Quote:
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Originally Posted by B-Morgan
Akula-
My Quote: "(#1) I have been looking at empty lots around town, thinking that they'd be prime locations for businesses, and that if I bought the land, I could make money by leasing the land to the businesses that developed on it. Is this a good and valid way to make income?
(#2)Also I would like to do a similar business online, like hosting a directory that everyone in a particular city would frequent. It would be like having real estate online. Any ideas here about this idea?"
In #1: In my town there is a lot of retail and office real estate being developed within the city limits. And there are many prime locations for sale within the city. The problem is can an inexperienced real estate person buy undeveloped lots, do the necessary development (zoning & sales), and keep the land as my own, and charge a lease to the businesses developed on it. Thus creating monthly cashflow from what was empty real estate lots. Or will it involve ton of education on my part and also lots of financing?
#2: The problem that I see I could solve in niche local internet circles is to provide a local business directory for "the best" businesses in the town, provide adequate offline & online marketing to increase their traffic & website sales, with no background in web-development or hosting. The businesses on the site would be unique, could network and exchange leads as a network, and even form a buying club for office supplies in bulk. And if desired a yearly "best businesses" newsletter that reaches most of the city, creating new clientele for them.
Does this give you any more material to understand my options and why they are solutions?
Brian
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Ok Brian. Great! I'm glad we're on the same page. If you want to get the most benefit out of this thread, here's some things I need to to do.
1) I need you to be patient with me. What I am putting you through here is a formal process of opportunity selection, conducted by entrepreneurs in their role as investors. This insures that entrepreneurs invest themselves in good opportunities. This process starts with problem formulation. Your problem formulation is currently inadequate to make good investment decisions (sorry to break the news :-).
What you need to do is be patient and correct your approach to problem formulation. Likewise, if you think that I am making this stuff up, you're best to get third party opinion from people on my
blogroll regarding the importance of problem formulation.
2) Customer focus: Your approach (i.e. "The problem is can an inexperienced real estate person buy undeveloped lots") is incorrect. What you should be saying is "Based on focus groups and proprietary information, commercial clients experience a shortage of developed land in my local area. Specifically, a number of real estate developers are finding that they cannot manufacture enough properties to meet demand. To solve the problem, what they need are partners who can provide joint venture opportunities".
Do you get it? This focus on customers, rather than your self (and your problems), illuminates good opportunities available (and not available) to someone in your situation.
3) Quantitative data, name dropping: By failing to identify specific data, and the identities of trends, people and customers - you run the risk of investing your self in a mirage. Specifically, by saying "a lot of retail and office real estate being developed" you are just restating what
appears to be like an opportunity. But, unless you drop names, this opportunity will prove to be unphysical.
What you need to say is "Based on focus groups, customer X has promised to buy from me product Y".
4) Non-proprietary data: As a rule of thumb, if the problem you are identifying comes from publicly available information, this is unlikely to be a good opportunity (because somebody else would have taken advantage of it, if it was).
Specifically, in saying "provide adequate offline & online marketing to increase their traffic" you are not highlighting anything that's not obvious.
What you should be saying is "Based on the 2005 annual report of Company X, the board is looking for entry into market segment Y. Unfortunately, because they are over invested in segment Z, they cannot readily enter segment Y unless they have a good solution. What I am offering is a solution to Company X which let's them access segment Y by leveraging their access to segment Z."
5) Ignore at your own peril: I hope to have explained to you the benefits of customer focused problem formulation. Specifically, the benefit is not in restating the obvious, but in applying disciplined opportunity selection to identify real opportunities rather than fairy tales/pies in the sky.
Do you understand what I am saying?
Please redo your problem formulation following the guidelines. Talk like I talk by using the GSQ method - when writing a paragraph start with Generally....then Specifically...then Quantifiably.
If you do this, you will find the right opportunity. If not, go ahead - throw some darts at a board, take out a loan, and make your decisions that way.
:-)
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