I’ve been outlining some of the many ways you can create business opportunities for increasing you income by leveraging today’s technological tools to start something with nothing but a little time and effort. Here are a few more ideas for you to explore
Physical products fall into two general categories: custom or handmade items that you create one at a time, or things that can be reproduced in large quantities at a cheap price.
The advantage of custom items is that you can potentially charge more for them. On the other hand, they’re more like a service because you’re still trading your time for money. Your only leverage comes in the form of maximizing your price. However, if you are a world-class artist, that leverage can be substantial. One option here is to create simple handmade items and selling them on websites like Etsy.com.
The advantage of reproducible products is that you can potentially get a lot more leverage. You only have to do the work of creating the product one time. However, depending on the product, it may require substantial up-front capital to fund bulk purchases. Use the “Win, Then Play” principle here to decide whether or not it’s worth it to reproduce larger quantities.
As far as selling physical products goes, your options range from selling at local markets to selling your products online. Tons of ecommerce solutions are readily available, such as Volusion and Shopify. You can turn your ideas into an online store with endless possibilities.
Fix and Flip
By fix and flip I’m not just referring to real estate. I mean this in a larger sense of value-added reselling, meaning to purchase something at a low price that you can put some work into and then resell at a higher price. This can include real estate, cars, furniture, virtual real estate such as web domains and monetized websites, and more.
Some tips to consider:
- The bigger and more expensive the item, the greater the potential profits. However, this also makes for more upfront capital, more complexity, and greater potential for loss. For example, real estate gives you the greatest profit potential, but it also comes with the greatest complexity and risk, particularly if you’ve never done it before and don’t know what you’re doing.
- It’s better to start small and then build big. The less you spend to purchase your first item, the less you have to lose if you don’t make your money back. Start with something small, and learn the process as you build.
- Become an expert on one thing. It’s better to become an expert on one thing, such as cars or furniture, than to diversify and dabble in a lot of things you don’t know well. As Andrew Carnegie said, “I put all of my eggs in one basket and watch it like a hawk.”
I started out with real estate in my teens doing fix and flip, but I quickly realized that it could easily turn into a never-ending hamster wheel. So while fix and flip can be used successfully, I caution you against seeing it as a long-term strategy. Ultimately, you have to convert your gains into cash flow. By continually selling your assets you forfeit the ability to generate ongoing cash flow. It may be an appropriate strategy for a short time, however, in order to free up discretionary funds for investing.
I prefer to use the term “valufacturing,” which I coined to give a more holistic understanding of fix and flip. It combines value and manufacturing, meaning to manufacture value. With valufacturing, I look at underperforming real estate and businesses and see how I can add value to increase long-term profits. I’m not just looking for a quick flip, I’m looking for long-term cash flow and a potentially lucrative exit strategy down the road. The profit has to be in the purchase.
My point is to not get stuck in fix and flip mode forever. Remember: ongoing cash flow is the name of the game.
In my next post, I look at how you can use the internet’s domain names to build online assets and increase your income.
I’d love to hear form you about your ideas for increasing your income in today’s economy. Thank you for sharing.
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