Recently I was told of a woman who had started her twenty-first business. In each case the business was related to cooking. The good news was this woman was a capable businesswoman and an excellent cook.

The problem for this woman was that she got tired of running a business very easily. She would get a business established and grow weary of the day-to-day grind and would set a date to close the doors. Her husband was a carpenter and had systematically refurbished twenty separate properties for his wife’s business ventures.

This woman recently started a coffee shop with a variety of baked goods for sale. The business hadn’t been open 3 months when a separate coffee shop opened in the same retail complex. When she discovered the new business she threw her hands up in despair and asked the owner of the second shop if she could come to work for her.

You see, there is an invisible wall that is sometimes difficult to overcome. That wall is moving beyond the difficult work of day-to-day business where you are needed in the monitoring of all aspects of the business. Some, like the lady in our story, simply get tired and go home to regroup their strength for a later attempt. Others will find ways to derive income that does not rely on their own efforts. These are the entrepreneurs that more easily move forward.

Passive Income

If you are a store that specializes in a product you have created, the sale of items that are available from other suppliers can provide income that is your simply because you supplied shelf space.

The sale of insurance provides a means of deriving an income based on commissions that require little attention from you.

The use of affiliate programs can allow others to sell your products and provide you with an income on something you were not actively involved in selling.

The development of passive income is important to entrepreneurs because if you attempt to develop revenue exclusively on your own then your revenue stream goes dry the minute you need time off.

Someone once said, “Work smarter, not harder.” That’s especially true as you continue to develop your business. Seek ways to allow others to help you sell and market your goods and services. This likely means there will be salespeople working at selling your business even when you’ve left the building for a much needed day off.

Scott Lindsay is a web developer and entrepreneur. He is the founder of HighPowerSites and many other web projects.

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• demographic, such as the “graying” of America (creating opportunities in health services, for example);

• sociological developments, like the “green” movement, with its emphasis on recycling and environmental sensitivity, and;

• cultural changes caused by changing economic conditions and technological developments.

Opportunities can also frequently be found in current and developing business trends such as:

• the globalization of business,

• the need for outsourcing created by downsizing, and

• the burgeoning service economy.

The Internet and rapid growth of e-commerce have certainly created changes in the process of buying books and CD’s, trading stock, delivering information, and bidding on collectibles. Where do you see the next process to be transformed in a major way by the Internet?

Let’s do a brief case study in opportunity:

Neighborhood Coffee Shop

I live in the eastern section of town, which is growing rapidly, and food and business services are not quite keeping up. The “East” is fairly isolated from the rest of the city by water, an interstate highway, and an industrial park, forming a separate and distinct market. “People” are saying that the East desperately needs a good coffee shop. (Who are these people? Are they just in our immediate circle? Are they representative enough of the area to extrapolate from?)

Let us analyze some factors which indicate the opportunity potential of an idea:

* The “window of opportunity” is opening, and will remain open long enough.

We cannot be the only entrepreneurs that perceive these opportunities. How long before the need becomes compelling enough for others to jump in?

* Entry is feasible, and achievable with the committed principals.

Two friends want to be partners with me in a venture; one is managing a coffee shop across town, and willing to manage a startup. Between us, we could muster the capital for a coffee shop.

* The proposed venture has some competitive advantage.

We were among the first to locate in the new area, and are very active in the local business community. We know of an ideal site, and the building manager is a friend. She is willing to sub-contract the beverage and light-meal/dessert services the building provides tenants.

* The economics of the venture are “rewarding and forgiving.”

Materials costs are a small percentage of revenues; site preparation and equipment costs are minimal.

* We can break even at what seems to be an easily achievable volume.

We may even want to consider a more upscale atmosphere based on what some say is the difference between a “coffeehouse” and a “coffee shop:” About two bucks a cup… A coffee shop is a place to grab a quick bite and a cheap cup of coffee.

Eric Gerber of the MSN Network’s Sidewalk suggests that “A coffeehouse is a place to wax philosophical — Mozart or Bach, Faulkner or Fitzgerald, Xena or Hercules? — while seeing just how complicated you can make a simple drink like coffee: double latte espresso-chino with half decaf Jamaican Blue Mountain dark roast, extra low-fat foam and a Frangelica drizzle, please.”

The conditions for starting a neighborhood coffee shop seem favorable, but there must be more that we can do to critically evaluate the venture while improving our chances of success. That “more” is market research, and do not leave the business launch pad without it!

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

A market analysis is a study of the market area and of probable future patterns. It should include the current state of the market, and the nature and extent of competition. The purpose of the analysis is to make it possible to develop more accurate, that is, more fact-based sales forecasts. The method is to identify the pattern or trend of sales over the past and to use this information to project or estimate sales for the period ahead.

Another important issue is how much it costs in selling effort to produce a given volume of sales. It involves two types of costs: advertising costs, and salaries and wages paid for selling. If the business requires sales-people in the field, as a manufacturer might, information on reimbursable travel expenses should be included.

A study of the competition should be included in any market analysis. The competition may be local and well defined, or quite generalized, depending on the nature of the business and of the market. Trade associations and other data-gathering agencies, both governmental and non-governmental, are sometimes helpful in this area. A good deal of the information about competition, such as estimated sales, pricing policies, advertising and promotional costs , services offered, performance of sales personnel, must come from direct investigation, business by business.

Of interest also are whether there are businesses entering and leaving the competition recently, and changes in the competitive structure through product mix or services offered. If there is a lot of flux in the market, we need to look into the causes, and whether they are favorable to our entry.

When evaluating a location, be sure to investigate whether there any plans for proposed changes that may have an adverse effect on the future of the business. Urban revitalization programs, changes in highways and streets, flood-control programs, changes in zoning ordinances, could all severely impact what looks today like a favorable location.

The number of people within the market area and the amount of disposable income they have are important market factors. For many kinds of businesses, the total population is less important than certain segments of the population. A business selling hearing aids, for example, will be interested only in persons who have hearing difficulties, which would generally imply an older demographic.

General population figures are obtained from Federal, State, and local government sources. The Federal census gives not only total population figures but also breakdowns that are useful in many business situations. For most of the larger cities, census figures are further classified by sections within the city, called census tracts, on the basis of certain population and economic characteristics.

Business population figures may be available from numerous sources. The Yellow Pages of the telephone directory and the city directory are local sources that are immediately available. Chambers of commerce, trade associations, and State and Federal government agencies can often be helpful.

Many trade associations report the results of research on consumer expenditures. Other sources of data on income include planning commission offices, employment offices, and utility companies. Many newspapers research and report on building permits and demographic trends, especially in newly developed areas.

A much broader yet vital part of the market analysis has to do with what might be called the general state of the market, that is, overall economic conditions of the market area and of the country. These may be widespread movements such as national cycles of prosperity and less favorable times, or they may be purely local conditions.

Perhaps the prospective entrepreneur favors a particular area, near home for example, and is merely looking for a specific location. It can still be very useful to investigate a couple of other areas, in case the opportunity in the favored area is particularly less than in other neighborhoods. The possibility must always be recognized that the nature and /or direction of the industry, or the competitive situation may prove unfavorable in all the areas investigated.

Options then are to wait for conditions to become more favorable, or to “cast a wider net” geographically or in terms of business niche chosen. In any case, finding out at the analysis stage makes it much easier to optimize the opportunity chosen.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

Selling food

I cant tell you much about selling food in Internet Cafes. I didn’t sell much food. I had pre-packaged food such as danishes, candy bars, and potato chips. I also sold water and soda. An interesting observation was that Coca Cola and water were the two main sellers. I could stock the fridge with 30 kinds of drinks. At the end of the day, it was the Cola and Water sold. I just sell Water and Coke now. If you have a long term lease, I would suggest opening a food portion to your internet café. Be sure to go to your local health department to find out all the rules in setting up your café. Also, be sure to look on eBay for your kitchen equipment. You can usually find restaurant equipment for 20% of the price on eBay.

Where to buy cheap PCs

We advise business owners to purchase their PC’s online. There are a great line of refurbished IBM PC’s on eBay. Its important that once you start out, you purchase the same PC’s, if possible. You’ll understand why shortly.

How to limit technical work

In the olden days, when we had PC problems we used to remove the PC, reinstall windows and all the software. This would take about 1-2 weeks before the PC was replaced. It was very annoying, it would takes hours of brainless work. Then we came up with the idea of removable hard drives. With this system, you must have all the same PC’s. You have a master copy of the hard drives. Then you use a program called True Image (www.trueimage.com) and clone your master hard drive. The cloning takes about 4 minutes. In 4 minutes you have a new drive with all the settings and no viruses. Your PC’s should also have a removable hard drive slot, you can purchase these online. You should make 5 extra clones of hard drives. If a computer is acting up, you simply take your key, open the hard drive slot, remove the old hard drive, and replace it with the new clone. That’s all. Your up and running. Once the system is set-up, maintaining a network of 10 or 1000 PC’s is effortless.

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The strategic plan defines the company’s “competitive edge,” that collection of factors that sets the business apart from its competitors and promotes its chances for success. It requires a clear evaluation of the competitive business climate and an intimate knowledge of the market for the entrepreneur’s product.

The foundation for the strategic plan is a clear mission statement for the venture. Addressing the following questions can assist in developing this statement:

What business am I in? The answer to this question is not as simple as it seems. A good example of an industry group that failed to take a broader view is the railroads. If they had viewed their business as transportation rather than trains-and-tracks, then the airlines would be named Union Pacific and Illinois Central.

Who is our product intended to satisfy? What customer needs are being satisfied? How are these needs being satisfied, that is, by which of our methods or products?

An important strategic option is in how we price our product (as a price leader, value leader, or prestige product). Other options include the way in which we differentiate ourselves from the competition and the particular “niche,” or subset of the market, we seek to serve.

Once we have set internal objectives, we must examine the external and competitive environments in which we will be trying to achieve them.

The external environment consists of those factors that are largely outside our control, but affect the market for our product. Examples of these factors include general economic conditions, regulations, technological developments, and consumer demographics and attitudes. This environment is very dynamic, but some attempt must be made at projecting its changes.

Analysis of the competitive environment must begin with consideration of whether there are any barriers to the entry of a new competitor into the market. How strong is consumer loyalty to existing brands? How important are economies of scale; can a small independent firm compete? Are capital requirements prohibitive? Is there some proprietary technology that puts prospective entrants in a serious competitive disadvantage? Is access to raw materials or to distribution channels limited in some way? Are new entrants limited by permit restrictions or regulations?

The competitive structure of the industry is another important consideration. Are there a few dominant firms, or is the industry fairly fragmented? Will current competitors attempt to “punish” new entrants, such as through a price war, heavy advertising, or exercising their clout with key suppliers? Is there some geographic niche we can serve? What factors create cost advantages or disadvantages? How important is a firm’s position on the learning and experience curves? How are prices set? Is demand rising, even, or falling? Are there exit barriers that raise the risk of entry?

Relative strengths of our strategic partners must also be considered. What is the bargaining power of suppliers? How wide is our choice of suppliers? Is it costly for us to switch? Can our suppliers compete with us for the same customers? How important is our industry to our suppliers?

Do buyers have a wide choice of vendors? Can they make our product themselves? Are there less expensive or superior substitutes to our product in some segments of the market?

These are certainly not easy questions to answer, but performing the research to make better informed decisions, and addressing these questions “head-on” can improve our chances of success.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

Additionally there is not a lot of business to be had besides the I-40 traffic getting off the freeway for a quick bite to eat or traveling thru their town to go to the Casinos in Laughlin or near by Bull Head City, which has recreation areas and good economic growth.

How can some businesses do so well in such run-down areas? Well this discussion came up recently and one gentleman in the area did not even know of the business, yet it still does well. He stated that;

“I ran a wholesale jobber route through the territory you mentioned for 3+ years distributing to c-stores and such. Went ok not really enough mom and pops anymore which were my bread and butter. I never noticed the needles location you mentioned, sounds like a neat idea that might work but needles is such a depressed area.”

Boy you can say that again. Really depressed. They need a complete over haul there. I think part of the problem is the drug issues there, but who would want to live in CA with all the taxes and excess regulations, when you can live in NV or AZ all nearby in that tri-state areas? All the smart people left is my thought?

The oil change place is on the corner across from the Coin-Op, semi full service car wash on the weekends on the road, which goes from Needles to Bull Head City. Can’t miss it, looks somewhat new 3-4 years I guess?

Why do some business succeed like a desert flower in such challenging economic regions? Well it appears to be due to the fact that this business is a family run business; the wife runs the coffee shop area and the husband the oil change bays. There are always people in line.

How do they do it? Word of mouth, customer service and perseverance and now they have built a strong business. You can too, no matter what the circumstances you can over come the odds, beat the heat and make hay. Please consider all this in 2006.

“Lance Winslow” – Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington