“For easy things, that may be got at will, / Most sorts of men do set but little store.” – Edmund Spenser (Amoretti, 1595)
In a recent issue of Inc. magazine, business expert Norm Brodsky says “given a choice, I’d always go for a hard-access business over an easy-access one,” because “in an easy-access business, the product or service you’re selling will eventually become a commodity, if it isn’t one already. Not that there’s anything wrong with commodities. You’re just severely restricted in what you can charge for them, so you’re forced to operate with much thinner gross margins than those you’d enjoy in a business that is more difficult for competitors to enter.”
An excellent point. So what is best for the person who wants his own part-time, retirement, or second-income business?
I favor staying with a business that’s on the hard-access side of the easy-access range.
Let me explain. A hard-access business would be, for example, starting your own airline. Although you can make a lot of money running a private airline, you risk a lot when you commit yourself to buying and maintaining planes and pilots. I have two friends who went into this business. One had jets that transported human organs. The other had a transport plane that carried spare parts. Both of them were attracted by the prestige of being able to say “my airline” and the financial prospects — seven figures, when successful.
The organ mover got out of his business while the getting was good. The parts transporter is still in it, but struggling mightily to stay afloat.
I wouldn’t want to be in their shoes. And I wouldn’t want to see you in them either. So, for the purpose of contemplating your escape/second-income/retirement business, let’s forget about airlines, car manufacturing, and moviemaking and look at the other end of the range.
Six easy-access businesses about which I happen to have some knowledge are:
* real estate
* resume writing
* graphic art
Each of these businesses can offer you a very lucrative income, and none demands an initial investment of more than, say, $10,000.
Take consulting as an example. Let’s say that you are a marketer in your industry right now, working as an executive for a private company. And let’s say further that you’d like to transition one day from a full-time salaried position to working part-time on a freelance basis.
How would you do it? And how, exactly, should you position yourself?
To set up a consulting business for yourself, you need to do at least the following three things:
1. Identify a common opportunity or problem in your industry that business owners would pay to take advantage of or fix.
2. Contact a bunch of business owners and convince them that you can do that work.
3. Persuade them that the smartest way to hire you is on a freelance basis.
If you have a lot of experience in taking advantage of opportunities or solving problems, and a Rolodex full of good industry contacts, becoming a well-paid industry consultant wouldn’t cost you very much at all. You can make the process even easier and cheaper by taking advantage of the Internet — contacting the market repeatedly through e-mails.
Becoming a consultant is relatively easy. But being greatly in demand and making a lot of money — that’s a tougher task. To be a wildly successful consultant, you need to position yourself at the upper end of the low-barrier range of knowledge.
If, to go back to our example, you position yourself as a marketing generalist, you are going to have to compete with a lot of other marketing generalists out there — and that means you’ll always be struggling against new competitors who are willing to charge much less than you are charging in order to get a foot in the door.
The way to get out of that miasma — and assure yourself of a high income and steady demand — is to develop a specialty that is not so common. You might, for example, decide to become an expert in placing ads on cable television or in secondary newspapers.
By specializing, you reduce the number of people that you are going to compete against and you put yourself on a path to having specialized knowledge (and access) that clients will pay dearly for.
But becoming a specialist takes time and may cost more money. In other words, specialized consulting is the hard-access end of an easy-access business.
That’s a good place to be. You can start out cheaply and develop your expertise and your contacts slowly, while you still have a primary job to back you up.
In the beginning, you’ll do more work for less money. But if you do a good job, your reputation will develop and it will become increasingly easy to attract new clients cheaply, since most of them will come by word-of-mouth.
As you become more in demand, you can raise the price of your services, gradually at first but with surprising steepness when you become — as you will if you play your cards right — the go-to guy for your specialty.
This strategy — being on the hard-access side of an easy-access industry — gives you the best of all possible advantages, for it enables you to:
* start out with very little money
* keep your current job
* get away with making some mistakes
* eventually make a lot of money
* enjoy a business with low advertising requirements
Think about what you are doing now and what you want to be doing in 10 or 20 years. If there is a difference, consider this strategy.
[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]