Saturday, March 29, 2008
We talked about starting a profitable eBay business in December 2003, and the advice I dispensed then still applies today. The most successful eBay sellers are those who understand that success on eBay relies on many of the same factors as success in a brick-and-mortar business. Smart sellers:
Research the marketplace and the competition to determine the salability and profitability of the product.
Test the market with one or two units before committing to a product line and tying up their cash reserves in inventory that may never sell.
Adjust their product offerings until they find a product or product line that sells consistently.
Know that long-term eBay success doesn't come from "one off" sales. The key to real eBay success is to find a product that sells well and sell that product over and over again.
I asked Timothy Mina, author of The Online Auction Expert's Bible to Selling on eBay, his thoughts on launching a successful eBay business. "With an eBay business, you set your own hours and set your own goals," Mina says. "You can work as much or as little as you want and whenever you want. Many sellers supplement their income by selling on eBay, and many others have turned it into a full-time business."
Mina cites the following reasons for eBay's growing popularity among entrepreneurs who want to start an online business:
You can start up quickly and you don't need special skills.
There is very little risk and investment required to get started.
The marketplace is huge. There are millions of potential customers waiting to buy what you're selling, 24/7, with the click of a button.
There's less stress and no boss. Yes, there is work involved, but the work can be done at your own pace. You are your own boss and you set your own schedule.
You can follow your passion and do something you love. If you sell something you enjoy selling, online auctions aren't just profitable, but also fun and exciting.
Mina recommends creating your eBay business with niche items, especially if you're going to rely on eBay as your primary source of income. According to Mina, there are many benefits to targeting a specific niche market:
When you find a profitable niche, you'll become a certified guru of the items you sell and ideally be the only one on eBay offering the products.
Your expertise will make it 10 times as easy to spot bargains when you're shopping for products to resell. Bargains might be all around you, but if you don't know anything about what you're selling, you won't know how to spot bargains that are right in front of you.
You'll find different ways to add personal value to your products. These low-cost add-ons or unique twists to your products will drastically increase your sales and profits by making your items unique and desirable.
You'll have little or no competition from other sellers, so you can corner your niche market.
By dealing with the same type of customer over a long period of time, you'll get to intimately understand the mindset of your target customer and what your customer wants. This will help you sell your products better and allow you to market your products in ways others haven't thought of.
You'll be knowledgeable and enthusiastic about what you sell, and you'll be attentive to your customers' desires. This results in satisfied customers, name recognition and a lot of repeat business.
You're going to find something you're passionate about and specialize in it. If you love what you're doing, you have a much greater chance of sticking to it and loving it. It won't even feel like work-it'll be like you're getting paid to play.
So how do you find your niche? Mina recommends doing an inventory of your hobbies and interests to help you identify a niche you would enjoy working in. Answer these questions:
What are you passionate about?
What do you collect?
What do you like to read about?
What do you do in your spare time?
Do you have a favorite pastime?
What was your major in college?
What jobs have you had?
Are there any other fields in which you have a great amount of knowledge?
What clubs do you belong to?
Mina also recommends that you spend time on eBay studying the category listings. This may give you additional ideas for hobbies you can turn into an eBay business.
Once you've defined your hobbies or interests, brainstorm how you can turn them into a business.
How can you turn your expertise into a product?
How can you add value to current products related to your interest?
What products can you sell that may be one-of-a-kind and have little or no competition?
Can you think of novel ideas that people who share your passion would love?
Is there anything related to your hobby that you can create yourself (such as an e-book or a how-to, perhaps)?
By Tim W. Knox
Target the right client/customer
Check your capacity
Fine-tune your product/service mix
Evaluate your focus
Review your pricing strategy Once you've answered the questions under each item, you are better able to identify realistic revenue goals for the unique situation of your business. Target the right client/customer Your great product or service won't sell if you are targeting the wrong person.
Do you have a client/customer profile?
How did you select your target market?
Do they want the services/products you are offering?
Can they afford your services?
How are you reaching your target market? Do they know the range of your services? Check your capacity
What is your capacity?
In other words, how many services can you provide in a week/month if customers were banging at your door?
How many products can you actually deliver/distribute?
Be reasonable about the number of hours you would put in to make this happen.
Is your business scalable?
Do you work alone or do you have employees (how productive are they)?
How are you using your time? Can you outsource small or administrative tasks?
Back to scalability. Example: E-book revenues require no real work after the book is written and posted to the Internet. Workshop revenues are limited by things like room size, your ability to travel, cost to produce, or hours in the day. Fine-tune your product/service mix
What are you not offering that your clients need?
Are there services or products that would compliment your offerings?
Have you limited your services based on what you think others will buy without really knowing?
Do you offer enough variation in your product/service to meet the needs of potential clients? Evaluate your focus
Are you spending the bulk of your time promoting and delivering a service that does not have high profit potential?
What is your sales history (amounts, customers, trends [months, weeks, days])?
What sells well? Why? What does not sell well? Why?
Are you cross-selling? Up-selling? Review your pricing strategy
How have you priced your products and services? What strategy are you using? How does it fit into your overall strategy?
What is the net profit for each product or service (Be careful about assuming that if you didn't outlay cash to provide the service that it's all profit.)
How have you packaged your services? Can you bundle? Use these questions to get started identifying strategies, changes, and new ideas to generate the revenues that you have targeted.
by Dianne E. Dawson, M.A.
Thursday, March 27, 2008
Ensure Your Child's Financial Success
If you've been telling your children, "Go to college, get good grades and work at a large company until you retire" you may be dooming them to a paycheck to paycheck existence. The road to success will be very different for our children than it was for our parents. Our children cannot rely on life-time employment and retirement checks.
What is the answer? According to Robert Kiyosaki, the best selling author of "Rich Dad Poor Dad," we must stop raising our children to think like employees and must instead teach them to think like business owners and investors. Their ability to understand the importance of creating passive income from investments, real estate, as well as investing for retirement is paramount to their future financial success. Skills that wealthy investors have always had are now essential to our children's long-term financial health.
We caught up with Mr. Kiyosaki, as he was traveling through Australia on a speaking tour, and asked him to share with us, how parents can raise their 's financial IQ and why we absolutely must!
Interview with Robert T. Kiyosaki
Robert Kiyosaki is the author of "Rich Dad Poor Dad," and best seller that focuses on what the rich teach their kids about money that the poor and middle class do not. He is also the creator of one of our favorite board games, "CASHFLOW for Kids." Although Robert's business is real estate and developing small companies, his true love and passion is teaching. He is a highly acclaimed speaker on financial education and economic trends. His life-changing work has inspired audiences from 50 to 55,000 throughout the world.
Editor: Mr. Kiyosaki, often, parents tell their children that the key to a successful future is to "pay attention in school, get good grades, go to college and then get a good job in a large company." That "good job" is supposed to provide them with the American dream--a big house filled with nice furniture and two cars in the driveway. Why do you think, that after following these rules and working hard to achieve the American dream, are millions of Americans living paycheck to paycheck?
Kiyosaki: The rules have changed today but many of us, as parents, keep giving the same advice to our children "Go to school, get good grades so you can get into a good college and get a good job with a good company that offers good benefits." This advice was good during the Industrial Age but is no longer applicable for the Information Age.
Young people graduate from college and get good jobs. They begin to make money, credit cards arrive in mass and the spending begins. They meet other young people, date, fall in love and get married. Life is wonderful because now they have two incomes. As a successful couple they decide to buy a house and two cars, and have children. A pay raise comes in and they decide to buy a bigger house, because someone told them they can get a tax break from the interest. They realize they need to start saving for their children's college education so they work harder to make even more money.
This happy couple is now trapped in the Rat Race for the rest of their working days. They work for the owners of their company, for the government paying taxes, and for the bank paying off a mortgage, car "study hard, get good grades so they can find a good job." The process repeats itself creating another hard-working generation.
The only way to get out of the "Rat Race" is through financial education. You must learn about money, accounting and investing.
Editor: What do the rich teach their children about money that is not taught in our schools?
Kiyosaki: In my book "Rich Dad Poor Dad," I tell the story of growing up with two fathers. My real father was a highly educated man who died poor. My best friend's father never finished the eighth grade but became one of the richest men in Hawaii. Both men were very influential in shaping my education and attitude about money. My poor dad would say, "I can't afford it," while my rich would say, "How can I afford it?" I chose to follow my rich dad's advice about money.
In "Rich Dad Poor Dad" I share the six basic lessons about money that my rich dad taught me. These lessons are not taught in school:
1. The rich don't work for money. "The poor and middle class work for money. The rich have money work for them,"he would say to me. The rich buy or create assets that work for them so they don't have to.
2. Why teach financial literacy? You need to understand the difference between an asset and a liability. An asset puts money in your pocket and a liability takes money from your pocket. The rich understand the difference and buy assets, not liabilities.
3. Mind your own business. Many people confuse their profession with their business. To become financially secure people need to mind their own business. Your business revolves around your asset column, as opposed to your income column. The rich focus on their asset columns while the poor and middle class focus on their income columns.
4. The history of taxes and the power of corporations. The Tax Code of the United States provides many usually look for them and use them because they have learned to "mind their own business." For example an individual can utilize the tax advantages and protection provided by a corporation to get rich much faster than someone who is an employee or a small-business sole proprietor.
5. The rich invent money. Great opportunities are not seen with your eyes. They are seen with your mind. Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them. The rich have learned to recognize opportunities as well as how to create them.
6. Work to learn--don't work for money. To become successful you must learn how to manage cash flow, systems and people. Being in the Marines taught me leadership and working in sales for Xerox taught me how to sell and how to accept rejection. All of these skills were important for my success. Look for jobs that can help you develop the skills of managing cash flow, systems and people rather than just pay you well.
Editor: In your book, you tell the story of how a friend of yours turned his teenage son's desire for a car into a great financial education. Will you share this with our readers?
Kiyosaki: A friend of mine had a sixteen-year-old son who desperately wanted a new car. Since all of his friends' parents had bought their sons cars, he expected my friend to buy him one as well. After playing my game CASHFLOW my friend decided to use his son's desire for a car as a learning opportunity. He gave his son $3000 but told him he could not use it directly for the car. He also gave him a subscription to the Wall Street Journal. He told his son that once he earned an additional $6,000 from investments he could use the $6,000 for the car and the $3,000 would go into his college fund. My friend said it was the best $3000 he ever spent. Not only had his son gained a new respect for the power of money, he also learned to spend money wisely instead of letting money burn holes in his pockets.
Editor: This is a creative way to teach teenagers about finance. Can you suggest a way to help younger children develop strong money skills?
Kiyosaki: There are three very important money skills that everyone should possess: how to earn money, how to manage it and how to invest it. Our product, CASHFLOW for KIDS is a three part program for parents and teachers wanting to teach children these important skills. It includes the board game, an audio tape and book for parents titled, "How to Increase Your Child's Financial IQ." The board game teaches children the basics of all three money skills through role-playing. By playing the game, children will learn the vocabulary of money and the basics of financial statements.
Once they understand the concepts of income and expense and asset and liability they can start developing their own financial statements. On the audio tape we discuss having your children invoice you for their various chores in lieu of giving them an allowance, as well as having them keep track of their expenditures. It is this process that they learn the value of their time and the difference between working hard for money and having money work hard for them. If your children learn to develop their own financial statements at an early age, they will be better prepared to succeed financially as adults.
Editor: As we enter the fast-changing and complex 21st century, why now, more than ever, must parents help their children develop financial intelligence?
Kiyosaki: In the Industrial Age the ticket for success was to go to school, get good grades, and find a safe secure job for life. You did not have to worry about your financial education because the company and the government would take care of you once your working days were over. The rules have changed. You can no longer rely on your employer or your government to take care of you.
Today, we are in the Information Age and more than job security we all need financial security. Unfortunately, our school system teaches us little about the subject of money. Our children will be required to learn much more than we ever did, and much more than schools are prepared to teach them. Cash flow management is an essential life skill and a skill that will require more and more sophistication as we move further into the Information Age.
Resources to Help You Raise Your Child's Financial IQ
"Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That The Poor and Middle Class Do Not" by Robert T. Kiyosaki and Sharon. Children start learning about money at a very early age by watching and listening to their parents. But how can we be a good financial role model for our children when we don't have these skills ourselves? "Rich Dad Poor Dad" is written in simple terms, yet it can quickly teach you how to build a strong financial future for yourself and your children.