customers.

In the retail world, you might make a profit simply based on product and location.  A well placed mall shop or cart with a unique product at the right price might do well.  For a while that is.  Once the copycats show up, the business might be in trouble.

For every other business, the success out of the chute depends on one thing.  The people in your rolodex or contact list.  Keller-Williams has every new agent enrolled in Bold! training call every single person and announce that they are in real estate and ask if they know of anyone who might be in the market to buy, sell or invest in real estate.  My bet is 50% or less actually do it.  The question is why and the answer is a form of fear.

When I added my Real Estate license on Facebook, I got a few sneers about being a Real Estate Agent.  I didn't have any fear about it so I did it.  So what if they make fun of you for starting your new business.  If you can't tell all of your contacts about it, how are you going to sell complete strangers.

The truth is that I buy real estate as my retirement investment.  I like real estate income as much as the dividends from great stocks.  I have a license because agents were reluctant to make the offers I wanted to make.  Why?  Fear.  You might label it other things, like lack of self esteem, or self image or whatever.  It comes down to a fear of being accepted for trying to be different than who you are now.  Step one, get over it, fear is what keeps you down, not "the man".

An interesting conversation a couple of days ago got me thinking about this.  Two men told me they tried "flipping" houses and couldn't make any money.  There just wasn't enough margin to make a profit they said.  The way they buy houses, they were right.  Being an agent, I have better access to "wholesale" deals and occasionally help other people when they ask.  No matter what I said to these two guys, fear was telling them making money in Real Estate can't be done.   My deals are "anomalies" and I am "lucky" were the responses I get.

If you want to start a profitable business, look at your contact list.  How many of those people will buy from you and why?  How many of them won't and why not?  Looking at these guys, they would buy a house, clean it up and try to sell it.  Did they even try to sell to friends as an investment or rental?  Nope.

This little review will be your first clue of how your business might do.

When I started business that became my biggest "lesson" (some would call it a failure), I didn't follow this simple review.  All of my friends bought stuff from the business, but only at a significant discount.  They wouldn't buy at retail, in fact many times I was lucky to cover shipping.  That was my first sign the business was off to a rocky start.  I was lucky to get away from that one.

If you want to start a profitable business make sure your contact list will buy from you, and buy at a big profit so you can pay your bills and grow the business.  If your list will buy from you, chances are your business is off to a good start and your list will start growing as they refer their friends.