The Morning Eclipse

Sunday, May 03, 2009

Only take on risk, if you're getting paid for it.

In Robert Kiyosaki's Cashflow 101, he has this rule.

If you are going to take on a huge debt, make sure somebody else pays for it. If you are to take in personal debt, make sure it is small.

This is a very important and smart rule. In this age of hyper competition, you can't take on huge risks and expect to recoup the investment peacefully. People are just ready to pounce on you while you're spread thin. If you're in debt, you lose flexibility and cash.

One way to pass on the risk is franchising. It's the backdoor to expanding while retaining control. It has the same magic like an IPO.

A good example is this story.

There's a service company who wants to expand but doesn't have spare cash for the project. We'll call it Clueless Inc.

Clueless Inc. needs to expand because it has secured contract projects that require geographical reach. Expanding will immensely secure it future contracts and further enhance the company's capabilities.

However, such an undertaking will force it to take in huge debts. Borrowing is not an option since the board has just gone through a rough decade of lean business and heavy interest payments. The memory is too fresh and painful.

The board has heard of franchising mainly from popular media. The board understands the concept but the application is vague and murky. None of its shareholders have undergone a franchising agreement before. Furthermore, the board doesn't want to share its business secrets to other people. It fears the new franchisees may become future competitors.

This is the problem of Clueless Inc. and there is an answer to it!

The good news.

1. If Clueless Inc. franchises, it gets to expand without taking any financial risk. It means spending nothing to open new branches. No debt to pay and no monthly interest payments to worry about.

2. Franchising means, Clueless Inc. gets paid to open a new branch. The franchisee, happily, pays it to help him start "his" business. In name it may be his, but in operation, it must conform to Clueless Inc.'s system. Experience is never cheap!

The fear.

The fear is some day, the loyal franchisee will turn against its master and bite back. Clueless Inc. worries that it will be breeding future competitors to an already crowded industry.

First we take a look at the vitals of the business. These are:
1. Experience
2. Reliable suppliers
3. Volume of transaction
4. Project contracts
5. Brand
6. Reputation

It takes years and thousands of mistakes to build up the business know-how. No matter what the franchisee does, it will be decades behind the mother company.

Reliable suppliers
The franchisee can source its own suppliers but it cannot get Clueless Inc.'s suppliers. Clueless Inc. can hide the information from its franchisee.

Volume of transaction
The franchisee on its own, doesn't have volume to bring down its costs. On the other hand, Clueless Inc., already has volume and is now bigger thanks to the new branches.

Project contracts
These contracts are secured by the mother company and the franchisee has no part in it. It is therefore immensely difficult to even copy.

A franchisee cannot build a brand because it'll be expanding Clueless Inc.'s brand further while being a franchisee. It will have to start from zero when it opts to end its franchising contract.

Reputation takes time and has to be tested. Again, a new competitor will be decades behind.

To further abate its fear, Clueless Inc. can do the following.

1. Get smaller partners.
Never get bigger franchisee partners. To secure its control, financially smaller partners are all it needs.

2. Never be scared to remove errant franchisees
It is a privilege to be given a franchise. Once a franchisee breaches its contract, Clueless Inc. has to get a new franchisee for the area.

Clueless Inc.'s problem is very common. It can be applied to any business like a restaurant, barber shop or laundry service.

With Robert Kiyosaki's rule, any company can achieve bypassing risk and get paid for it.

It's now your turn to interpret the rule to your company.

Success is 1% inspiration and 99% perspiration. Never tire.


Ways the high street shops could fight back and attract constumers?

Ways the high street shops could fight back and attract constumers?

The high street shops are closing down mainly because of internet shopping. how can the town counsil (sic) attract them back to avoid closing down the high street shops. I've got two ways: increase the number of self check outs and free parking or free buses.

any ideas?

Posted on Yahoo Answers, last week of April 2009

My answer...

The best way to help the high street shops are to promote service businesses. These are businesses that cannot be done over the internet. Examples are restaurants, beauty services, grooming services, massage parlors, car repair shops, etc..

You can use the usual tax perks, easy business registration processes, minimal government regulation to promote the birth of companies.

Another creative way is to make a town council-spearheaded activity that will encourage people to come to the town. Bring in the people to the town so they will be spending in the town.

In the Philippines, poor cities create their own local festivals. There's a mountain city called Baguio which created their own yearly flower festival every January. It just started ten years ago and now is a tourist attraction. The newspapers report on it because of the festive atmosphere and beautiful flower floats.

Make the festival newsworthy and make your place an attraction.

Success is 1% inspiration and 99% perspiration. Never tire.


Saturday, May 02, 2009

What a cheese!

Who could have known how the correct cheese can make such a difference! Yum yum yum yum yum.

Success is 1% inspiration and 99% perspiration. Never tire.


Can someone live truly teach me how to make money from home?

Can someone live truly teach me how to make money from home? Affiliate marketing, Forex, or something works?

Hi, I am Scott and lives in Chino, CA.

I am also a young 32-yrs-old Chapter president of a Christian organization name Full Gospel Businessmen Fellowship. I am a chapter president not because I am a successful businessman, it's only bcs I have a strong desire to spread the Gospel.

A 9-5 job would tied (sic) me up from what I am trying to achieve with this organization. My chapter is consistently bringing souls to Christ and I want to set up many more chapters like this.

Can someone truly teach me how to make money from home? I don't mind giving back a portion of what I earn to you if you are my trainer, but please don't offer me any MLM stuffs (tho I have nothing against MLM, it's just not what I am looking for now).

Another reason why I am asking for help is that I might move back to Taiwan in 2~3 years to allow my sons to go through elementary school to learn Chinese and heritages. I need something that would allow me to generate income online. And may be build a few more chapters there.

I am not really looking into making big money. If 3 hours a day would allow me to generate $3,000 a month, that would be enough. I live very foogle (sic).

Posted on Yahoo Answers May 2, 2009 3:09pm

My answer...

The easiest way to make money over the internet is to sell goods to the world.

Sell something that is turly unique to Chino, Ca. This way, the whole world can have access to your products and order from you.

Another suggestion is you can use the website as your store. Make it your cashier stand. You can buy or sell basic goods and sell it through the internet. Just make sure you sell it cheaper or else people will just buy from the office supply store.

You also mentioned that you already have a Christian organization. You can use this network to encourage them to order from you. Example: You can sell special stationeries (that can only be found in USA) and sell them to Taiwan. Your friends there are happy and you're happy.

The internet is not a magic answer. You will have to work on the business as well. If you just plan to work 3 hours a day, you'll only earn as much. The beauty of it though is you have a lower operating cost and thus you can either keep the savings or pass it on to your customers.

Success is 1% inspiration and 99% perspiration. Never tire.


What can a brand tell you about the person who uses it?

What can a brand tell you about the person who uses it?
im doing a research about being a brand-conscious consumer.. thanks!

Posted on Yahoo Answers May 2, 2009 2:53pm

My answer...

Branding is the goal of associating a trademark or name to some emotion or attribute.

There are companies who develop brands and then stick these brands to as many products as possible to maximize the brand appeal.

If a person consistently buys a brand, whatever the product, then that person must believe in the brand's claimed attribute. Maybe the brand is trying to show that it is trustworthy so no matter what product they sell, you can trust that it is what it's claimed to be.

Some brands portray luxury and exclusivity like Gucci or Louis Vitton. Buyers of these brands then must like being part of an exlusive group. The feeling "I'm in and you're not" must really appeal to them. Another example is Nike. Nike associates itself to sports leaders and performance gears. So buyers of Nike either like the performance aspect of the product or they dream to be as good as the sports champions.

To learn more of the brand-conscious consumer, you should study first the brand and then the consumer type. Remember, the consumer may be categorized according to their disposable income, by their hobbies, by their sex, and more. Correlate the attributes of the brand to the specific type of consumer and you'll see how branding works its magic.

Success is 1% inspiration and 99% perspiration. Never tire.


What are some entrepreneurial skills needed to be a bakery shop owner and boss?

What are some entrepreneurial skills needed to be a bakery shop owner and boss?

Posted on Yahoo Answers on May 2, 2009 2:42pm

My answer...

For one, you should know how to bake yourself. This way, your baker cannot ever fool you. This also frees you from being dependent on your baker. If ever you have an uncooperative employee, you can immediately fire him without worrying about losing his skills.

Second, manage your cashflow. For small businesses, cash flow is vital.

Let's say you're expecting a payment of $500 tomorrow but you ran out of cash to buy supplies for today. Without the supplies you can't bake and restock your shelves. Without the stocks, you'll lose potential sales today. Remember, cash is the lifeblood of the business. Your business lives and dies with it.

Third, do not spend beyond your means. The earnings today may not be all income. You may still owe your supplier for your earlier orders so remember to control your expenses.

Fourth, credit is good. Credit is good especially if it's your supplier who's extending it to you. You can order your supplies and sell your products before paying back your supplier. This setup is very smart. This way, it's your supplier who finances your business and you don't spend a single cent!

Good luck to you!

Success is 1% inspiration and 99% perspiration. Never tire.