Three $100,000 Product Ideas for Budding Entrepreneurs
If you're thinking about starting a business but don't know where to start, this article will help you know if entrepreneurship is right for you and give you the perspective to set you up for future success. Also you can run with any of these ideas and make a good chunk of money.
The truth about business is the idea is the easy part: execution is the challenge. Executing the details cannot be taught in the classroom and must be experienced to develop all of the micro skills you need to be a successful entrepreneur, including:
Social Confidence to Approach Others with Your Idea
Sales and Speech Skills to Close a Deal
Logistics and Planning to Cover all Possible Problems
Accounting and Finance
Creativity and "Big Picture" Awareness
The closest "classroom" experience to entrepreneur training is improv. In improv we are the writer, actor, director and critic of a performance being conducted in-real-time. It's impossible... just like starting a business. Rather than teach improv as an "art" class, I've taught it was a "social" and "business" class for the past three years and it's no wonder that my students move on to create ventures of their own.
In this article we're going to examine how to think like an entrepreneur by breaking down three ventures you can do in Budapest RIGHT NOW to start your business engines and develop the skills you'll need for future success. The final idea is applicable to any city anywhere in the world so read on you business rebels!
The Ideas, how to think about them and the skills you'll develop:
The Liberty Statue Bottle Opener
It looks like a bottle opener so we're going to make it a bottle opener. Yes, one of Budapest's most recognizable landmarks can easily be turned into a fun and practical souvenir yet doesn't already exist. This could be sold for 1500 forint/5 euro around the city.
The big question for this project is how to get it to the consumer? Let's say I could make them for 100 forint each in China and ship them to my apartment... how do they get from my apartment to the customer?
Option 1 is to walk around the street cold-approaching tourists and trying to sell them at 15x markup. This option would maximize your margin (how much you're making per unit) while costing you the most time, energy and risk because if you don't spend 8 hours a day selling you're stuck with 10.000 bottle openers in your closet!
Option 2 is to distribute to middle-men like bars, cafes, supermarkets and tourist stall. How much would these cafes be willing to pay per unit? If they're selling it for 1500, certainly much less. Let's say 500 in this example. So we're only making 400 forint / unit now but once we develop the relationships we free up our time and have far less risk! As long as the product is attractive enough to be a hot seller, your merchants will be re-upping their orders in no-time. Unless you already own a souvenir store, this is probably the best way to go.
Questions to consider:
1. How much can I make it for (per unit) - including shipping!
2. Where is the Point of Sale (POS) - where will buyers actually pay money for it? Cafes? Bars? Tourist stalls at the market? Corner supermarkets?
3. How will I develop relationships with these merchants? What's my sales plan?
4. How much can I sell them for to the merchants?
5. How will I provide support to ensure the product is attractive? Do I need a product line (like two or three different colors)? How will I design the product? How much will prototyping cost me? Will it be 2D or 3?
6. How much risk can I take on? Can I order 10.000 units, 100.000, 1.000.000?
7. What's a win for me? What am I looking to get out of this? Under what conditions would I stop the venture? What's my exit strategy for selling the business? What are three or four future options to take this business in beyond bottle openers?
8. What am I missing? Do I need a business coach or mentor?
2. The Ruin Pub Book
Budapest is known far more for it's party scene than tourist attractions with legendary ruin pubs built into abandoned buildings over the past 15 years. There is currently no book on the topic of ruin pubs being marketed for mass consumption and like the bottle opener, this is a product with appeal to both locals and tourists.
Unlike the bottle-opener idea, creativity comes far more into play here and I would recommend this for someone looking to turn their hobby (writing or design) into a career. Learning how to get your creativity into a form that people want to buy and then working with the industry to get the product out there is a critical exercise to get you unstuck from the freelance hustle.
In my mind I picture a small but significant book breaking down the evolution of ruin pubs with copious amounts of pictures and stories. It's a combination "history book" and "story collection" that will appeal to both fun-loving backpackers and culture-appreciating tourists.
As an entrepreneur, your job is to understand the full-picture and put the pieces of the puzzle together. It is your responsibility to hold everyone to deadlines and standards. The main pieces here are the content, publishing AND distribution. The content is the collection of stories and pictures, the publishing is putting it altogether into a product, while the distribution is the same as in the bottle opener above: how do we get the product to the customer? Are we selling at tourist attractions or just in bookstores? How do we ensure our product is in the right place to be seen at these stores...
1. The Content: This is a huge undertaking. As an entrepreneur there is always a "time vs money" question. On one hand you could pay someone to compile the content for you. On the other hand you could track down hundreds of old pictures, bar owners, patrons and more to get the stories needed to fit into a compelling overall narrative. You'll also need the rights to the pictures and stories and dozens of other legal issues you'll need to research.
2. Publishing: You'll need contacts, lots of them. Hungary isn't exactly a "hustle" culture so coming to a publisher even with a "win-win" situation like this is going to take a lot of effort. You'll need to be introduced to key people by a friend of a friend of a friend and this is where your network comes into play. You need to be developing relationships and for that it needs to be genuine as people can sense if you're just looking to get something out of them. There's a technique I call "passionate networking" which allows you more leeway on pushing people but it involves authenticity and genuine belief in what you're doing. Easy if you're running an improv theater, hard if you're hustling a side business.
3. Distribution: The publisher will probably deal with this but depending on the situation you might be involved here as well, especially if distributing to abnormal locations like bars and cafes. The more involvement you maintain, the more energy you spend and the reward is money and experience. If you're just starting the experience is invaluable and I would involve yourself in as much as you have time to take on. As a mentor once told me "in your 20s, say YES to everything so in your 30s you can say NO"
If you're out of breath reading this good! Entrepreneurship is an exhausting business and it never stops! There's 10.000 tiny details and you're responsible for all of them. This second choice is by far the most complex and if it fits your passion in life then go for it. However, our third and final option is the King when it comes to bursting all of the beliefs holding you back and unleashing the world to your potential.
3. Social Media Manager for Small Bars/Restaurants
Small bar and restaurants are run by people like you who want to try out this "business thing." They don't want to deal with social media. They don't want to think about thinking about social media. They want to make their pizza, serve their beer and ride the emotional roller-coaster of creating something of their own. And yet they need social media. Most restaurants close within two years - help them be one of the lucky few that make it to five.
I estimate you could make 35.000 forint (100 euro) / month for managing a social media account and take on 10-12 at a time. If you're any good this is well worth the money for the restaurant and once you get into the flow it will be easy to make 2-3 posts a week for each business.
Unlike the first two examples, this is all digital so there's no distribution or supply chain to figure out. It's all about cold-approach sales and relationship management with a solid funnel to get your customers hooked. Here's what these terms mean:
You need to walk into a bar and convince someone to give you 100 euro a month for the next three months. Let's break that down
1. The approach: how are you going to start the conversation? Are you going to be direct, or invest some time in the place as a "customer" by ordering a beer, making small-talk? In Budapest I recommend indirect but find your flow.
2. How do you guide the conversation? The conversation has to move smoothly towards "what are your problems?" "how much more business would you bring in from social media?" and finally "do you have a social media manager?"
3. What are you "selling them"? We already know that (A) they have problems, (B) social media could solve it and (C) the job is open. Now how do we sign them up? No one's going to hand you 300 euro without building some credibility so you'll need to offer a free month's trial. The brilliance is that by taking that free trial they're making the hard step which is to give you admin access to their social media account! That's the highest hurdle you have to cross! After you've proven yourself in the free-trial it's simply set up a recurring PayPal invoice and you're in for the next 6 months no problem. Repeat 20 times and you've got a career!
As we can see, having a product or service that people will buy is nowhere near enough information to determine if you can make money and form a business. When you're thinking of starting a business you need to think like an investor - if this were another person's idea, would I invest my own money in the project? Good ideas are fun to fantasize about but working within the world to create a product that has overall economic value requires getting dirty with the tiny details and finding your service's place in the vast economic web of society.
I'm Peter and I train people to burst out of their shell using improv comedy to develop business and social skills. I train adults, kids, companies and even prisons. I am undyingly optimistic about the future of Budapest and share my perspective in this blog. Subscribe below to get exclusive posts straight to your inbox, including pre-regsitration for workshops, interviews with local characters and sometimes like today I even give away free money. Welcome to the Red Ball tribe and I'll see you soon.
-Peter “Born to Hustle” Mezey