Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
One of my best friends of 9 years is really good at business. She makes over 300k a year. ( that was 2 years ago. I haven't asked for an update) She's all about making money for the challenge. She complained a few years ago that some people she knows make a million a year. I'm a bit older and thought she was being unrealistic. But now not so much. I can see how that is possible if you are smart and can follow through on an idea for several years. Do you think making a million a year is possible for a smart dedicated person?
yes. why wouldn't it be possible? What type of business it is will help to tell if its a bit more plausible or not though but it is 100% possible to run a business and make a mil a year.
Volume of sales / dollars per transaction are key...
There are folks that work in fields were the compensation per transaction is well into the six figures. Do ten or so such deals per year and their is you million...
Other folks own businesses were the profit per transaction is just a fraction of a cent, needs to be a whole different rate of transactions per second to get to a million dollars
There are folks that work in fields were the compensation per transaction is well into the six figures. Do ten or so such deals per year and their is you million...
Other folks own businesses were the profit per transaction is just a fraction of a cent, needs to be a whole different rate of transactions per second to get to a million dollars
yes, that makes sense.
i am comparing the business i'm starting to my competitors. i've been in this line of business for about 10 years, but haven't pushed for wholesale sales, because I was waiting to makes some changes to the product which would allow for easier production in larger volumes. that puts me at an advantage against my competition.
here are the numbers:
100 stores dispaying products x 2 units sold per month per store (pretty conservative) x $550 profit (after variable cost) = $110,000 per month - about $20,000 in fixed cost = $90,000 per month or $1,080,000 per yr.
The fixed cost could be as low as $1,500 a month. i raised to 20k, because i would hire an office manager, rent a bigger place and for marketing support for the stores. 100 stores is actually a tiny bit of the market. there are 10,000+ stores that could sell my products in the US.
yes. why wouldn't it be possible? What type of business it is will help to tell if its a bit more plausible or not though but it is 100% possible to run a business and make a mil a year.
i don't want to say exactly. it's a product i design and manufacture. it's something that a large portion of the population purchases, but it's a niche part of that market and it's higher end. the nice part too, is that while it's a niche part of the market, there is a giant hole in the market, design wise. the bulk of products are very plain, this niche is the opposite and there is not much in the middle. i could take a big chunk in the middle, in theory.
i don't want to say exactly. it's a product i design and manufacture. it's something that a large portion of the population purchases, but it's a niche part of that market and it's higher end. the nice part too, is that while it's a niche part of the market, there is a giant hole in the market, design wise. the bulk of products are very plain, this niche is the opposite and there is not much in the middle. i could take a big chunk in the middle, in theory.
The key words there are IN THEORY.
Quote:
Originally Posted by FelixTheCat
here are the numbers:
100 stores dispaying products x 2 units sold per month per store (pretty conservative) x $550 profit (after variable cost) = $110,000 per month - about $20,000 in fixed cost = $90,000 per month or $1,080,000 per yr.
The fixed cost could be as low as $1,500 a month. i raised to 20k, because i would hire an office manager, rent a bigger place and for marketing support for the stores. 100 stores is actually a tiny bit of the market. there are 10,000+ stores that could sell my products in the US.
Maybe those numbers are realistic, maybe not. I have known lots of people who write numbers like this and start drooling at all the money they could THEORETICALLY make. They spend lots of time dreaming about all the stuff they'll be able to buy with all that theoretical money. Of course, they never get around to actually WORKING to put their plan into action (and that usually means starting small).
I don't mean to be discouraging. Why not try it on a small scale instead of projecting what "might" happen so you "might" make a million a year?
I'm assuming you're referring to what the owner makes for their own personal income, not gross revenue. I know only of a few people personally who have made a million in a year from businesses they've founded.
One is a client of my uncle's. His father founded a grocery chain which is now among the largest employers in the region. The company is still private. He's never disclosed his income to my uncle, but my uncle is estimating the guy makes around six figures a day for himself, due to profit margins at similar businesses as well as the chain's size. The man has a nice home on an area lake, but has never been flashy, especially relative to his wealth.
A person I grew up with is 25 and founded his own software development business less than five years ago, started additional companies, and these businesses have grown. He made $600k last year and tweeted that if 80% of his business were gone, he'd still be up 300% from last year. He'll probably make well over a million for himself this year.
It all depends on two things: Ownership and productivity.
It you are an owner, then it is up to you to organize matters so that your organization grows quickly and sustainably, earning exceptional profit while you're at it. Keep your overhead low, have a killer sales force, bust your ass to bring in A Level Talent at all echelons. Because for that kind of growth you have to let go and let the people under you do open field running.
If you are not an owner, then you better be in a field such as sales, working for a company that doesn't try to stifle earnings of its sales force.
Commercial real estate is an excellent example. I know guys who literally make in excess of $1,000,000 a year in commissions. Those guys might have starved early in their careers due to the long sales cycle, but they do great now.
In fact, if you are in residential real estate and manage to sell $25,000,000 a year, then you'll make that kind of money, too. I know a couple of residential real estate agents like that as well. One woman, who is a freaking machine, sold $64,000,000 in real estate last year. That's an average of one $500,000 sale every 3.5 working days. Of course, she does nothing but work. She has two mobile phones going at once and has a personal assistant provided by the brokerage. At the same time, she is very choosy about whom she works with. If your house isn't in shape to sell, she won't work with you. If you can't make a decision, she'll drop you like a hot potato. But if you're selling your house, she'll do her level best to wring the best possible offer out of the buyer.
Maybe those numbers are realistic, maybe not. I have known lots of people who write numbers like this and start drooling at all the money they could THEORETICALLY make. They spend lots of time dreaming about all the stuff they'll be able to buy with all that theoretical money. Of course, they never get around to actually WORKING to put their plan into action (and that usually means starting small).
I don't mean to be discouraging. Why not try it on a small scale instead of projecting what "might" happen so you "might" make a million a year?
I am starting on a small scale. I will add one store at a time. I've sold to stores on a small scale already, but with different products. I didn't actually market to them. They looked for me.
I know you don't just go from A to Z. You have to take all of the small steps to get there. I enjoy the process of doing that. I don't really care about the money itself, beyond what will give me a comfortable but not extravagant lifestyle. I'm a competitive person, but it's more about doing the best job, not about obtaining a fancy lifestyle.
I am starting on a small scale. I will add one store at a time. I've sold to stores on a small scale already, but with different products. I didn't actually market to them. They looked for me.
I know you don't just go from A to Z. You have to take all of the small steps to get there. I enjoy the process of doing that. I don't really care about the money itself, beyond what will give me a comfortable but not extravagant lifestyle. I'm a competitive person, but it's more about doing the best job, not about obtaining a fancy lifestyle.
I respectfully disagree. If you have a product that retailers really want that's unique, then you better get big in a hurry lest a) Somebody with capital notices your product and does a knock off and b) the bloom falls off the rose. The only way to avoid either of these two contingencies is to get intellectual property protection for your product and invest in building a brand in order to achieve some kind of desirable margin. For while your product might be the greatest thing since sliced bread right now, it won't take long for someone to come along and make something that's a little better and a little cheaper. Happens all the time. If you don't believe me, ask the folks at Apple about how safe they feel about the iPhone's market position right now.
The other thing is that I think your costs projections feel unrealistic. You'll need more than an office person to cover that number of retailers and you'll really face a lot of downward price pressure. You'll need a sales person to achieve the kind of volume you anticipate and to manage the relationships. You'll need a production manager. You'll need someone to make sure the finances work correctly. So you need to be prepared to staff up and boost your production in a hurry in order to achieve those kinds of numbers.
Don't mean to be the downer here. But one of the biggest mistakes you can make is overestimate profit and underestimate expenses.
Further, never ever look at an initial trend line and extrapolate that number out indefinitely. It just doesn't work that way.
Last edited by cpg35223; 06-18-2013 at 01:18 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Volume of sales / dollars per transaction are key...
