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WJK

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What is a trust deeds business? It sounds interesting.
You need to know the following to make sense of what I do:
Trust deeds are a lien that a lender (bank) puts on real property to secure their loan -- sometimes incorrectly called a mortgage. Sometimes private parties "carry the paper" on a property they sell by creating and recording a trust deed. Other private parties loan money on real property secured by a note and trust deed -- which is known in the RE business as "hard money lending". The trust deed is the written agreement that is recorded against the title of the real property.

What I do is I identify trust deeds held by private parties. I make them cash offers to buy their trust deed at a discount. They assign their interest to me. I collect the payments from the person who "owns" the property until I am paid off. I'm basically acting as a bank financing the property. I only buy 1st trust deeds -- no seconds. I go through a formal escrow and I get title insurance each and every transaction. Sometimes I must foreclose and take back the property.

The reason that I'm successful at this business is that I started in real estate 44 years ago. I am a licensed RE appraiser and I was a broker for 30 years. Yes, sometimes I have made mistakes, but that is rare. And I can usually make a corrective move to fix problems. My odds of making good deals on the right types of property are very high. I'm like a good bird dog. I sniff out my deals.

Here's an example. I bought a trust deed 4.5 years ago on a little cabin for $15,000 cash. I have received small monthly payments. One of the "owners" is having problems with the other "owner", so he's asked to buy my note and trust deed. The face amount (amount currently owed), including interest, is $14,000 (RD). So, I'm selling it to the guy for $14,000. I've made $8,000 (RD) over the last 4.5 years from both face interest and imputed interest from this little trust deed.

It's a business that takes both cash and expertise. It also takes a lot of time to run down the prospects and then contact them. I get lots of no's and then those few golden yes's.
Have I told you more than you wanna know?
 

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Conscripted

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You need to know the following to make sense of what I do:
Trust deeds are a lien that a lender (bank) puts on real property to secure their loan -- sometimes incorrectly called a mortgage. Sometimes private parties "carry the paper" on a property they sell by creating and recording a trust deed. Other private parties loan money on real property secured by a note and trust deed -- which is known in the RE business as "hard money lending". The trust deed is the written agreement that is recorded against the title of the real property.

What I do is I identify trust deeds held by private parties. I make them cash offers to buy their trust deed at a discount. They assign their interest to me. I collect the payments from the person who "owns" the property until I am paid off. I'm basically acting as a bank financing the property. I only buy 1st trust deeds -- no seconds. I go through a formal escrow and I get title insurance each and every transaction. Sometimes I must foreclose and take back the property.

The reason that I'm successful at this business is that I started in real estate 44 years ago. I am a licensed RE appraiser and I was a broker for 30 years. Yes, sometimes I have made mistakes, but that is rare. And I can usually make a corrective move to fix problems. My odds of making good deals on the right types of property are very high. I'm like a good bird dog. I sniff out my deals.

Here's an example. I bought a trust deed 4.5 years ago on a little cabin for $15,000 cash. I have received small monthly payments. One of the "owners" is having problems with the other "owner", so he's asked to buy my note and trust deed. The face amount (amount currently owed), including interest, is $14,000 (RD). So, I'm selling it to the guy for $14,000. I've made $8,000 (RD) over the last 4.5 years from both face interest and imputed interest from this little trust deed.

It's a business that takes both cash and expertise. It also takes a lot of time to run down the prospects and then contact them. I get lots of no's and then those few golden yes's.
Have I told you more than you wanna know?
Thank you for taking the time to provide such a detailed answer. I started reading about realestate last year. I've read your response a couple of times now and I think I understand most of it. Please let me know if I got something wrong.

The properties don't belong to you but their control does. If the owner does not pay what they owe then you can foreclose on them and then you will own the property. This is why you only take the first position. You don't want anyone else to have a stronger position.

Your profit comes in purchasing the trust deed at a price that is lower than it's face value and collect what is due. I assume the person who sells the deed is either distressed in some way or wanting to minimize their risks.

How did I do?
 

WJK

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Thank you for taking the time to provide such a detailed answer. I started reading about realestate last year. I've read your response a couple of times now and I think I understand most of it. Please let me know if I got something wrong.

The properties don't belong to you but their control does. If the owner does not pay what they owe then you can foreclose on them and then you will own the property. This is why you only take the first position. You don't want anyone else to have a stronger position.

Your profit comes in purchasing the trust deed at a price that is lower than it's face value and collect what is due. I assume the person who sells the deed is either distressed in some way or wanting to minimize their risks.

How did I do?
You done good!

I'm in the same position as a bank. The "owner" owns the naked title. You right. If they don't pay, I foreclose and take over the property. And yes, I only buy first trust deeds because I don't want to make payments on a senior loan while that loan forecloses. I'm very quick -- some lenders are very slow. If they foreclose on a senior loan without me intervening, I loose my whole nut. I get wiped out -- or I cash out that senior TD.

As far as the reason for those who sell their TDs -- sometimes they are distressed. BUT, the RE lending market does not cover all classes and types of properties and borrowers. And the lending levels, LTVs (loan to value ratios) are different for different classes of properties and borrowers. Properties that sell for all cash generally sell at a discount when financing cannot be obtained. So, sellers "carry the paper" so they can find a buyer and get their price. Over time, they may need their cash for one reason or another. Or sometimes I have bought TDs through escrow as part of the deal between the seller and the buyer, in a concurrent escrow. I don't generally do it that way because the TD isn't "seasoned" -- the buy hasn't proved over a period of time that they can make the payments. It must be a "stud-card-deal" for me to do that.

My profits come from two places -- the "face" interest of the note & TD and the difference between what I paid for the note & TD, and the normal amortization schedule. That difference is known as imputed interest. And I've had situations where the buyer purchases the property on private TD and then refinances it through a bank, which pays me off quickly.

Banks buy and sell TDs all the time. I used to do a lot of consulting for banks concerning balancing their loan portfolios (having the right mix of properties and seasoning) and evaluating loans that they wanted to buy or sell. They paid me a lot of money for my expertise. Now I use that knowledge for myself on a much smaller scale. Now I'm just a silly little girl out buying my little TDs for the fun of making the deals -- or, that's how I tell it!
 

Conscripted

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What I do is I identify trust deeds held by private parties. I make them cash offers to buy their trust deed at a discount. They assign their interest to me. I collect the payments from the person who "owns" the property until I am paid off. I'm basically acting as a bank financing the property. I only buy 1st trust deeds -- no seconds. I go through a formal escrow and I get title insurance each and every transaction. Sometimes I must foreclose and take back the property.

What happens when the "owner" doesn't pay their taxes? Can't you lose the property even though you own the first TD?
 

WJK

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What happens when the "owner" doesn't pay their taxes? Can't you lose the property even though you own the first TD?
I step in and pay the taxes -- send them a bill -- and foreclose IF they don't pay up. In my area, it takes 5 years of unpaid taxes for the taxing agency to take the property. I check each year if they have paid their taxes. I am an "also named" on their hazard insurance. It's all covered in the TD. I usually start by sending the borrower a letter or I make a phone call. Normally, the borrower is cooperative since they too don't want to lose the property to taxes or a hazard.
FYI -- We've been having civil unrest. I lost a lot of money when we had riots in Los Angeles years ago. Did you know that almost all fire insurance doesn't cover losses due to civil unrest...
 

YoungPadawan

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I am in Singapore. The huge opportunity for young business people here, which I believes applies for U.S. as well is to take over the business of baby boomers who have no successors. It is HUGE! Almost all of them are in the unsexy business fields.

Why on earth would you want to start a business form scratch and in the best case make you 8-10k a month two years later, when you can learn the rope from a mentor who is not short of money and wants the business to have a successor largely for legacy and emotional reason, and you can take over a business that is currently making 20k a month.

Traditional business
-wholesale and distributing of b2b industrial products. (Lots of small shops in industrial parks)
-Funeral business (lots of money with aging population). My corp banking friend says these business had the largest pile of cash in their acc.
-Construction/Raw material
-self employed sales people in Real estate, insurance and stocks brokers who want to pads their client base to a young person

...many many more I believe.

The common thing is their children have ZERO interest in the business.

They are looking for successors for non monetary reasons mainly. They want to be responsible to their clients. They want to see their handwork and legacy not going to waste. They want to groom a hungry young man/woman. Their business, is too small to generate interest to the Private equity community.

You are their only chance.
Spot on. That is my current plan to aquire more farmland. Many of the younger generation move away and don't have any interest in farming. So the land that the farmer owns will be rented out... Hopefully to me.
 

Walter Hay

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. SAVE YOUR MONEY!!! and save some more. Over time you can put together a pile of "strutting money" to fund a side business. Run lean and mean. Debt is the number 1 enemy of getting ahead. I think of debt like quicksand. It will bury faster than you work your way out of it.
I am very pleased to read this. I have always avoided debt in my business ventures. Originally I had to live very frugally, but the big profits started to roll in quickly and I was able to put a lot of that aside to fund growth.

The Book of Proverbs (one of the Bible's Wisdom Books) says "The borrower is servant to the lender."

Walter
 

WJK

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I am very pleased to read this. I have always avoided debt in my business ventures. Originally I had to live very frugally, but the big profits started to roll in quickly and I was able to put a lot of that aside to fund growth.

The Book of Proverbs (one of the Bible's Wisdom Books) says "The borrower is servant to the lender."

Walter
Sometimes one must go borrow some working capital. BUT, the path out of that debt can bury you and your business quickly. Living frugally becomes a life-long habit -- that will serve you well even when you do have that pile of money under your mattress.
 

Wisith

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Love the thread, fellas. I'm reading from the start and taking a pause at page 4-5 to reply. I still hold a day job because it's fun to me and I schedule my own meetings with my clients. Many of whom are in the industries listed here. So I do risk management consulting for a workers comp insurance company.
People often think of blue collar trades like plumbing, drywall, HVAC, concrete work, etc. and don't associate millions. I see these companies' payrolls and they are making good money. Hell, seasoned crane operators are making $60+ an hour!
I live in the state of CA where the laws are very on the employee side, which means anyone can allege anything. If you guys are scaling your company, PLEASE invest in pre-hiring processes like pre physical, pre drug, background, references, etc. You want to make sure you hire high quality employees that won't screw you. I cringe when I have my small time contractors expanding from 15 employees to 90 employees quickly because they won a bid for a big project.
This situation is not uncommon: employee A has a cousin who got with an attorney to falsify a workers comp claim against his employer. They settled for $10k, and the cousin got several thousands. The attorney is now telling the cousin to spread the word so he tells employee A and employee A is telling his coworkers. Now there are 4 litigated claims at your company. As a result, your insurance rate jumps 2x and you have to lay off some employees to make ends meet. I've seen this story done many times.
Always happy to help my friends here. If anyone has a company and want tips or help developing safety programs (injury & illness prevention plan, fall protection, lock out tag out, etc)....just message me. I still do this because I want to make sure the employees go home with 10 fingers and 10 toes :)
 

Wisith

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Anyone do fence repair?

Last time a bad storm came through, several of our fence panels came down.

We put in a work order to have them fixed. Cost like $160 and the guy came out and did it in about half an hour. I also saw a bunch of neighboring houses with fence panels down too.

I dunno what these guys do for work the rest of the time. Maybe fence installation if I had to guess. Or maybe fence repair is enough? Either way, seems like it could be a good offline business.
One of my painting client does this. The guy moved to the US in the 80s and just started painting. He lived in his car for a while, eventually worked his way up to buying a van and doing it on his own on weekends and grew the company. His payroll is about $5M now. Their USP is they paint exterior of large HOAs, but also do fence repairs and repainting. Other competitors won't do this, and it's a pain for the HOA to have multiple companies do the repair then repaint. He said this was how he thrived in 2008 to early 2010 years.
 

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GradyS

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So could any of these unsexy type businesses be run during off hours (5pm-midnight)?

I feel like most require in person work, which (unless it's an emergency) is done during normal working business hours. Just curious.
 

WJK

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So could any of these unsexy type businesses be run during off hours (5pm-midnight)?

I feel like most require in person work, which (unless it's an emergency) is done during normal working business hours. Just curious.
There's a lot of "unsexy" type of business that must be run at night. I open my self-service Laundromat on my way to my office each morning. Then, during the summers, we close and clean it at 10 PM. During the winter, it's 8 PM. Our joke is that it's my minimum wage job that only takes me 45 minutes' worth of work to earn a day's pay. It is a 365 day a year business though -- even on Christmas -- even on my birthday. I think of it as a daily chore -- like brushing my teeth.

A lot of cleaning services are done at night. Patrol services are done 24/7 -- but, heavier at night. I do my bookkeeping for my trust deed business at night in my easy chair. You can do a lot of interior rehab jobs on properties at night. Thinking about computer work like coding.
Choose something that you can do in your spare hours.
 

Wisith

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So could any of these unsexy type businesses be run during off hours (5pm-midnight)?

I feel like most require in person work, which (unless it's an emergency) is done during normal working business hours. Just curious.
Absolutely. (In a non pandemic situation), go to your local Apple store at night, and there's a good chance you'll see a cleaning crew. A lot of cleaning and maintenance is done off hours to reduce the interference of business operation.

A client of mine paid us almost $1M a year in workers' comp insurance. By the look of his 'office', you wouldn't even think it's in operation. The office is big enough to house a couple of office workers. The rest of the operations are out in the field. He has contracts with airports and various shopping centers to clean and service them at night. Employees drive from their homes to the designated spots. Cleaning supplies are already housed there so employees would just retrieve and use to clean. Once done, they would go home.

We eventually got off the account because even though we were getting paid $1M a year, we were spending more than that on their losses. This is a headache that I've been trying to solve for years in the state of CA. Because the client needs bodies to clean during grave yard hours and the pay is almost minimum wage, they basically hire anyone with a pulse. The vetting process is out the window. The turnover rate is high because of this. As a result, a lot of litigation happens on the way out when they leave the company.
For anyone not familiar with workers compensation, it's different state by state. But in CA, your employees can allege anything since the employer is to provide a safe workplace. Attorneys caught on to the game and run ads to target these types of employees. They'll settle for "only" $15-20k each. But it adds up since the turnover rate is high.

I am really curious to see how the blue collar industries shape up in the next decade or so. Many of my clients, be it plumbing, HVAC, hardscape, etc. rarely have anyone under 25 working for them. A lot are older, and at that point they're foremen or superintendents. For tougher trades such as masonry, it's common for a young worker just to never come back after his lunch break on the first day due to how labor intensive it is. And you can't outsource the need to build new buildings, repair pipes, etc.
 

Trenzui

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Something that cannot be stressed enough on the Fastlane forum is that people would be better off pursuing businesses in UNSEXY industries. Industries that FEW people are talking about because they are boring, unpopular, or possibly even unlikely to be discussed among the general public, and etc..

This is a good thing.

Many entrepeneurs don't want to run an UNSEXY business!!!!!!!

Nobody wants to run a fish cannery in the middle of the alaskan wilderness. Most aspiring entrepreneurs don't dream about collecting debt from strangers over the phone. And they definitely don't want to become chimney cleaners.

Again... this is actually a very very good thing. For the chimney cleaner, the cannery owner, and the debt collector who ignored every other entrepreneurs advise and did the exact opposite of Amazon FBA, Dropshipping, and Upwork Freelancing. Not everything has to be an online business you guys!

Why spend thousands of dollars marketing your oversaturated supplement in an extremely difficult market where every other personal trainer is selling the same thing that nobody will remember in 10 years? Especially if you can just open up a slaughterhouse and master the process and have customers come to you after barely even marketing your business in the last 5 years.

It may be gross and disgusting to witness animals being butchered up into pieces. But it's not your fault that the majority of people like eating animals. It's also not difficult to persuade someone to buy something if he already knows he needs it.

THIS IS WHY WE NEED TO TALK ABOUT UNSEXY BUSINESSES MORE OFTEN. BY CREATING THIS THREAD WHAT I AM DOING IS BUILDING AN ECHO CHAMBER WHERE WE CAN BRAINSTORM AND DISCUSS AS MANY UNSEXY BUSINESS IDEAS AS WE CAN POSSIBLY THINK OF!!!!!!!!!!!!!!

If you don't have a business idea yet I want you to be mumbling the words, "think UNSEXY" until you find it.

In fact, I'll even give you a list of 100 random UNSEXY business ideas that may or may not interest you:

- Agricultural/Fish&Livestock related:
1. Bamboo Nursery
2. Mushroom Cultivation ( this is my current niche. In january I started a small farm in my basement. there is little competition but a very high barrier of entry)
3. Garlic Farming
4. Beekeeping
5. Spice Production
6. Deep Sea Crab Fishing
7. Worm Farming
8. Lavender Farming
9. Tree Seed Supply
10. Seafood Cannery
11. Wool Production
12. Fish Farming
13. Cricket Farming
14. Nut Processing
15. Exotic Animal Breeding/Trading
16. Pineapple Plantation
17. Truffle Tree Planting
18. Agricultural Vehicles (such as Tractors )
19. Rubber Plantation
20. Pig Farming
21. Carrot Cultivation
22. Cattle Ranch
23. Slaughterhouse
24. Palm Oil Plantation
25. Sugar Cane Plantation
26. Dairy Farm
27. Onion Farming
28. Florist Business
29. Livestock Feed Production
30. Flour Milling

-Blue Collar Trades, Manual Labor & Manufacturing:
31. Construction Business
32. Plumbing Business
33. Electrician Business
34. HVAC Business
35. Waste Management
36. Garbarge Collection
37. Manure/Fertilizer manufacturing plant
38. Auto Glass Repair Shop
39. Auto Body Repair Shop
40. Laundry detergent/Cleaning chemical manufacturing
41. Medical Equipment (wheel chairs, hospital beds...)
42. Recycling Industry
43. Scrap yard
44. Pest Control
45. Painting Company
46. Landscaping
47. Chimney Cleaning
48. Carpet Cleaning
49. Crime Scene Cleanup
50. Graffiti Removal
51. Mining Industry
52. Any other type of natural resource extraction
53. Lawn Care
54. The RV Industry
55. Machine Shop
56. Aluminum Door Window Fabrication
57. Candle Making
58. Ginger Oil Manufacturing
59. Iodized Salt Manufacturing
60. Noodles Manufacturing
61. Rubber Band Manufacturing
62. Bread Making
63. Disposable paper plates/plastic cups manufacturing
64. Baking Powder Manufacturing
65. Woodworking
66. Granite Counter-top Installation Business
67. Cabinet Manufacturing


- RANDOM MISCELLANEOUS:
68. Debt Collection
69. Vending Machines
70. Blood/Sperm/Hair/Sperm other legal body part donation center
71. Self Storage Units
72. Hair Wig making
73. Head Lice Removal
74. The Funeral Industry
75. Acne Reduction Creams
76. Security Guard Service
77. English Teaching Abroad Agency
78. Drivers Ed School
79. Pawn Shop?? Maybe Payday Lending??
80. Pet food; not necessarily for dogs but also other pets such as Parrots, Turtles, and Hamsters...
81. Foreskin Restoration Devices; I dare you to google this
82. Porta-Potty Rental
83. Sex Doll Brothel; I threw up in my mouth a little bit but there are a lot of lonely guys out there.
84. Airplane Repossession
85. Accounting Firm
86. Insurance Agency
87. Power Washing
88. Caring for the elderly; people are getting older.
89. Wholesale Distributor
90. Medical Transcription Services
91. Biotechnology Lab
92. Personal Assistant
93. Other types of cleaning business/janitorial services
94. Concrete Pouring
95. Bricklaying
96. Franchising
97. Healthcare Industry
98. Anything I didn't already mention that was on Mike Rowe's "Dirty Jobs"
99. If you are in a business with high barrier of entry you could offer consultation for a big price!
100. Selling "shovels" (accessories, equipment, add-ons, extensions, necessary components) to any industry that's ever existed including the ones I just listed.



Don't you understand...??? An UNSEXY business idea is not necessarily an ugly duckling. It doesn't matter what people think about her right now. She could become a beautiful swan if you feed and nurture her properly!!!! Don't be ashamed if people find out you own a slaughterhouse!!!!!!
Disclaimer: I am not saying that each and every single business idea will work for you. It's going to depend on multiple factors such as your personality, work ethic, the individual niche you are choosing and etc..Maybe none of them are for you and that's fine. I am also not an expert on most of these ideas. So you might want to do some research if you find one of these ideas worth executing. But that's not the point of this thread. My aim is to encourage other aspiring entrepreneurs to pursue UNSEXY business ideas!

So what are some of your UNSEXY business ideas??
How is your niche on Mushroom Cultivation going so far?
 

Wisith

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Here's an idea NOT to take on...at least at the moment. I met with a client/friend today. He owns a die casting company...it doesn't get much more blue collar than this. They buy metals (primary aluminum and zinc) in bar shape. Those bars are heated to 2000+ Fahrenheit and pour into desired shapes. So think of Iron Man 1 when Tony was making the suit in the cave, lol.

They got hit hard with COVID...said it was the death blow. The owner had to call all the contacts they've made in the last decades for jobs. And even that they have enough job for the next 4 weeks, where as when times were good, they offered employees unlimited overtime.

The owner said business has been slowing down for the last 10ish years due to China entering the market. They make parts for various industries, ranging from speaker/subwoofer skeleton to smaller pieces for valve mechanism used in water filtration pumps.

The guy is in his mid 80s. He said it's bittersweet, but just going to call it retirement. I guess the good thing is that his location became a prime location during the last 15-20 years so he should be able to get a nice return on that.

Not much of help, but I guess I'm posting to sort of vent for the owner.

As we explore potential ideas to look into, we should look at ones that can't be outsourced. In this case, the customers don't care where the parts are coming from..they just want the parts made to their specs.
 

damortens

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Hydroponic saffron farming

Own a half way house for addicts (youd be AMAZED at how lucrative this is)

Private label an overpriced vacuum and start your own door to door "kirby vacuum" knockoff sales company (I managed one for a while)

...
Hydroponic farming sounds like the perfect business with a medium to high entry barrier, thanks for the idea
 

thechosen1

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Here's an idea NOT to take on...at least at the moment. I met with a client/friend today. He owns a die casting company...it doesn't get much more blue collar than this. They buy metals (primary aluminum and zinc) in bar shape. Those bars are heated to 2000+ Fahrenheit and pour into desired shapes. So think of Iron Man 1 when Tony was making the suit in the cave, lol.

They got hit hard with COVID...said it was the death blow. The owner had to call all the contacts they've made in the last decades for jobs. And even that they have enough job for the next 4 weeks, where as when times were good, they offered employees unlimited overtime.

The owner said business has been slowing down for the last 10ish years due to China entering the market. They make parts for various industries, ranging from speaker/subwoofer skeleton to smaller pieces for valve mechanism used in water filtration pumps.

The guy is in his mid 80s. He said it's bittersweet, but just going to call it retirement. I guess the good thing is that his location became a prime location during the last 15-20 years so he should be able to get a nice return on that.

Not much of help, but I guess I'm posting to sort of vent for the owner.

As we explore potential ideas to look into, we should look at ones that can't be outsourced. In this case, the customers don't care where the parts are coming from..they just want the parts made to their specs.

We're in a similar boat. As you can imagine, overseas cheap competition is not exactly welcomed here (the workers in China probably make pennies compared to the $35/hr pay welders get, plus unlimited overtime, plus OSHA, plus insurance, plus paid vacation, you get the idea). Trump is extremely popular in my area and with all of the workers.
 

Ernman

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Here's an idea NOT to take on...at least at the moment. I met with a client/friend today. He owns a die casting company...it doesn't get much more blue collar than this. They buy metals (primary aluminum and zinc) in bar shape. Those bars are heated to 2000+ Fahrenheit and pour into desired shapes. So think of Iron Man 1 when Tony was making the suit in the cave, lol.

They got hit hard with COVID...said it was the death blow. The owner had to call all the contacts they've made in the last decades for jobs. And even that they have enough job for the next 4 weeks, where as when times were good, they offered employees unlimited overtime.

The owner said business has been slowing down for the last 10ish years due to China entering the market. They make parts for various industries, ranging from speaker/subwoofer skeleton to smaller pieces for valve mechanism used in water filtration pumps.

The guy is in his mid 80s. He said it's bittersweet, but just going to call it retirement. I guess the good thing is that his location became a prime location during the last 15-20 years so he should be able to get a nice return on that.

Not much of help, but I guess I'm posting to sort of vent for the owner.

As we explore potential ideas to look into, we should look at ones that can't be outsourced. In this case, the customers don't care where the parts are coming from..they just want the parts made to their specs.
For the sake of argument, I'm going to disagree. There's nothing wrong with this niche, but there is a problem with how the old owner is doing it...which sounds like the same way he's always done it.

For instance...imagine if he had invested in some 3D printers. Now clients can send him CAD files that he can use to make molds and then pour the castings in a few days. His prime service now becomes test castings, one offs, test runs, etc. He can charge more because he can make changes quickly and get product back fast. Depending on the size and complexity this could be a couple day turn around.

It always grieves me when I see/hear of a business folding because - for whatever reason - they didn't get a fresh perspective on there business as the world changed around them.
 

Ernman

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We're in a similar boat. As you can imagine, overseas cheap competition is not exactly welcomed here (the workers in China probably make pennies compared to the $35/hr pay welders get, plus unlimited overtime, plus OSHA, plus insurance, plus paid vacation, you get the idea). Trump is extremely popular in my area and with all of the workers.
It's important that we recognize that consumers were the driving force leading to most production moving "overseas". Here in the US, consumers demanded lower prices but workers demanded higher wages. We also wanted safe places to work, clean water to drink and air to breath. The result was production moving off shore where the labor is cheap, safety an after thought and don't get me started on the air and water quality in some parts of the world. Overly simplistic and US centric argument I know. But the point I'm trying to make is that we can't have it both ways. Add to that the complex nature of most manufacturing supply chains now and it's a very complicated dilemma. No easy answers here and nobody likes recognizing that they are part of the challenge. Here on the forum we have the opportunity to be part of the solution.
 

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For the sake of argument, I'm going to disagree. There's nothing wrong with this niche, but there is a problem with how the old owner is doing it...which sounds like the same way he's always done it.
That is so true. When running my chemical business I was troubleshooting manufacturing industries and I saw every variation from factories that were not much better than steam age though to ones that were grossly over-engineered and over-managed.

The interesting aspect was that in one industry that I supplied extensively with aids to manufacture, one of the most primitive factories vastly out produced one of the "state of the art" factories, mainly due to some young genius establishing stifling rigid demarcation rules on the assumption that individuals handling only one specialized operation would be more efficient than a team who all knew every operation.

It's important that we recognize that consumers were the driving force leading to most production moving "overseas".
I am very glad to read this. People want to blame China, but Chinese manufacturers didn't storm western countries.

Consumers have a tendency to place price above other considerations. Some years back it ranked 4th in order of reasons behind buying decisions. Now it is there at the forefront because more and more people are influenced by emotional factors that cause price to enter into every buying decision as #1.

Retailers recognized this and began the downward price trend using those emotional triggers and it bit them on the bum. The spiral set in and the only solution the big retailers saw was to buy from a cheap labor source: China. The rest is history.

I am writing about this societal change in my upcoming reision of my book on labeling as part of marketing psychology. I have to finish my importing book revision first, so don't hold your breath for the new edition of LabelsThat Exploit.

Walter
 

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The interesting aspect was that in one industry that I supplied extensively with aids to manufacture, one of the most primitive factories vastly out produced one of the "state of the art" factories, mainly due to some young genius establishing stifling rigid demarcation rules on the assumption that individuals handling only one specialized operation would be more efficient than a team who all knew every operation.
Walter - I want to make sure I understand you properly. Which company was using the specialized operation model and were they the out performing company? Was specialized operation superior to multi-task capable team? Please clarify.
 

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I've been contemplating ideas for the elderly care space for a while now. And every idea I come up with ends with the same conclusion, Where the hell does the money come from?

For example: Dementia and Alzheimer caregivers give over 470 billion dollars a year in unpaid aid to loved ones who remain at home due to the outrageous costs of nursing homes and care centers.

  • At $470 billion in 2013, the value of unpaid caregiving exceeded the value of paid home care and total Medicaid spending in the same year, and nearly matched the value of the sales of the world’s largest company, Wal-Mart ($477 billion). [AARP Public Policy Institute. (2015). Valuing the Invaluable: 2015 Update.]

If you really would like to change the world this is one way to do it. I was thinking of a way that medicaid/care could be subsidized and used to pay your friends and family for taking care of you, Or a home-care app that allows you to find trained "freelance" caregivers(but that comes with many problems of course, Especially vetting).

If anyone would has any ideas HMU, Or take this idea, but you better use it and change the world because a lot of people need help and with humans living longer alzheimers care is really going to begin taking an unprecedented toll on productivity and QOL in about 30 years.
I've personally gone through this recently and it is a huge, huge problem and opportunity.
 

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My question is: Harder than what? Effectively adjusting strategy every 6 weeks to stay relevant to search, kissing customers asses on social media and managing inevitable bad reviews that can put you out of business isn’t easy. Quite frankly, if you’re looking for easy, keep your day job.
^ this.
 

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I can also suggest looking at government as a customer. The government is literally swallowing up 40 percent of our GDP annually. Where does all that money go? Some obviously to wages of government workers, but the rest (and then some) to businesses and contractors that serve the government.

As you drive around, as you go through life today, I encourage you guys to look at everything you see in common public areas that the government, local, state or federal probably pays for. Roads, grass, lawn services, street lights, government buildings, sewers, water, signs, cop car equipment, police body cams(saw one yesterday when he wrote me a speeding ticket), fire station equipment... that was just me spit balling. You hopefully get the picture. The government is literally the worlds biggest customer, and while everyone from here to China has been fighting over the eyeballs of Amazon customers, very few fight for the business of the government.

Think it sounds harder? My question is: Harder than what? Effectively adjusting strategy every 6 weeks to stay relevant to search, kissing customers asses on social media and managing inevitable bad reviews that can put you out of business isn’t easy. Quite frankly, if you’re looking for easy, keep your day job.
For any reading this thread and Kak's comment - I second his opinion. There's plenty of opportunity selling to the government. Is it any harder than selling to the public? Depends on what you call hard. I recently assisted a client making a specific product for a large defense firm. His product had to get approved by the government inspectors who were measuring nail spacing and board lengths to tolerances thinner the saw blade. But now he is the ONLY approved vendor. How would you like to be the only one selling a product with annual revenues around $2M and reasonable margins? (sorry can't provide too much detail) Selling to the government and the Big D companies isn't for everyone, but it can be lucrative.
 

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Walter - I want to make sure I understand you properly. Which company was using the specialized operation model and were they the out performing company? Was specialized operation superior to multi-task capable team? Please clarify.
The multi-task capable team (TEAM A) out performed the specialized operation model (TEAM B) by a loooong way. This was despite TEAM A'S manufacturing equipment being old. As a team they worked like a well oiled machine.

In both factories workers in a different part to the factory made components and the final process involved assembling and putting everything through a complex pressing and curing process.

The processes were almost identical in both places. The difference was in the speed with which TEAM A were able to handle it all, because unlike the workers in TEAM B they didn't have to wait for a specialist to complete a task before they could do the next one.

I should add that I could see no difference in product quality.

Walter
 

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The multi-task capable team (TEAM A) out performed the specialized operation model (TEAM B) by a loooong way. This was despite TEAM A'S manufacturing equipment being old. As a team they worked like a well oiled machine.

In both factories workers in a different part to the factory made components and the final process involved assembling and putting everything through a complex pressing and curing process.

The processes were almost identical in both places. The difference was in the speed with which TEAM A were able to handle it all, because unlike the workers in TEAM B they didn't have to wait for a specialist to complete a task before they could do the next one.

I should add that I could see no difference in product quality.

Walter
Thank you for the clarification Walter. There's some valuable information here for more than just production.
 

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