Profitable Ideas

-Owning a business is much like rearing a child and demands as much if not more attention. Sacrifices are common.

-It takes much more money to start a business and to operate it than we ever anticipated. A growing business always needs food to grow. The bigger it gets, the more needs it has.

-There is no easy money, regardless of the "get rich quick" assumptions made in infomercials and other easy start up business opportunities.

-To go into business to get rich is missing the mark. Many business owners aren't rich, quite the opposite. Contrary to popular opinion, high debt is all to common in business. If it weren't for bank lines of credit and loans, many businesses wouldn't finish the race.

-Maintain control of your cash flow by taking control of when your shipments come in by utilizing "ship dates." Put "cancel dates" on your orders so your not surprised by late seasonal shipments or orders you didn't plan on.

-Don't turn your business over to someone else to run. It's not your business anymore.

-You can't get emotionally tied to your products or you won't mark them down if they don't sell. Dead inventory can be a poison pill.

-The retail price of your product should be based on perceived value, not your cost.

-20% of your products will make you 80% of your profits. That's a true fact.

-The days of opening a store and expecting customers to walk in is over. Marketing and advertising are the lifeblood to every successful business. If you can't afford to spend money on marketing and advertising, then do yourself a favor and consider whether you are really profitable.

-Craft malls can give you a start, but have they have their limitations.

-Product diversification is critical.

-Collecting your customers names and addresses is very powerful and will serve as your best and most profitable list you will every have.

-COD is too expensive and should almost never be used. The best retail buyers don't do it?

-Always give your customer an incentive to buy more. Utilize vertical pricing. Example, $4.99 or 4 for $4.50 each. Many times a customer will buy more to save.

-Duplicate a concept that works, over and over again until you can't properly manage it or it is no longer profitable.

-Stay light on inventory until late summer. Increase gradually, peak around Thanksgiving. Be ready to start reducing inventory by mid December.

-Buy in cases when the discount justifies it and you can burn through the product quickly. The discount needs to be a minimum of 10% or just keep your cash.

-A good supplier is invaluable. A great one can make you serious money.

-Ask your supplier for ideas. They talk to retailers from all parts of the country on a daily basis.

-Spend your time marketing your business, not making your product.

-We are in a global economy and have been for over a decade.

-Be careful not to specialize to the point of limiting your profits. Your goal is to find product that generates cash flow. If you don't finish the race, was it really that important how your uniform was sewn?

-If you want to learn to be a carpenter, learn from a carpenter.

-There is enough business to go around for everyone.

-Talking negative about your competitors doesn't really make sense, it only reflects negatively on you.

-You can be proud of your work and your business without excluding others from the game.

-Unfortunately, many gift shops aren't profitable; but the majority of them could be by applying basic business principles.

-The backbone of great businesses is superior marketing and advertising efforts.

-One of the biggest mistakes many new businesses owners make is taking money out of the business before its time. In our first business, we reinvested almost all of the cash flow for the first 3 years. Draining a business of its capital prematurely, can bring about a quick death.

-A good rule of thumb to figure out how much in sales is necessary to generate a desired income is to take 10% of gross sales (this is for "product" business-"service" businesses are different). If you want take out $30,000 in salary, then you must generate $300,000 in sales.

-You must spend money to make money. There is really no way around it.

-Keep clean and honest records. It will make your business much easier to sell.

-Be careful not to sign long leases. Landlords love to get you to sign 3-5 year leases. Ideally, if you are starting a new business, negotiate for a 6 month or 1 year lease at the most with an option to renew for the same period.

-Building rental rates are negotiable.

-Many small business owners don't sell their business for what they are worth. They typically believe it is only worth the value of its assets. Although assets have value, the worth of a business lies in its ability to generate cash flow. A popular rule of thumb is a business is worth 1-2 times its net cash flow; 1.5 times net cash flow is typical. So if a business nets $25,000, then it can list for $37,500.

-Only buy the assets of a business, never the liabilities.

-In a business we no longer own, we had $1,000 stolen out of our safe while on a business trip. No signs of break in or forced entry.