Friday, January 1, 2010

How to Start a Business in 2010

I personally dare you to start a business this year. I dare you. Read on for two good ideas and one extremely important rule.

Warning: This blog post is not funny. It does not contain any jokes or humorous anecdotes. It is actually quite boring and very long. However, it contains the most important rule of starting a business, and provides two good business ideas. One that I've tried, another that I haven't.

How to start a business in 2010

The Rule: The best way to start a business is to start with as little risk as possible. Thats the most important rule. If you have a lot of money already, you probably don't need to be reading a blog about how to make a dollar. If you are a normal person who is afraid of the economy and wants to get started on a side business, then this is for you. The key, again, is to risk as little as possible at first. That's the most important rule. Don't risk anything at first. This gives you the freedom to try lots of ideas without the possibility of losing.

Thats because people who are just starting out are prone to making mistakes. Better that the mistake not cost you very much.

Idea 1: Snow Shoveling
When I was in college I was out of money. Completely out. All I had was a willingness to make money, and a little bit of time. I also had snow. So I found a snow shovel for $9.99 (which I needed anyway) and walked around town (my car was out of gas, and I had no more money after buying the shovel) looking for driveways that needed to be shoveled. I made over $100 that day. I risked $10, and made $90 in profit. I was happy with that, and I did it again the next two times it snowed. I made good money and then quit. Thats one way to do it.

But that was when I was in college. I had no intention of starting an actual business back then, so I just kept the money and did whatever I wanted with it.

Lets say you want to actually start this as a business and make it work long-term. Well, then you don't want to just keep the money. You want to reinvest it. Think about it. You now have $100.00. What can you do with $100 to help promote your business? Well, you can make an ad on a sheet of paper and make about 100 copies of it for about $20.00. and you can make about 100 business cards for another $10. Then you can go stick the ad in people's doorways and leave your card with anyone you bump into. Be friendly, and start in the same neighborhood that you've already worked. This way you can tell people that you already shoveled out their neighbors, and they will trust you more. Don't spend all $100 on advertising. You don't know how effective it will be, and you don't want to lose all of it. Again: don't risk any more than you have to.

Now you've advertised to 100 new potential customers for only about $30.00. Keep the other $70 in case you need to try a different advertising approach, or save it for the eventual purchase of a snow blower or plow.

Every penny that you earn should either be spent on expanding your business or should be saved for the purpose of buying better equipment in the future. I made $100 in one day, starting from nothing. No list of clients, no advertising. Nothing. I spent more time trying to find customers that actually shoveling. But after the first day I had a list of clients, and I didn't need to walk all over town again.

If you can get five or six snowstorms in your region, then you should easily make enough to buy a snow blower, which will allow you to work twice as fast. This in turn, will allow you to expand into new neighborhoods and eventually, to buy a plow. All of this with no money out of your pocket.

The point is to only spend money that you have already earned. Do not spend your own personal savings, or your paycheck from your regular job. Do not go into debt under any circumstances. Only expand your business when it has already earned enough to pay for the expansion in cash. This way you can never lose.

Shoveling is a seasonal job that can only be done by people who are able to work outside in the cold for a long time. What about an easier, year-round job?

Idea 2: How about baking cookies?
Here's how I would do it:
1. Get a big cookie mix from Costco or Sams or some place like that. Cost: $10
2. Get a silver dollar coin Cost: $24 (silver "dollars" are actually worth about $24)
3. Make ten batches of ten cookies, and mix the silver dollar into one of the cookies. (wash it first)
4. Put them in airtight ziplock freezer bags (or any other airtight contraption that will keep them from getting stale) Cost: $2
Total Cost: $36.00
Sell the homemade cookies on Ebay, and explain that there are ten batches, one of which contains a $24 piece of silver. Start bids at $10.00 each.

Assuming you can sell all ten batches, you will make a $64.00 profit. Many people will be willing to pay $10 for the cookies because at the very least they will still get a batch of homemade cookies. They don't risk much, so they won't mind trying it. It shouldn't take you more than an hour and half to make 100 cookies.

If you can do this once a week, you'll make $3,328 in a year. Obviously you could do this with any kind of prize. I think a silver dollar would work because they are small, valuable, and would not be damaged by being baked into a cookie. However, you could use just about anything that meets these criteria.

Invest your earnings back into your company and try to expand into other baking-related markets, or save your earnings and use them to start a completely different business that has a higher entry cost. Again: Don't risk anything that your business has not already earned.

The slogan of this blog is "Millions of ways to make a dollar." We believe that your first business idea probably won't make you a millionaire, and it probably won't even replace your day job. However, an extra stream of income every month can really add up, and can give you a little bit more leeway if your company cuts wages, or if your taxes go up. If you keep working at it, and if you try lots of ideas, you may stumble on one that can grow into something much bigger.

Throughout this year we will be posting various business ideas to help inspire you and to help you think creatively. Many of them will probably be goofy, and we can't promise that they will all work, but if you can just make one dollar, we will consider it a success.
I personally dare you to try a business in 2010. If you follow the rule in this post you won't have anything at risk. Give it a try. If you don't risk anything then you can't lose, so there is no reason not to try. 

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