Advice For The Entrepreneur
- Where To Begin
by Martin Thomas
One of my associates once asked me "if you had your wallet taken
away from you and you were dropped out of the sky into a strange
city with nothing but the shirt on your back, what would you
do and how long would it take to get financially established?"
I liked the challenge of the idea and thought long and hard
about the answer. To be honest, I can essentially say the difficulty
would be overcome by time but it would not be insurmountable
within say in under 6 months. I believe for the sake of the
exercise, you would define "financially established" as say
$100,000. With this amount you could properly begin to utilize
leverage through other people's money and take loans for real
estate. This is where the real compounding would begin.
Within another 6 months I would have $1 million give or take,
or at least be definitely on my way to a million. It's this
first $100,000 that would be the real challenge. With experience
you know exactly what you would do. If you hadn't done anything
like it before, (make $100,000 in 6 months) then you may find
it more of a challenge.
The biggest challenge in this situation would be not having
intimate knowledge and experience in this hypothetical city.
Knowing what's available and where to find the things you need
is a big obstacle that it takes time to establish contacts and
takes time to accumulate the experiences you need to drive that
business to a point where you are taking real profits.
So, broke, no money, no contacts and nowhere to live. The first
thing I would do even before I found a place to live is to find
some easily accessible retail markets. Of course without a single
dime to my name, I would be forced to avoid commercial rental
premises. What I mean is find places where crowds gather. Fairs,
trash and treasure markets, pavilions, I would take note of
anywhere that people congregate en mass for recreational or
consumer purposes as long as it was open air and was accessible
to me without needing to pay for the exposure.
Without a single dime to my name, I would be forced to start
at the very bottom. I would have to offer some sort of impulse
service. I am working on establishing a seed capital account
of around $500 and will have to do what it takes to get to this
point. It would depend on your own personal skills and personality.
I could find an old crate and borrow a black marker to make
a sign and give neck and shoulder rubs for $10 for 15 minutes.
Maybe I could busk as a humourist and make a large racket and
get a crowd to gather. It would really depend on the circumstances
I find what I would do here, but I would have to be restricted
to offering some sort of service that people will be readily
willing to pay for.
I would probably have to spend a few nights sleeping out in
the cold, so I can preserve my seed capital but once I had $500
I could begin my entrepreneurial activities and compound my
seed capital. I would work on sending out the whole $500 out
on a daily basis to work for me. Working on a mark up of say
30% I could compound that into $5000 within say 2 weeks.
To make the money work for me, I would become a middle man (my
favourite place to be) I would seek out retailers and wholesalers
and make deals. Whether it's fresh fish or leather hand bags
or a mixture of both (fish leather handbags?) it makes no difference,
the only goal here is to make a minimum profit of 30% or more.
I am sure I would experience some windfalls here or there where
I have 100% days but I wouldn't count on them.
Once I had a network established, I would hire some reliable
labour to continue with pick ups and deliveries, while I began
to scout around for investment objects and start investing in
high demand small ticket items. Cars, boats, etc. Items that
will offer a quick turn over.
Real estate is my ultimate goal, but I think over time I could
quite confidently move towards that goal and get to the point
where finance was possible and real estate investment was the