Diary of Opening A New Business

[Pete799p]

Sweetjones: i am not saying that this was the best idea i have come up with but this is my thought processes behind it. I have free officespace and a decent amount of storage space to get started which is why I figured I could sell for low to no profit as the only cost will be my time and i figure it would be good experience. Plus i am tired of waiting and want to start selling. Also with the low MOQ i wont have to carry any stock myself until i want to purchase bulk and the small order ship times are quick. If the manufacturer revokes the quantity discount I could always have it made by somebody else or walk away. I am just trying to think of ways to start pulling this idea rather then pushing.

Thanks again.

 

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[JEdwards]

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.

Don't think so as they allready are making what they are trying to sell, they would have to redesign and build a way to make yours, on a hopes you can sell them..

Please remember having something built is the easy part.. Selling it is the hard part.

 

[JEdwards]

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

Wrong way to think..

Sell for no profit, Don't do it.. Don't even think about it....

Think about it, you sell something at cost to a dist, you really going to go back and raise the price. what is going to happen is they are going to ask you to cut the price.

 

[winch]

Don't think so as they allready are making what they are trying to sell, they would have to redesign and build a way to make yours, on a hopes you can sell them..

Please remember having something built is the easy part.. Selling it is the hard part.

Something just clicked. This really got me thinking. Thanks for the insight.

 

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[CPisHere]

I just stumbled upon this thread... FANTASTIC!

But come on, it's been over 10 months and you still haven't told us what business it is!! The suspense is killing me!

LOL, I completely understand. Best of luck to you!

 

[winch]

Primarily a paper products company. Goes by the name of Sabre-Dunder Mifflin.

Very niche. Very profitable. Very sexy.

Yeah, it's kind of a big deal.

 

[CPisHere]

Sabre-Dunder Mifflin is a public company with no offices in Texas (where JackEdwards lives), and was founded in 1949.

This company could be a competitor of there's, but no way is it the same company, assuming JackEdwards' story here is true.

 

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[Ambition]

Sell for no profit, Don't do it.. Don't even think about it....

I found this and link and it reminded me of Jack's advice. It is a good illustration about the danger of doing business at a loss: Groupon demand almost finishes cupcake-maker - Telegraph

Basically a cake-maker offered a Groupon deal to sell cupcakes for £6.50 (GBP) a box, generating a loss of £2.50 per box. She was inundated with over 8,500 orders, which then wiped out her profits for a year. Of course, she was a bit ill-advised to make an unlimited deal, but I think it still illustrates the point.

 

[Ambition]

but no way is it the same company

Also I believe paper is a low margin & low value-add commodity business, and is without a service element (which I think Jack's business has). Now if it were office machinery of some sort; vending machines, rest room hand driers, or something then I think it would be a better fit.

Vending machines have the ongoing business relationship, whereas hand driers will have a low repeat business profile so are not such a good fit.

 

[awesom-o]

Sabre-Dunder Mifflin is a public company with no offices in Texas (where JackEdwards lives), and was founded in 1949.

This company could be a competitor of there's, but no way is it the same company, assuming JackEdwards' story here is true.

I take it you haven't watched the US version of The Office

 

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[HsrJames]

My guess is credit card processing. You need salespeople to get the accounts, you need to warehouse the actual machines. And you get huge backend residuals. Just a guess.

 

[CPisHere]

I take it you haven't watched the US version of The Office

LOL, no I don't.... seen it before, but didn't catch on.

 

[Tay1]

The warehousing bit might be a spinball to throw people of the scent of what Jack really does, as this is what i would do if i didn't want people to know what i was really up to.

Just a guess.

Jack, great thread, following it closely, will you reveal after you have done a year.

 

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[JEdwards]

My guess is credit card processing. You need salespeople to get the accounts, you need to warehouse the actual machines. And you get huge backend residuals. Just a guess.

No that's not even close.. Not a bad biz though.

 

[JEdwards]

The warehousing bit might be a spinball to throw people of the scent of what Jack really does, as this is what i would do if i didn't want people to know what i was really up to.

Just a guess.

Jack, great thread, following it closely, will you reveal after you have done a year.

Thanks,

Actually it does take a warehouse, if not multiple warehouses..

I will fess up, it is sms text messaging, groupon, with a little website design thrown in, what we send out is coffee mugs..

 

[CPisHere]

i will fess up, it is sms text messaging, groupon, with a little website design thrown in, what we send out is coffee mugs..

wtf? Lol.

 

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[Runum]

I will fess up, it is sms text messaging, groupon, with a little website design thrown in, what we send out is coffee mugs..

 

[Ambition]

Hi Jack

How was your trip to Japan?
BBC News - Luxury sports cars in costly Japan pile-up

 

[Pete799p]

Jack,

I was wondering what tools or methods you use to assess a market or project sales.(trade association data etc.) I know projections are usually not spot on but are there any indicators or stats you look for when assessing the marketability of a new product. When you partnered with a manufacturer and he sent you 500K of inventory was it a product you were already looking for and knew you could sell if not what made you choose to partner with him.

Hope all is running smoothly.

Thank you

 

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[JEdwards]

Jack,

I was wondering what tools or methods you use to assess a market or project sales.(trade association data etc.) I know projections are usually not spot on but are there any indicators or stats you look for when assessing the marketability of a new product. When you partnered with a manufacturer and he sent you 500K of inventory was it a product you were already looking for and knew you could sell if not what made you choose to partner with him.

Hope all is running smoothly.

Thank you

That was in a business I was already in and selling quite a bit of. So that was easy deal to do. It just takes time to get to that point.

The method I use the most is I get on the phone and see what other people are dong and if that makes sense to me.

I have never looked at trade assc data.

 

[winch]

Hmm..

When calling, do you find you can get a good idea of other people's execution by talking to even one the initial points of contact for a company (i.e., a salesperson)? Or do you talk to multiple people? I'm figuring at your stage you have enough experience to connect the dots without asking too much. Is that true?

Also, Jack, hypothetical question about your current company. If you had felt inclined to go about this venture solo (is that even possible in this case? Let's just say with respect to sales), what do you think your revenue ceiling would be?

Been almost 12 months. Are you where you were expecting to be at this point?

 

[JEdwards]

Yes I believe I do have the experience now, but thinking that way has cost me plenty.

When you say solo, are you talking about (me) one person doing everything and if it would work? If so, I would not of done it.

At this point I am behind quite a bit on my goals, much rougher start employee wise than I expected and some of my angles didn't work out as expected.

Having said that, I am making money every month and expanding every month. If today I decided to stop growing and just live off the true profit, I would show up no more than 2-3 hours a week and money- wise, I would be doing very well.

But I have this deep down desire to push it. Make it all it can be. I am going for it on this one. Besides, what the hell else I got to do???

 

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[theBiz]

At this point I am behind quite a bit on my goals, much rougher start employee wise than I expected.

damn text messaging, people are difficult to get motivated today.

Just kidding, but not really. It is kind of ridiculous what people get away with, the day i hired anyone in an office id be very strict about it and make them sign contracts. I see companies losing money all day due to people not being productive. Im not saying this applies to you whatsoever but im curious, when your not there do you think the manager is on top of them regarding their cell phones.


How to Create a Cell Phone Policy | Inc.com

http://www.legalzoom.com/legalforms/LegalZoom Cell Phone Usage Policy.pdf

 

[JEdwards]

damn text messaging, people are difficult to get motivated today.

Just kidding, but not really. It is kind of ridiculous what people get away with, the day i hired anyone in an office id be very strict about it and make them sign contracts. I see companies losing money all day due to people not being productive. Im not saying this applies to you whatsoever but im curious, when your not there do you think the manager is on top of them regarding their cell phones.

I meant the entire process, hire, fire training, finding the right people who will drink the cool aide..

Here is the deal with the cell phones and face book, no matter what you say people will do it. I do not feel it is out of hand and I believe my mgr's are creating a good example where that is involved. The reality for me is, the numbers do not lie I know what each and every person should be delivering to me a day, if it is calls, I know exactly how many they should be making a day and average time they should be talking. You cannot lie through numbers.

There are no less than 3 different check points for each position.

The best example I have found is in that movie the pursuit of happyness. when he says it is just mathematical, x number of dials will result in x number of results. 100% true.

I am not a ruthless driving person btw.. I know what the best can do if they pushed themselves, I divide that in half and that is what I expect for the most part.

 

[theBiz]

cool, great attitude and outlook. We are all ruthless, just not you Jack, but you gotta make it to the big time first, then you can be a pillar and do good things (wallstreet)

 

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[winch]

At this point I am behind quite a bit on my goals, much rougher start employee wise than I expected and some of my angles didn't work out as expected.

Referring to your above comment about drinking the kool-aid: do you feel this type of result in an employee is due to their personal qualities, or the work environment? (Sort of a nature vs nurture type of question).

I'm not sure how much "barrier to entry" there is for your employees, and what effect that may have on their feeling part of something. Can they come off the sidewalk and be qualified? Or does the product require some type of prior experience? (e.g. exposure, degree) I'm guessing the first one, because you said you were recruiting via craigslist at one point. I'm curious how the turnout would have been had the business required people with that skillset. (Unless it does...)

Having said that, I am making money every month and expanding every month. If today I decided to stop growing and just live off the true profit, I would show up no more than 2-3 hours a week and money- wise, I would be doing very well.

Would that profit rate be constant, or would you have to start putting in more hours eventually to keep it healthy?

Also, how big are the players that you're competing with? If your biz is supposedly very niche, are they small in an absolute sense just by definition? Do/did you find it difficult to get customers to switch over to an unknown company (pre-referral stages)?

 

[Rawr]

I meant the entire process, hire, fire training, finding the right people who will drink the cool aide..

Here is the deal with the cell phones and face book, no matter what you say people will do it. I do not feel it is out of hand and I believe my mgr's are creating a good example where that is involved. The reality for me is, the numbers do not lie I know what each and every person should be delivering to me a day, if it is calls, I know exactly how many they should be making a day and average time they should be talking. You cannot lie through numbers.

There are no less than 3 different check points for each position.

The best example I have found is in that movie the pursuit of happyness. when he says it is just mathematical, x number of dials will result in x number of results. 100% true.

I am not a ruthless driving person btw.. I know what the best can do if they pushed themselves, I divide that in half and that is what I expect for the most part.

I've worked at a place that had these metrics for calling before, it absolutely all can and should be tracked, print out with statistics printed out and passed around the room every couple of hours and managers following up with those in the bottom 30% right away.


Here is an interesting stat I noticed. Callers were required to ask 3 questions - you couldn't hang up until you did, even if you were getting yelled at.

first question positive response was may be 5-10% with most saying they can't do this now
second - 15-20%... still "can't do anything now"
third - 45-60% success rate

blew my mind. lesson learned

 

[JEdwards]

Here is an interesting stat I noticed. Callers were required to ask 3 questions - you couldn't hang up until you did, even if you were getting yelled at.

first question positive response was may be 5-10% with most saying they can't do this now
second - 15-20%... still "can't do anything now"
third - 45-60% success rate

blew my mind. lesson learned

Since we do more "in industry" type of calls, we do not use any hardline telemarketing techniques.

Nice and easy. Still just creating the market and getting our name out there. No need to push it at this point and give ourselves a bad name.

 

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[JEdwards]

We are launching a new product line this morning.

I believe this is the beginning of the actual curve upwards. I have my peeps in place, a name in the market, and now it is go time.

If everything goes as planned, we should double in size in 60 days. and be into a lot of profit. (which I will probably just reinvest).

On a personal level. I am very excited, But my passion is not where it should be, I find myself wasting countless hours, countless amounts of time. I have no focus, not much drive. Honestly it is like I am going through the motions and because I have made money and think I know what I am doing. I am acting as if I am already at my 25 million in sales.

I wish I could snap out of it. < this might be insecurity or fear of failure talking, I don't know. Just thought some people might like to know what goes through peoples heads at any and all levels.

You young people. Keep your wonderment going.

 

[theBiz]

On a personal level. I am very excited, But my passion is not where it should be, I find myself wasting countless hours, countless amounts of time. I have no focus, not much drive. Honestly it is like I am going through the motions and because I have made money and think I know what I am doing. I am acting as if I am already at my 25 million in sales.

I wish I could snap out of it. < this might be insecurity or fear of failure talking, I don't know. Just thought some people might like to know what goes through peoples heads at any and all levels.

Ive always thought what motivates people once they gain some traction or had it previously, seems hard, your probably worn out and just want to relax now. The only true motivator i could see is helping others like family or even keeping your employees employed.