Hi Mike,

Thanks.... Lots of good lessons here !

> 1. No matter what business you are in now
> you have to be ready to change overnight if
> you are interested in making money.

That's true.... This is often stated to be the advantage small businesses sometimes have over large ones. Some large businesses can be very bureaucratic, and can take a while to change enough to jump in to new opportunities. It's often easier for a small business to beat them there and get a head start....

> 2. Many variables of success can't be
> controlled, heck you can't even
> "foresee" many of them. These
> folks will readily admit they never
> "business planned" things to work
> this way... there is no way you could. They
> seen opportunities and instead of spending
> tons of time analyzing them they went
> forward, made mistakes as they went and
> learned lessons along the way.

Yes! Changes in tastes, changes in regulations, changes in technology can all produce opportunities. In fact, any kind of change is an opportunity for someone.... Not everyone will be in the right position to take advantage of it, but it's good to keep in mind that any change in how things are done is usually an opportunity for somebody to make money from it.

> 3. It's good to be in an industry that has a
> high entrance cost to competitors. This was
> the reality for the knockdown furniture
> business back in the 70's and 80's. Now it's
> not the case. This is a big problem with
> many business ideas... Competition is the #1
> reason for diminishing profits. If you're
> stuck in an industry or business that offers
> little in the way of barriers to entry then
> expect your ability to earn profits to be
> diminished.

Yes, though it's not always easy to get into an industry with high barriers to entry (since often those "barriers to entry" will also apply to you!).

I think the easiest way to have an area of business largely to yourself is to target a niche which isn't yet being targeted....

> 4. It's easy to grow when you sell to
> industries that are growing themselves. They
> just sort of suck you up and drag you along.
> This is probably the easiest way for any
> business to grow. You don't have to create
> your own momentum.

This makes me think of Levi Strauss. He got rich from the gold rush - but not by finding gold.

In San Francisco during the gold rush in the 1850s, he had some canvas which he was hoping to sell to a tent-maker.

A miner approached him and asked him if he had any pants to sell. There was a shortage, since ordinary pants were quickly worn out by the gold prospectors.

Strauss then had the idea to make some tough pants out of canvas - and "Levi's" were born. He got rich selling his product to the "growing" group of gold miners!

Thanks Mike - some great business truths, illustrated by a great true story! I appreciate it a lot....

You can never read too much about these kinds of things. :)

- Dien Rice