My journey from Absolute Zero to Passive Financial Freedom in 8 months

[RazorCut]

Ok, time for me to stick my head above the parapet and start my progress thread.

PLEDGE

- It is my intention is to produce a meaningful passive income by the end of June 2015.

The word meaningful will mean different things to different people but for me the definition in this case is that 'I will not need any other form of income to provide for my wife and family'.

My goals are:

• To be financially free – not needing to work to sustain a good standard of living

• To be able to live wherever I choose free from geographical constraints

• To be able to work as much or as little as I want in whatever field I so choose

I started with what I want my end game to look like as in the past I have built businesses that tied me down to sometimes long hours, fixed location and hardly any time off. Not smart moves. You need to start by looking at the journeys end and then set your course accordingly to get you there.

Because of current working constraints this passive income will have to be built solely on part time hours (just to add some pressure into the mix).

I hope my fellow fastlaners will come on this journey with me. I look forward to your support and advice, and together we will see where it leads. I know it will be a mix of fun, excitement, frustration and pain as that is what entrepreneurship is all about after all.

 

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[RazorCut]

History

First a little background. I have worked for myself since Feb 1996 (yeap, getting old now)

My first businesses were bricks and mortar, the last 4 have been internet based. The last two (e-commerce) I had been running for the past 6 years. As some will know, I have recently sold one of those businesses (the market has been in decline and I should have gotten out earlier but family commitments and the fear of the unknown prevented it).

The other business I recently resigned as a director as I wanted to distance myself from the negativity of my business partner. When two people cannot agree over fundamental ways to move forward it’s time to move on. Life is too short for stress and worry all the time and I have got too old to take shit from others. This has meant a lot of sacrifices in terms of time and money. I have gone from driving a £55,000 car to walking or using my motorcycle. I am now working longer hours for less money. However I don’t have the pains and stresses I once had and no money can compensate for that.

The Start of My New Life - How I got here

I could see issues coming a year or so ago so started researching the building of a ‘new life’ back in November 2013 by reading anything I thought relevant, either in book or blog format. I also listening to lots of podcasts. I spent my time studying successful entrepreneurs. Listening to other people’s opinions and sifting the wheat from the chaff. That journey eventually led me here (thanks MJ).

I had gone from knowing things needed to change to searching for a new path that took me to total information overload and consequently analysis paralysis.

The early days were hard and somewhat confusing. I ended up jumping from one idea to another to another trying to get my head around what path to take. It has taken just under 12 months for all the pieces to finally fall into place and to formulate a plan. Finally the dust has settled and things are now clear in my mind.

As I am owed money from one business that I am not sure when I will see I needed an income quickly in order to keep paying the bills. This means I am working 40-50 hours a week at the moment hence I have severe constraints on the time available to me. These constraints have helped fashion my road ahead.

How I intend to build my Passive Income

My chosen path is to design and develop new products. I currently have 3 ideas I want to work on during this period. Ideally I would aim to seek to licence 2 and if unsuccessful I will bring them to market myself. I expect to have the first 2 in place within the targeted 8 months and be partway through development of the third.

More information on these this evening.

 

[tafy]

Licencing is definately a good way to get passive income, good luck!

 

[RazorCut]

Thanks Tafy.

The Idea’s

1/ Impulse buy for the DIY/Construction market that will appeal to both the keen amateur and the professional alike.

2/ A kitchenware product that will work well in both the home and the office.

3/ An MP3/Phone accessory

I would love to share more details about each product but for obvious reasons I cannot at this stage.

I am starting with the product for the DIY market. I have purchased various components to prove proof of concept. Once I am happy with my crude Heath Robinson prototype I will get a CAD drawing made up and sent to a 3D Printing Company I have researched to have the components made up.

I know that Stephen Key is a great proponent of just sending an outline to a company with details of your idea but I feel a fully working sample would give me a much better chance of hooking a deal. Plus I need to prove that the concept will work as I expect and the only way to do that is to create one.

 

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[RazorCut]

Ok it's been some time since I updated this thread. Mainly due to the fact that I have been trading too much time for money and the components I sent away for initially proved unsuitable so I couldn't test my concept. However I sourced some alternative components that took several weeks to arrive, and after firing up the soldering iron yesterday morning, took the result to the workshop for a hands on test that proved a resounding success.

Now this product provides a solution to a pain point I noticed the craftsmen had while on site fitting cabinets in clients homes. It is also something that has irritated me many years ago both as a professional carpenter and joiner on site and also while working on my own home. However it is not something people automatically think 'I'll go out and get something to stop this issue' BUT if it was on the shelf next to the item that caused the issue in the first place I can see it selling very well as an impulse buy as it works as an optional extra and will fit a variety of brands regardless of their various designs and sizes.

Unfortunately it is very hard to validate with search term analysis as the product is unique in as far as there is nothing like it on the market so I am flying blind as to how it will be received in the marketplace.

If anyone has any ideas about validating something that is not currently available please give me your thoughts. When I do a targeted search all I get is nonsense or patent applications from the turn of the century (which just goes to show this has been a pain point for over 100 years).

Next step is to create the casing design in SketchUp and have it 3D printed. I've been having a play with SketchUp after a bit of tuition from a friend who spends all day drawing in Autocad and it seems quite easy to use once you get your head around how it operates. Would feel much happier if I could do it in Photoshop though.

 

[tafy]

If anyone has any ideas about validating something that is not currently available please give me your thoughts

Take a few prototypes down to the place where they sell tools and stuff like this, make sure its an independent place and not a chain. Ask them to put it on the shelf where you want it. They can either sell it for you or if someone wants to buy it they say sorry that its unavailable or something. Good luck and I hope it sells.

 

[RazorCut]

Take a few prototypes down to the place where they sell tools and stuff like this, make sure its an independent place and not a chain. Ask them to put it on the shelf where you want it. They can either sell it for you or if someone wants to buy it they say sorry that its unavailable or something. Good luck and I hope it sells.

Thanks Tafy, great minds must think alike as I have already thought about this.

There is a specialist tool shop about 8 miles away and I know the owner well. Was going to ask him his thoughts once I have a saleable looking sample and also if he would mind me having a chat with the customers that came in to gauge their response (which I'm sure he wouldn't). It's a great shop, very large and full to overflowing with tools and equipment. A real candy shop for trade and diyers. They also have show days where the big manufactures (DeWalt, Makita etc. etc.) come down and exhibit in the carpark.

I'm also on first name terms with the owners of a large specialist mail order company that supply the construction and joinery trade throughout the UK. So might be able to get them to stock it.

I had to go to a Screwfix store today so while I was there I collared the manager and asked her if they sold many of the tools my product would be associated with. She said loads of them. They are so popular they have several pages dedicated to them in their catalogue. So that bodes well.

Am currently on the fence as to whether to develop this product wholly myself or try to get it licensed. Maybe both. Supply the UK directly and see if I can licence overseas.

Am also thinking of maybe using Kickstarter as a validation tool and revenue creator.

 

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[smithsta]

@RazorCut So when you say licensing, do you mean you will own the rights to the product, have a 3d printing manufacturer create and sell it for you, and you receive a percentage of each sale?

Is there a reason why you're looking to license your products as opposed to creating and selling them yourself?

I'll be following this thread closely, Sounds like a route id like to go down In the future.

I actually had a close friend who is a carpenter fit several doors in the house last week. There were two occasions in particular I noticed him using traditional tools for other tasks which had me thinking if there are specific tools available or not. I think there is a tool available for one but can't find anything for the other.

Similarly to what you said about your product ideas, I don't think these will make people think 'I'll go out and get something to stop this' but it would probably sell well as an add on or impulse buy.

Anyway, good luck and if you fancy a chat or want to bounce ideas off each other then feel free to PM me.

 

[RazorCut]

Thanks for your interest @smithsta.

@RazorCut So when you say licensing, do you mean you will own the rights to the product, have a 3d printing manufacturer create and sell it for you, and you receive a percentage of each sale?

By licencing I have researched several tool manufacturers both in Europe and the USA who make the tool my idea revolves around. As they already have shelf space, POS, instore display stands etc. it would make sense to approach them to see if they would consider licensing the product (including manufacturer, distribution etc.). I would just get a royalty on units sold but would not have much input once the deal had been finalised. The reason for this is they have far more reach into this market sector than a newbie like me has so better a small part of a lot of sales then a large part of a potentially few sales.

If I decide not to go down the licencing route (or no company is interested in my offer) I will probably buy in the components (3D printing is fine for prototyping but is too slow and costly for general manufacture so 2 parts would have to be injection moulded and that is not cheap to set up). The rest I can buy as basic components. The electronics are pretty simple and aside from a little soldering (which could also be designed out of the product at a cost) then it would be just assembly.

Call me paranoid but I would prefer to control assembly locally rather than trust one Chinese company to manufacture for me (and possibly create the same product for others on the side, which I have seen happen before).

If I go it alone then Kickstarter or one of its clones would be my best route to market.

I actually had a close friend who is a carpenter fit several doors in the house last week. There were two occasions in particular I noticed him using traditional tools for other tasks which had me thinking if there are specific tools available or not. I think there is a tool available for one but can't find anything for the other.

Similarly to what you said about your product ideas, I don't think these will make people think 'I'll go out and get something to stop this' but it would probably sell well as an add on or impulse buy.

I think there is plenty of scope for DIY/Trade construction products. Tools in general is a market that we are happy to spend a lot of money on like make-up and handbags for women (not saying women don't drool over a bronze Lie Neison No 4 )

Veritas have been very successful in this niche.
http://www.veritastools.com/Products/Category.aspx

I'll be sure to PM you sometime soon.