[GordonJ]

There are many ways to analyze a business.

I start at the TRANSACTION. How and where does it take place? How does money or value exchange hands?

A look at the past. At SCI, some of the highest GPP or profits came from special events, like the raising of the TITANIC expeditions, or the LEGENDS OF NASCAR or LEGENDS OF COUNTRY MUSIC.

These brought in LOTS of money very quickly. These high priced items, over 2k each needed 50 sales to get 100k in...whereas,

The jewelry dept, selling 19.95 bracelets would have to sell 5,000 units. See?

So the CHOICE a business owner would make might be, fewer customers/higher ticket or many customers/lower price.

Harvey Brody only has a a few (relatively speaking) at maybe 125-150 whereas the SCI jewelry dept. has over 6 million.

Which one do you all think has more slop and mess?

When I was selling resume services for 495.00 dollars the average resume offer was around 49 dollars. So they had to do 10X the number I did.

In golf, I sold a bundle or package of golf lessons or a membership at 250 where as a teaching pro might get 25 for the single lesson.

In a mail order business, I would carefully examine and analyze all the steps leading up to the transaction and what comes after that.

Today, the thought of all of that, tires me out. Can't do it, or certainly don't want to.

My next/newest venture is an already tested and proven money maker by someone else, I just have to make a few presentations, and all the back end/back office stuff is handled for me. I only have one thing to do, tell people about it.

It doesn't get much simpler than that, the online equivalent might be affiliate marketing, but then you compete with millions or certainly scores of people hawking the same products.

But in the real world, I can offer a one of a kind, unique, NEW idea and let it be a take it or leave it offer...I just don't care. NOT interested in selling anything, although I am more than capable of doing that.

Once you look at the TRANSACTION, and then backward chain the events you get to the PROMOTION, and the time and place and to whom it is offered.

One reason franchises are still so popular (although a very bad year) is due to their MARKETING plans, pretty much a paint by the numbers thing based on proven methods.

If someone came to me and said, I want to start a pizza shop or I want to start a mail order business or I want to start an Internet business...

my first question would be; WHY?

I think the biggest mistake made across the board for new business start-ups is, they make the WRONG CHOICE at the very beginning.

It is too often based on what they know, or can do, and very little analysis of the business takes place. Locally, for example, in the last few years we've had several Martial Arts studios open AND THEN CLOSE, and all of them were competent teachers/instructors...but they all had a build it and they will come business mindset.

Sure, a big open space with a few mats is about as low OVERHEAD as a business can get, but the COST of

ACQUIRING A NEW CUSTOMER is most often the biggest expense in any business.

And it is the thing overlooked. I start at the transaction, and then from the gross profit per transaction, I would take 50% off of that, at least, for new customer acquisition and seeing all these little stores come and go tells me, they didn't do the right math to begin with.

TRANSACTION and the steps to get there.
Minus costs.
Gross profits.
Minus overhead.
Maybe equals net profits.

Yet, thousands of new businesses are started every year, and hey, a few of them will even make it.

Gordon