Journal 5 – Closer to Launch

For the last two weeks, I’ve been working on the The Start Up Business Guide, Flat-Fee MLS (Project 2), and Flipping (Project 1).  I even explored selling on Amazon as my third project.  I also spend countless hours trying to wade the Navy Reserve Order Writing System to support an exercise planning conference in Algeria next month.

Launch!

I am getting closer to starting up project 2, as well.  I’m currently working on the web site.  I hope to start up in two to three weeks.  Check out Project 2’s business plan in the membership area.

Start Up Guide

The guide is closer to being ready for use by wannabe start ups.  I think it’s become a resource that can help those wanting to own their world – as an entrepreneur.  The deal with creating a start up guide is trying to make it generic enough for most businesses but specific enough to be a useful guide.  There are businesses that will not fit in this step-by-step guide, for example home flipping doesn’t necessarily fit well into it.  I completed Phase I for home flipping and it did fit well enough, but I see issues in Phase II. Phase III will be a mixed success.  I guess that is okay, since it isn’t for a particular industry.  I’ll let you know in later journal entries how it fits with all my project businesses.

Flat Fee MLS

Project 2

I completed the Flat-Fee MLS business plan, using the guide as its go-by.  I can tell you that I’m glad I suffered through the guide because it made me put my ideas into writing and it made me really think about the “hows” and the nuts-n-bolts of setting it up.

I say “suffered through” because the business is quite simple.  I’m sure I could start it without such a detailed plan, but I have to say that the process really got my mind on the business.  The customer theory, the SWOT analysis, and the profit and loss statement made me lay out what I (kind of) already knew.  The business may not be as profitable as I hoped, but it will do well I think.  The guide also make me consider branding and the marketing mix — more than I would have otherwise.  The SWOT analysis was a useful exercise to examine my competition.  I saw a lot of holes that I can fill!

There weren’t too many surprises.  I was a little surprised by how little the average Idahoan household earned.  What they earn and the amount of debt load limited the size and price of a home.  When I did projections of higher interest rates (for fun), I saw just how much that impacted the affordability of a typical home.  When interest rates begin to rise (again) many families will have to settler for a lot less.  Without a mortgage, most Idahoans would be renters for life.  After the 2007/08 recession renting started to look better than ever: it provides location flexibility, shields the renter from price declines, foreclosure, bankrupcy,  and maintenance issues and costs are born by someone else.

Home Flipping 

Project 3

Bathroom Rehab

Bathroom upgrade.

Researching the demographics of MLS user and home buyers directly related to my flipping business.  I see the future becoming more competitive as investors and other buyers enter the market.  The foreclosure market is shrinking every year and this year will be the tightest since 2007.  It will continue in to later years.  That means the easy flipping money is getting harder to find.

Upgrades

I am upgrading the bathrooms in my flipper property.  I’m installing granite counter tops.  It’s not hard but it’s not that easy either.  There are a lot of drywall patching and plumbing issues that arise as one dismantles the sink system.  But patience and persistence rules the day.  Bathroom 1 is done and bathroom 2 is about 50 percent complete.  I hope to list it in a week or two.  See the photo of the first completed bathroom.

Amazon

Project 1

I spend two weeks researching a business idea:  Being a merchant seller on Amazon.  I’ve been on Alibaba, Amazon, Terapeak, and eBay trying to find a product with demand that has a sufficient profit margin to try out.  I need at least three-times cost to account for shipping, Amazon fulfillment fee and Amazon selling fees.  I’d like a product to net, before expenses between $15 and $20.  Expenses would bring the net to about $5 to $7 each.

I really don’t know how some Amazon sellers make it.  A few are selling $100,000 per month, but they must be fairly mature with a refined supply chain to support them.  There two primary methods: the scrounger and the Alibaba importer.  The Scrounger searches for bargains on closeout or unique items at bazaars.  The importer buys at the wholesale price.

The business isn’t impossible, but it’s not easy either. There’s an art to finding the product, getting the best price from the manufactures, shipping, and avoiding the con.  There are ways to reduce risk, but the new guy will learn a lot at first.  I’ll consider an article in the future about Alibaba and Amazon.  But, for now, just know that it’s slow work to find that perfect product and then having it rank well on Amazon.

The U.S. Navy

I mentioned the NROWS – Navy Reserve Order Writing System – in the introduction because it is such a stark reminder of why government sucks!  Have you ever booked a flight online.  Pretty easy right?  Well, for a month, I’ve been trying to get orders written to attend a planning conference in Algeria.  It used to take a day to get orders and then a second day to book the flights.  Luckily computers have made it so much easier.  Not!

I just read that Obama Care’s web-based insurance system cost $1.2 Billion, up 2.5 times what was originally expected.  How can an online insurance system cost a billion dollars?  Ever heard of eInsurance?  I bring this up because NROWS works as well as Obama Care’s web site.  It’s taken me three weeks to only have the orders refused because of an entry somewhere in the system that I have to fix but cannot find.   It’s self services so there’s no one really available to help.  I did find a Petty Officer at the command to help.  I waited for 15 minutes before we were disconnected, with no luck.  All told, I’ve worked seven hours trying to complete the online “form” correctly.  Very typical for past experience!

The Navy created the system with no ongoing input from the users.  It was written to be “auditable” but not workable to the Sailor who needs to use it.  Great job government!  To make things worse, once it is fixed, I’ll have to jump through a zillion hoops to have the Navy book the fights – in another self-service web-based system.  But wait that’s not all!

When I return, I will have to “liquidate” the travel in the same systems.  In the past it’s taken me up five to six hours to access the software, submit it, re-submit it, re-submit it, etc.  Typically it takes two to three months to finally get reimbursed by the Navy.  Yes, I have to pay for it, then get reimbursed.  In their wisdom, they made me take on a Citibank government credit card.

The Navy pays the credit card bill, once they feel like it.  But, I am supposed to pay it off monthly.  So, I loan the government money for three months and then they pay it off.  If I don’t pay the bill, my credit rating suffers.  My trip to Algeria will be about $10,000.

The Navy thinks its a great system because they don’t have to account for the upwards of 12 hours (total) of free labor I (and others) give to prepare the pre and post documents.  They then get an interest-free loan later on.  As a side note, I went to Texas last July and was finally paid for my travel in November.  Let’s see, that was four months!

On return from Afghanistan in 2009, I waited 13 months to get reimbursed $1,200 for my stay on medical hold.

How do we ever win a war?!  If we get in a WWII style war (all out war) in the future, our reliance on computers and information systems will be our down fall.  It takes people, leaders, and trained troops to win wars, not bureaucratic processes transferred to a computer!

Bottom Line

The government cannot even approach the efficiency, time savings, and cost reduction that a business with a profit motive can do.  Even with profit included, free enterprise is (by my estimate) five to ten times more cost effective and efficient than government.  I have a million examples from my twenty years of military.

So why do we allow the President, Congress, and the Federal Reserve to regulate our “free-market” economy?  It’s business that creates the jobs, they are not grown on government trees. Moreover, if you are an employee you do not have a clue what it takes to come up with an idea, risk it all, create an efficient system, and if you’re lucky make a profit in the end — but only after paying the engineers, suppliers, employees, and government!  God, please help us!

Talley Ho!

Nick

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