No, this is not another pyramid scheme. Neither is this a get rich quick idea.
Everyone seems to have an idea or two to make money other than working as an employee for someone else. And there are many who have the grit and will to put it in action. But not everyone succeeds. And there are many who aspire but never wish to perspire to achieve their dreams. Often there are many obstacles, circumstances, and situations in life that does not allow the time or the energy to pursue such dreams. But, these dreams live on.
There are many valid business ideas that could make a million dollars that get buried in these clutter of unfulfilled dreams and ambitions. With various reasons that hinders or stops one from achieving these dreams there is one big factor that prevails. Failure! The fear of investing their money, time and life in an idea that could fail stops many from going ahead. But, having said that, it is also perhaps one of the easiest of factors to overcome. Here I wish to discuss a few simple concepts in the process of developing the fairly secure million dollar idea that would earn you a million dollars.
The million dollar dream building:
For ease of understanding, I am breaking this down to the simplest form based on the basic principles of marketing that would help conceive the concept:
The Million Dollar Math:
To make $10,00,000 one needs to understand this in exact numbers. You need to first have a very clear understanding how this million dollar is actually broken down in terms of units/service (referred to as a “product” here on), and consumers.
A million dollars in other words is ten hundred thousands. That is: $10, 00, 000.
If you wish to make a million dollars for yourself, you will have to sell a product a million times with a $1 profit per unit sold. Simple?
So, if you have a $100 profit margin, then you will have to sell your product only a 10,000 times (ten thousand).
A higher the profit margin, lowers the units to be sold. Remember that this unit could be a tangible product, or a service.
Once you understand this, all you have to do is develop the right product/service and back it with a sound marketing plan. A very good and valuable product with its unique feature at a fair market price based on the target buyers’ affordability will sell. In other words, if you were that target customer, will you buy it and why? As simple as that! In order to make this happen, you will need to know a few simple concepts of marketing. Below are a few simplified yet essential features of a marketing plan.
This is where it is all about you, your skills, creativity and interest. However it is extremely important to keep the user of the product you develop in clear focus and the true “need” or “use” of the product to the end user. While developing the idea of this product one needs to consider these five common things:
- What will the potential buyer want or need this product for?
- Why will this potential buyer buy this product?
- What are the key characteristics of these potential buyers demographics? That is, what is the typical age group, sex, income, affordability, lifestyle, culture, where they live, etc.
- Does your product fulfill a need or a want?
- And are there similar products already there in the market place. If you do not see it, it doesn’t mean it doesn’t exist. A little honest research is very essential.
Next you need to understand the product in detail. The workings of it, the design, the use, the looks, appearance, etc. You need to know your product or service in-depth. You should aim to become a subject matter expert in that product to be safe.
You also need to understand the market and industry of the product or service. You need to study the actual worth of the product. Look for examples of similar products. Understand and learn how they work, why they are priced as such, how they are sold, who buys them etc. You also need to constantly ask yourself why will anyone buy your product or service. What is unique about your product that will compel a buyer to buy your offering from the other seller?
For example: If you think it is a brilliant idea to start-up another On-line Home Rental service offering, where home owners can advertise their rental property and prospective renters can search and rent homes, how does it compare?
- What will you offer differently compared to the other players?
- What will be unique about your service?
- Is that unique offering enticing enough for the consumer to shift their loyalty?
- How many potential renters are there in your city?
- How many rental homes are there in your city?
- What percentage of people go on-line to search rental property from the potential renters?
- How many such on-line sites are there and how many listings are there per site?
- Is there room for another player?
These are some question one needs to ask and study when developing a product or service.
Disposable shaving sticks with blades are cheaper in price and sold in packs with multiple units. But, the individual shaving sticks, from the same manufacturer, comes with few blades. And the user will have to buy the blades separately which are often more expensive than the shaving sticks. Yet there are consumers who choose to buy the individual shaving sticks and blades separately and willingly pay more for the negligible shaving comfort. So the question is, who is your target customer? The one who wants to save money, or the one who is will to pay more? Remember the million dollar math. Higher the profit margin, lower the units to be sold.
You will also need the actual and real cost to market or serve. This means what will it cost you to manufacture this product and bring it to the stage where the potential user/buyer will make the purchase. These typically involves these common costs to consider:
- Cost to develop and make the product
- Cost to package and make the product look desirable
- Cost to sell it (marketing, selling staff, advertising, etc.)
- Cost to deliver (transporting to the place of sale or the customer)
- Over head costs (staff salaries, real estate-rent, utilities etc)
Now once these costs are detailed add-on a realistic profit margin to it. Do not be greedy and over price it, or do not make it too cheap and decrease its value. The price is based on what the target consumer is willing to pay for the product or service based on the value it has for them. It is called “fair market value” or FMV. It simply means that, it is a price a knowledgeable and fair potential buyer will be willing pay for the product or service you offer.
The place you sell or do business in:
I love food. I enjoy all kinds of food, such as Japanese, Arabic, Italian, Indian, Chinese, etc. Hence I love to cook. I can get any recipes from books, Television, internet and my wonderful sister in-laws ultra fantastic recipes and create some amazing and delicious food. But I hate cleaning up. Perhaps that is why many of us choose to get food delivered home. And every once in a while, we choose to go and dine out. Although, we can make many good and great dishes ourselves at home, we choose to go out and pay for it. We opt to dine out, have someone cook some great creations, and serve it to us. And we will pay a price that we fully well are aware is at least 200% more than the cost of it and still leave behind a handsome tip to the waiter. And we do all this for the “experience”!
I walk into several restaurants and wonder why did they even bother? The décor is at best drab, the tables/furniture pretty bare, service is just short of being shot at, and often the food is worse than what I can make if I were drunk out of my senses. And to add to this condition, if one dares to jump over the fence of baffling curiosity and converse with the owner of this business, they will unwaveringly express their disappointment at their customers. They will blame the market, economy, the government, culture, weather, and the dog at their home but never themselves or the state of their place of business.
One of the essential parts to a successful business is its location. Where do you sell your products or service? Is it on-line, is it in a business district, does it have customer parking, does it have a steady or good flow of your target customers, or is your product sold at a retail location, does it have a prominent shelf space etc. These are some of the things you seriously need to consider.
Always remember that the environment or atmosphere usually has a huge impact on the business. There is a very good reason for the kids of music that is played in a supermarket, a fashion retail outlet or in a hotel elevator. Which begs the question, why do some Indian restaurants play sad and depressing music? It usually kills my appetite.
How will you promote your business?
How will you make the customer come to you, see your product or service and make the purchase now? How fast do you want to make your million dollars? Will a one dollar a day pace suffice or do you have a fixed time frame to make your first million dollars? If so, how will you sell those units within that time frame?
There are several creative ways to do this. But no matter how you plan to do this, and come up with new ingenious ideas or traditionally proven methods, you will always have to keep asking yourself this; why will the customer buy from me? Or, put yourself in the customer’s shoes and see if your promotional idea invokes you to make the purchase. Until the numbers shows in sales, keep developing these ideas. Whether it is a free promotional offer, a special discount, a limited time offer, a free gift, it has to make sense to the buyer.
I remember a Photography Film Processing Lab not so long ago before the digital photography industry killed their business. The owner of this lab came up with a new and different idea to promote his business. He bought a consignment of promotional products from a liquidation dealer. And he charged $0.50 cents more per print to process a film roll and would give each customer a random number to pick. Based on the number the customer could win anything from a key chain, to a television. His store will packed with these floor to ceiling promotional goods and a beeline of customer all through the mall. 3 months later the promotion died, but the beeline lasted a few good years.
Similarly, you would buy your child a Kids meal at McDonald’s knowing that they won’t eat the food, but the free toy will shut them up for a while.
That’s promotion in a nutshell.
So, what is your Million Dollar Idea?
It doesn’t have to be what everyone does, or something that has never been done before. It has to be good, realistic, and positioned appropriately. More than anything else, you will have to believe in it based on realistic numbers and research. There are several brilliant products and services that were once laughed at or criticized but is one of the most successful ideas or products in today’s world. A personal computer in every house was once such a dream of a famous individual. Build your million dollar dream and make it happen!
Some select Quotes to remember!
And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.
As a small businessperson, you have no greater leverage than the truth.
John Greenleaf Whittier
Do more than is required. What is the distance between someone who achieves their goals consistently and those who spend their lives and careers merely following? The extra mile.
Gary Ryan Blair
Do not trust people. They are capable of greatness.
Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.
Every young man would do well to remember that all successful business stands on the foundation of morality.
Henry Ward Beecher
Failure doesn’t mean you are a failure it just means you haven’t succeeded yet.
Robert H. Schuller
If you listen to your fears, you will die never knowing what a great person you might have been.
Robert H. Schuller
If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.
J. Paul Getty
In modern business it is not the crook who is to be feared most, it is the honest man who doesn’t know what he is doing.
Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.
No enterprise is more likely to succeed than one concealed from the enemy until it is ripe for execution.
Not for nothing is their motto TGIF – ‘Thank God It’s Friday.’ They live for the weekends, when they can go do what they really want to do.
Richard Nelson Bolles
Nothing so conclusively proves a man’s ability to lead others as what he does from day to day to lead himself.
Thomas J. Watson