Hi George,
Daniel Scocco here, and this is the Daily Blog Tips newsletter.
The tech revolution brought along its changes a feeling that one
must be young, really young, to become successful. You either hit
it big before you reach the age of 30, or you must accept that you
are destined for a modest life of modest achievements.
The argument is straight forward: younger people tend to think
outside the box and challenge the status quo, so it's easier for
them to come up with revolutionary ideas. Second, younger people
have more energy and stamina, so it's easier for them to achieve
high performance levels, be it intellectually or physically.
Backing up this argument we also have plenty of famous examples:
-Steve Jobs was 21 and Steve Wozniak was 26 when they founded
Apple. Within four years Apple went public and made both
millionaires (along with 300 other employees and investors...).
-Bill Gates and Paul Allen were respectively 21 and 23 when they
founded Microsoft and started writing software for hardware makers
like MITS and IBM.
-Both Larry Page and Sergey Brin were 23 when they started working
on the research project that would later become Google. By their
30th birthday they were already billionaires.
-Mark Zuckerberg was 20 when he launched Facebook out of his dorm
room in Harvard, becoming a billionaire at age 28.
That's pretty much all the evidence we need to conclude that you
either hit your home-run while you are young or you won't hit one
at all. Or is it?
I was not quite convinced, and I started reading more on the topic.
Here are some of the stories I found.
Asa Griggs Candler was born in 1851 in Georgia, USA. He was a
drugstore owner, and while his business was going well, he wasn't
rich by any means. At age 37 he came across a medicine that was
sold for five cents a glass and that was supposed to help with
several diseases. He purchased the formula for $500, and decide
that he would sell it as a soft drink at stores, restaurants and
vending machines. The name of the drink? Coca-Cola.
Harland Sanders lost his father at a young age, and since his
mother had to work he was assigned the task of cooking for his
whole family. Over the years he had several jobs, including
salesman and car driver, but he always kept his passion for cooking
alive. At age 40 he opened a gas station, and there he also served
meals for customers. The business wasn't that good, however, and at
the age of 65 he was forced to close it down. He took $105 from his
first social security check and decided to use it to launch a
franchise, offering his special recipes. The franchise was called
Kentucky Fried Chicken, or KFC. Today KFC serves more than 12
million customers daily...
Raymond Albert "Ray" Kroc was born in 1902, and until his 50s he
held a myriad of jobs. Those ranged from radio DJ to and paper cup
salesman and jazz musician. The last one was milkshake machine
salesman. That's when he started traveling around and getting to
know the restaurant business. On one of those travels he discovered
a restaurant owned by two brothers that had a really interesting
concept: to serve customers as fast as possible using a carefully
crafted production line. Ray became a partner and transformed the
restaurant into a franchise. As you probably guessed, it was called
McDonald's.
There are several other examples in pretty much every area.
Harrison Ford didn't have much success as an actor early on, and he
decided to work as a carpenter to support his family. He got hired
to build some cabinets for director George Lucas, and that's how he
got his first big role, as Han Solo in Star Wars, at the age of 35.
Willian Shockley was 38 when he helped to invent the transistor,
one of the biggest inventions of our time. Gandhi was 61 when he
started the nationwide protests in India against the British
government. Grandma Moses began her painting career in her 70s
after abandoning a career in embroidery because of arthritis.
In other words, it's never too late to go after your dreams, to
become successful and to change the world. What's your excuse now?
Talk to you next week,
Daniel Scocco
http://www.dailyblogtips.com
----------
2972 Columbia St. Suite # 8161 - Torrance, CA 90503 - US
To unsubscribe or change subscriber options visit:
http://www.aweber.com/z/r/?7KwMzJyMtKyMrBxM7OzstGa0jKys7AwMrGw=
Tuesday, January 22, 2013
Tuesday, January 8, 2013
George, Are Focusing on Services or Products?
Hi George,
Daniel Scocco here, and this is the Daily Blog Tips newsletter.
As an entrepreneur you have basically two routes to follow: you can
either provide services or products (providing both at the same
time is also an option, but very few people manage to do it
effectively, so let's not consider this option for the sake of
simplicity).
By "services" I mean work you'll do on behalf of your clients. They
give you some money, and in exchange you perform a certain task for
them. Examples include web design, SEO consulting, hair cuts, car
washing, software development, electronics repairing, house
painting and so on.
By "products" I mean selling something the clients will use
themselves. They give you some money in exchange for something
tangible they can use to perform a certain task. Examples include
ebooks, shoes, computers, courses, bread, mobile apps and so on.
Both models can be profitable, and there are millions of companies
around the world on each of those camps. However, the money you can
make using a product-based business model is orders of magnitude
larger than with a service-based model.
Why? For a simple reason: the potential revenue of a service-based
model is limited on the supply side. That is, your earnings will be
limited to how many hours you (or your staff) can work, and there
are only so many of them in a day/month/year. The potential revenue
of a product-based model, on the other hand, is limited on the
demand side. That is, the earnings will be limited to the amount of
people who are willing to buy the product.
Let's compare two companies. Company A offers house painting
services, while company B produces and sells paint. The revenues of
company A will be limited to the number of painters the company has
on staff, and to how many hours each painter can work in a
day/month/year. The revenues of company B, on the other hand, are
limited to how many people are willing to buy its paint, which is
potentially everyone in the world.
One could argue that company A can keep hiring/firing painters to
match the demand, limiting its revenues exactly to the demand as
well. But that is not viable in the real world. Hiring and managing
people is far more complex and expensive than managing the process
of creating products.
Obviously money is not everything, and some entrepreneurs will
prefer to run a service-based company. That's fine. On many cases,
however, both models will be equally rewarding to the owner, and
switching to a product-based one will increase the profits and give
you more flexibility at the same time. I find this to be the case
especially with small businesses.
Suppose you are a web designer, and you charge $100 per hour of
design work. You work 30 effective hours per week, so 120 hours per
month, with revenues of $12,000 per month or $144,000 per year. Not
too shabby. Now suppose you switch to a product-based model, and
you spend your next two months creating a WordPress theme. You
price it at $49 per license, and during the first month you sell
100 copies, so $4,900 during that month. Over the next 10 months,
however, sales grow 30% per month. By the end of the year you will
have sold over 4,000 licenses, pulling a total of $208,602. Not
only that, you'll be able to keep profiting from that product for
years to come.
Bottom line: you can have a viable business model either offering
services or products, but the latter tends to be much more
profitable, so evaluate your current strategy to make sure you are
not leaving money on the table.
Talk to you next week,
Daniel Scocco
http://www.dailyblogtips.com
----------
2972 Columbia St. Suite # 8161 - Torrance, CA 90503 - US
To unsubscribe or change subscriber options visit:
http://www.aweber.com/z/r/?7KwMzJyMtKyMrBxM7OzstGa0jKzMbGzsDMw=
Daniel Scocco here, and this is the Daily Blog Tips newsletter.
As an entrepreneur you have basically two routes to follow: you can
either provide services or products (providing both at the same
time is also an option, but very few people manage to do it
effectively, so let's not consider this option for the sake of
simplicity).
By "services" I mean work you'll do on behalf of your clients. They
give you some money, and in exchange you perform a certain task for
them. Examples include web design, SEO consulting, hair cuts, car
washing, software development, electronics repairing, house
painting and so on.
By "products" I mean selling something the clients will use
themselves. They give you some money in exchange for something
tangible they can use to perform a certain task. Examples include
ebooks, shoes, computers, courses, bread, mobile apps and so on.
Both models can be profitable, and there are millions of companies
around the world on each of those camps. However, the money you can
make using a product-based business model is orders of magnitude
larger than with a service-based model.
Why? For a simple reason: the potential revenue of a service-based
model is limited on the supply side. That is, your earnings will be
limited to how many hours you (or your staff) can work, and there
are only so many of them in a day/month/year. The potential revenue
of a product-based model, on the other hand, is limited on the
demand side. That is, the earnings will be limited to the amount of
people who are willing to buy the product.
Let's compare two companies. Company A offers house painting
services, while company B produces and sells paint. The revenues of
company A will be limited to the number of painters the company has
on staff, and to how many hours each painter can work in a
day/month/year. The revenues of company B, on the other hand, are
limited to how many people are willing to buy its paint, which is
potentially everyone in the world.
One could argue that company A can keep hiring/firing painters to
match the demand, limiting its revenues exactly to the demand as
well. But that is not viable in the real world. Hiring and managing
people is far more complex and expensive than managing the process
of creating products.
Obviously money is not everything, and some entrepreneurs will
prefer to run a service-based company. That's fine. On many cases,
however, both models will be equally rewarding to the owner, and
switching to a product-based one will increase the profits and give
you more flexibility at the same time. I find this to be the case
especially with small businesses.
Suppose you are a web designer, and you charge $100 per hour of
design work. You work 30 effective hours per week, so 120 hours per
month, with revenues of $12,000 per month or $144,000 per year. Not
too shabby. Now suppose you switch to a product-based model, and
you spend your next two months creating a WordPress theme. You
price it at $49 per license, and during the first month you sell
100 copies, so $4,900 during that month. Over the next 10 months,
however, sales grow 30% per month. By the end of the year you will
have sold over 4,000 licenses, pulling a total of $208,602. Not
only that, you'll be able to keep profiting from that product for
years to come.
Bottom line: you can have a viable business model either offering
services or products, but the latter tends to be much more
profitable, so evaluate your current strategy to make sure you are
not leaving money on the table.
Talk to you next week,
Daniel Scocco
http://www.dailyblogtips.com
----------
2972 Columbia St. Suite # 8161 - Torrance, CA 90503 - US
To unsubscribe or change subscriber options visit:
http://www.aweber.com/z/r/?7KwMzJyMtKyMrBxM7OzstGa0jKzMbGzsDMw=
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