Skip to comments.What Street Vendors Can Teach Us About Bootstrapping And Entrepreneurship (Learn from little guys)
Posted on 05/13/2010 10:49:00 AM PDT by SeekAndFind
Some people are born wealthy enough to take the massive risk which funding a new business entails. Others get seed money from brilliant pitches, luck or connections.
And then, there's the rest of us.
Funding a business, or more precisely, risking losing money when starting a business, is the single largest obstacle for most entrepreneurs. Even good ideas can take time to fine-tune or pan out.
That's why I have the most respect for the 'street-stall entrepreneur' one finds in developing countries. This is the individual who starts out with absolutely nothing, and shamelessly sells any product they can from the street to make his living.
Every day people pass this individual on their way to work, seeing them as nothing more than a poor and desperate punter.
But, there are many cases where the street-stall entrepreneur doesn't let it end here. Over time, this individual rigorously ramps up their business, with no resources but motivation and determination, into a larger, more successful enterprise.
These kinds of people conduct the most raw, basic form of entrepreneurship struggling to make money while their finances hang by a thread. And I think a lot can be learned from them.
(Excerpt) Read more at businessinsider.com ...
Who will be the first of us to sell sex toys in front of the white house on the sidewalk ?
LESSONS FROM THE STREET VENDOR :
1) As a micro-entrepreneur, it’s crucial to first establish a core cash flow
Don’t even think you’re ‘in business’ until you’re cash flow positive, even if you have some savings.
So, whatever the revolutionary product or service you one day wish to sell, in the beginning it’s alright to make extra money by going out and doing something else.
This could include taking a part-time job that some might find insulting, or selling products for a third-party marketing firm.
2. it’s okay to avoid getting tied up by a long-term full-time job position if it’s going to prevent you from devoting your all to your business.
you need cash flow, but you also need freedom and spare time to invest in your own project. The street-stall entrepreneur knows he could go and find financial security as someone’s driver , janitor, or security guard. But he doesn’t do it unless it’s just a short-term stint; he’ll do anything before he signs away his freedom.
This restriction should, in fact, make you work harder and succeed faster, by forcing you to hone your sales skills and make you think extremely hard about how to create near-term cash flow for your business.
Remember: you can always look for short-term opportunities based on output of cash, rather than full-time employment.
3. Don’t be afraid to sell your products before you even have them in stock
Or just sell the exact same thing as other established companies, and do it better.
When you’re starting out, one of the largest unknowns is whether a product or service will even sell.
Answer this question by pitching your product or service to people from day one, even if it seems commonplace, or ‘isn’t in stock’.
The worst that can occur is that people say yes, and then you get to rush to make it all happen.
4. Entrepreneurship is all about simply not paying upfront for anything
It’s rare that you would ever want to hire someone expensive or buy an expensive service early on.
Either find a way to agree to a revenue-share model of payment, bring them in as a business partner, or learn to do without them until you have sufficient cash flow coming in the door to cover the cost.
Remember: cash flow negative means ‘out of business’ for you. That’s the mind set you need in order to survive when you don’t have deep pockets.
Bootstrapping is a way of life for these individuals, and we could stand to learn a lot from them. Most importantly, of course: they teach us that, with the right focus and determination, you’re never too poor to start a business.
One important lesson to learn from street vendors is that it’s much easier to start a business if you can get someone else to pay one or more of your biggest costs. In their case, that would be the taxpayers who pay the costs of building and maintaining their “retail space” (i.e., the public streets and sidewalks).
“Remember: cash flow negative means ‘out of business’ for you. That’s the mind set you need in order to survive when you don’t have deep pockets.”
Selling cocaine would be a great idea you’d have at least one dedicated junkie in the neighborhood.
Years ago Paul Harvey told a story on the radio about a man who started out selling apples from a pushcart and gradually built up a large fresh produce business with trucks running between Florida and New York. As an old man he hired a young accountant fresh out of one of our finest universities to take over for a man who was retiring. After a few weeks the young man came in to report on the company’s financial situation and recommended major changes in business methods. He told the owner that he was amazed to find after completing his analysis that the company was actually losing money when proper accounting methods were applied. The old man paused, looked him up and down and said,”Son, here is a key, go up to the third floor and look in the big storage closet and you will find the pushcart that I started with, everything else you see is profit”.
Excellent post. I find it’s all true when selling myself as a tutor. I’m not selling a product, I’m selling my time.
Reminds me of an old story ...
For 25 years, a man has a hot dog stand. Every one says he has the best dogs in town. There is always a line, waiting to get one of these gems. The man does so well, he is able to put his son through college so he does not have to have a life of standing on is feet, behind a hot grill
Junior comes home from school one year and announces to his dad that he's learned in school a recession is coming and Dad should make some changes.
Dad, knowing Junior is now college educated, makes some cut backs. Less onions on the dogs, a cheaper brand of mustard, shorter hours, etc. Soon, his business falls off and he's forced to close.
"You know, son," says Dad, You were right. These are difficult times!"
RE: Years ago Paul Harvey told a story on the radio about a man who started out selling apples from a pushcart
Paul Harvey used to end his stories by revealing the name of the man and then say the famous phrase : “And now you know, the rest of the story.”
So, who was this man ?
Eight years ago I bought a company, got scammed by the Sellers, and went broke in a big way. Lost everything I owned and went Chapter 7.
While looking for a job I sold off some of the equipment from my defunct company. I became an equipment and business broker using only a telephone and industry contacts. Along the way I found two failing manufacturing companies. The same month that my bankruptcy was discharged I bought those two companies CHEAP.
Never give up. Keep swinging and you WILL hit the ball!
My favorite comeback story:
I met a former roughneck in Odessa, Texas nicknamed “Oop” because of his resemblance to the comic book character.
Some idiot dropped a sledgehammer on Oop’s head from the top of an oil rig. Oop lost so much damaged brain matter that you could hide a golf ball in the top of his head.
Get this...Oop became a millionaire AFTER HIS BRAIN DAMAGE.
I asked him how he made so much money. He talked very slooowwwly, “I found out that PAINT is worth $5 in the can and $500 on a bulldozer”. He bought, painted, and sold heavy equipment in his front yard and made over $1M.
None of US have an excuse.