Diary of Opening A New Business

[JEdwards]

I have a question for you Jack. When you said that you know a friend who always went all in with all of his deals, do you think that its because he has confidence to overcome any obstacles that are thrown in his direction? .

I think he is the smartest person I have ever met. (literally) He not only has the confidence he has the smarts.

He is like the chess player that knows he is 12 moves away from winning.. Most people only see the move in front of them. Most young entre's only see one or two moves ahead. Older guys like me see 3 or 4 moves ahead. He sees 12.

Having said that, he is not worth 100 million either cause he is such a huge gambler, and has lost millions on deals. Millions at the table in Vegas, but he has always been able to come out a little ahead.

Always amazes the people who have known him the longest.

 

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[JEdwards]

Jack, you should give this idea to someone from this forum, who writes the best essay "why Jack should share his "idea" with me".

What do you think??

Horrible idea, cause you may be able to write the greatest essay, still does not mean you can have the confidence, smarts, want, desire. to pull it off..

 

[Blacktye6000]

Horrible idea, cause you may be able to write the greatest essay, still does not mean you can have the confidence, smarts, want, desire. to pull it off..

That's very true.

 

[winch]

I think he is the smartest person I have ever met. (literally) He not only has the confidence he has the smarts.

He is like the chess player that knows he is 12 moves away from winning.. Most people only see the move in front of them. Most young entre's only see one or two moves ahead. Older guys like me see 3 or 4 moves ahead. He sees 12.

That's a freaky amount of foresight. How long have you known him? I'm curious how sharp he was before he got involved in business--I'm sure it was crazy, but I'm curious how much his experienced has honed his judgment.

Having said that, he is not worth 100 million either cause he is such a huge gambler, and has lost millions on deals. Millions at the table in Vegas, but he has always been able to come out a little ahead.

Always amazes the people who have known him the longest.

Think he'd be at the way way top if he wasn't such a gambler?

 

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[JEdwards]

I have known him 25 years, since high school. We would always talk about business.

If he wasn't such a gambler/drunk, he would easily be worth 1/2 a billion.

 

[winch]

Well, he sure must know how to have a good time then.

 

[winch]

Jack, have you ever gone into business with friends or do you avoid that type of the thing?

 

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[JEdwards]

Well, he sure must know how to have a good time then.

It is quite sad actually. I would not want his life at all. All his friends now are hanger on losers that are just there to get something from him..

Jack, have you ever gone into business with friends or do you avoid that type of the thing?

Yes I have, I have helped friends open many different businesses, such as the pest control business, a car lot, a copier business. etc. All Failed.

Now, no.. Again most people just want to work for someone else, If a friend comes up to you and says, hey man I got a great idea.. pass on it or steal it but don't become partners. (well unless he has been in the business 20 years and/or has a lot more money than you.

 

[winch]

It is quite sad actually. I would not want his life at all. All his friends now are hanger on losers that are just there to get something from him..

That's too bad, then. Wasn't sure the extent of his issues, but you've made it clear.

Yes I have, I have helped friends open many different businesses, such as the pest control business, a car lot, a copier business. etc. All Failed.

Now, no.. Again most people just want to work for someone else, If a friend comes up to you and says, hey man I got a great idea.. pass on it or steal it but don't become partners. (well unless he has been in the business 20 years and/or has a lot more money than you.

Oh, the pest control wasn't a solo gig? The plot thickens! Do you think it's inherently harder to do business with friends? Due to the added complications when you're both not on the same page or is it something else altogether?

This line cracked me up: "If a friend comes up to you and says, hey man I got a great idea.. pass on it or steal it but don't become partners."

 

[JEdwards]

Do you think it's inherently harder to do business with friends? Due to the added complications when you're both not on the same page or is it something else altogether?

Yes, maybe that is not true with all people and they can be a partner with a friend, but I kind of know what I want and kind of know what works, Most friends don't. And I don't want them spending my money on them learning.

Are you thinking of taking on a partner?

 

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[winch]

A good friend at my current work and myself have discussed it. Both work hard (yeah yeah, I've met very few people who claim otherwise...), have similar mindsets, and that whole bit. I've always been self-motivated though, so I'm not fully convinced it's a great idea in the grand scheme of things and wouldn't want to jeopardize the friendship when I don't think it is necessarily needed.

 

[JEdwards]

Good Luck with that, I say don't do it.

 

[winch]

Well, thanks for the honest response. I've been thinking about it lately and have been coming to that conclusion, also. Kicking that one out of the thought bank now; it's onto bigger and better matters.

 

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[Pete799p]

Find your show. go in, wear a nice suit. Pass all the big guys, go to the farthest point from the door, Look at the signs, they start turning Chinese, find a guy that sells your stuff, walk up to him and say, I think I can sell 10,000 units I would like to become a U.S. "PARTNER" of yours.

I love this idea. I have actually been working on something like this for several months but the industry I am entering does not have a trade show until early next year so I have been making contacts via the internet.

When you started your wholesale companies did you know how many units you would sell or did you just estimate based on your competitors. When you tell a manufacturer that you can sell 10,000units do you know or is it a reasonable guess. Are there ways to find these numbers out.

Thank you

 

[JEdwards]

No way to know the numbers of other compaines.

You just need to know what you can do, realistically, or it will be a very short partnership.

But most Chinese companies are not looking for a little one-z two-z deal.. Tell them you can gross them 5 million a year, you just need 5 years to build their brand in the states. They love big numbers. Figure out your plan and make sure it is big.

 

[winch]

Hah. One part of me says, oh there's one way of going after business, and the other screams at that part because most (I'm putting that as a "just in case" disclaimer, I wanted to put all) of the products I buy that are made in China are crap.

 

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[wade1mil]

Hah. One part of me says, oh there's one way of going after business, and the other screams at that part because most (I'm putting that as a "just in case" disclaimer, I wanted to put all) of the products I buy that are made in China are crap.

It's not what you want, it's what the market wants. McDonalds hamburgers are crap, but they sell a couple.

 

[awesom-o]

I am asked this a lot. Seriously if I was a newb trying to get out there, I would go to the trade show of whatever industry you are in.. If you are in butter, trust me there is a butter trade show somewhere.. Most of the time in vegas.. I am talking the manu - wholesalers trade show. Not the one they advertise. Like ces, kbis, sema,

Find your show. go in, wear a nice suit. Pass all the big guys, go to the farthest point from the door, Look at the signs, they start turning Chinese, find a guy that sells your stuff, walk up to him and say, I think I can sell 10,000 units I would like to become a U.S. "PARTNER" of yours.

See those guys want to sell product in the U.S. very very badly. Tell them your idea and have them send you a container of whatever.. They will do it.

True Story, I was once shipped $500k worth of product on a hand shake.

Hope someone takes this advice, I have a great business idea wrapped around doing this, just don' t have the time.

I've been following this topic Jack and your story and progress so far is fantastic keep up the good work

This idea is a good one but if you've never been in distribution before and have no track record how do you convince a serious manufacter to trust you without throwing around crazy numbers with nothing, (apart from some speculative plan) to back it up with? Let alone convince them to send you a container load of products with no up front payment!? Whats your secret!

 

[JEdwards]

1. The XKE great car. Always wanted one.

2. Confidence, See the guys in the back on the side from China, they are looking for someone, anyone to carry their off-line brand of product in the U.S.. Makes for easy picking. Last thing they want to do is go back all the way home, and tell their bosses, we found no one.

Having said that, you better have a better than "I am going to put up a website and do some SEO marketing" pitch.

Think big on this, cause they are.

If I had the time, I would really explore this angle more.

 

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[JEdwards]

Hah. One part of me says, oh there's one way of going after business, and the other screams at that part because most (I'm putting that as a "just in case" disclaimer, I wanted to put all) of the products I buy that are made in China are crap.

Like the iphone? Everything is made in China, and I don't think you realize the same company that makes brand names, sell knock off's out the back door, same quality. Same company..

Their ethics are not really the same as ours.

(of course there are a ton of bad manufacturers, but see which one will give you money and product that you can deal with.)

As a side note: I find myself wanting to think about doing something with this..

 

[awesom-o]

1. The XKE great car. Always wanted one.

2. Confidence, See the guys in the back on the side from China, they are looking for someone, anyone to carry their off-line brand of product in the U.S.. Makes for easy picking. Last thing they want to do is go back all the way home, and tell their bosses, we found no one.

Having said that, you better have a better than "I am going to put up a website and do some SEO marketing" pitch.

Think big on this, cause they are.

If I had the time, I would really explore this angle more.

Sure is a beautiful car couple of years from now one will be sat on my driveway :groove:

Thanks for the input, you would definitely offer to provide cold calling agents along with various on and off line promotion as a minimum.

Slightly off topic but this reminds me I looked into hiring some call agents a few months back for another project and one option I had was to hire on a commission only basis rather than basic pay + smaller commission. I know it has pro's and con's but have you had any experience doing this with your current or past businesses?

Finally when looking for potential products do you tend to focus on a certain niche or certian criteria?

 

[JEdwards]

Thanks for the input, you would definitely offer to provide cold calling agents along with various on and off line promotion as a minimum.

Slightly off topic but this reminds me I looked into hiring some call agents a few months back for another project and one option I had was to hire on a commission only basis rather than basic pay + smaller commission. I know it has pro's and con's but have you had any experience doing this with your current or past businesses?

Finally when looking for potential products do you tend to focus on a certain niche or certian criteria?

Always niche, very niche.. The things that are so niche are the things that make the most money. Think industrial applications

I want the best so I pay a good salary and a good commission..

Two problems as a start up with commission only gigs.. You better be able to show them how much they can make and prove to them they can make it, cause if not, on Friday you will have 5 people and on Monday you will have zero.

I would say if you are a start up, unless you are willing to offer a base don't do it. Way to many headaches.

 

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[Ambition]

Always niche, very niche.. The things that are so niche are the things that make the most money. Think industrial applications

I've usually been advised to stick to what I know. it is a rule I've stuck to in my market dabbling and in my hobby businesses. Is this one of your considerations when choosing a new business venture niche?

Once again, great thread, thanks

Ric.

 

[JEdwards]

Not really, The last business I had and this business I had no idea, no experience, just asked myself why and saw what the competition did and thought I could do that better.

 

[Ambition]

... just asked myself why and saw what the competition did and thought I could do that better.

Okay, good answer, but it is clear what you know is how to do a business.

On the other hand, I did once get annoyed about the standard of articles in a magazine I once subscribed to, so I analysed the general house style, then submitted a few articles of my own. I ended up writing for them for a couple of years before I got bored (taking a little more care with grammar & spelling than when posting here). So I guess I can find parallels to your "saw what the competition did and thought I could do that better" that have worked for me.

I'm looking forward to your next business update, as ever!

 

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[winch]

It's not what you want, it's what the market wants. McDonalds hamburgers are crap, but they sell a couple.

Like the iphone? Everything is made in China, and I don't think you realize the same company that makes brand names, sell knock off's out the back door, same quality. Same company..

Their ethics are not really the same as ours.

(of course there are a ton of bad manufacturers, but see which one will give you money and product that you can deal with.)

As a side note: I find myself wanting to think about doing something with this..

I meant that more tongue-in-cheek, but point taken both you :smxB:

 

[winch]

Jack, since your previous suggestion has spurred discussion do you think the "reverse" is as effective? Say you have an idea, proof of concept, and you approach a manufacturer that may be off the radar with the prospect. Not going all in with just any manufacturer, but do you think people in these situations would also be open to new products?

I know a very specific problem in a very niche industry that, if solved, can throw current manufacturing techniques for a whirl. I've met manufacturers and know they're hungry for this, also. They said so themselves, just don't know how to do it. I'm confident I can solve this problem, and as a thought experiment wonder different ways to bring it to market when I do.

My main focus is actually solving the problem, but I think about this from time to time.

 

[Pete799p]

I have found a product I really like and think will sell but the manufacture is on the fence about providing me exclusivity.(downside of networking via the internet). I know if I can make a few sales it will be mine.

Have you ever sold products to other distributors without exclusivity if so how do you ensure you would not be cut out. I can get a quantity discount that will allow me to turn a profit at the current manufactures small MOQ price. Is it a bad idea to sell initially for no profit with the goal of growing my sales into quantity discount volumes or to prove my skills and secure my partnership.

Thank you

 

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[SweetJones]

Is it a bad idea to sell initially for no profit with the goal of growing my sales into quantity discount volumes or to prove my skills and secure my partnership.

From SharkTanks Kevin O'Leary.

"Money is one of those things in life that's black or white, YOU'RE EITHER MAKING MONEY OR LOSING IT.."

Absolutely. It is a bad idea, you are running a business, not a charity. Don't be afraid of making money or charging for your product or how will you survive? Don't set yourself up for failure.

Unless I am confused, you want to secure business by selling initial product at cost price and rely on manufacturer discount to make money for your business? What if they take away the discount next time? Then what? Don't base your business on HOPE. Prove yourself by securing PROFITABLE deals, that way it's a win win situation. Win for you and win for them. Otherwise it's win for them and KO for you.

 

[theBiz]

Jack you make things sound very simple and to some degree you are right, but i think only with experience this is true. If i went and worked for you and really applied myself im sure i could leave and have a good shot at successfully copying you with some capital just like anyone else who has a brain and determination. What really is impressive to me is how you started with no experience and went big (sales office) etc and made it work.


This is something i have to give you credit for... it is easy to copy places you work for, but difficult to just "figure out" businesses of the magnitude you have been involved in starting.