Autarchy of the Private Cave

Part 1: Basic Business Hints

I am not a millionaire myself, to start with. And yes, I do want to become one. In this essay, I am going to present you some tiny snippets I collected, which would make your own way to financial freedom easier.

I will start with some basic business hints. There is a number of fundamental ever-true points:

• Automation of the business processes is good. It saves money (allows higher profits), and saves time, which is much more important. Automation also helps achieving other points of this hint-list. Automation does not necessarily mean that you have to buy some fortune-worth Japan-made intelligent robots. Automation simply means that your business processes operate without your intrusion, or without the need to [micro]manage them. You will not be able to automate your business to become a “money-making machine”, as there are always changes and the need to resolve issues, but you can lift some mundane tasks off yourself, your companions and/or employees, or even decrease the number of employees you really need. For example, instead of manually processing each order in your internet-shop, you can set up a system, which will automatically accept and verify payments, and will also generate a delivery request for FedEx, UPS, DHL or what other delivery service you use. This type of automation is in the market for quite a time, it should be easy to find or custom-order one.
• The higher the rate/volume of your business, the more profit you make. This point seems evident, but still is important to mention. It goes hand-in-hand with automation – good automation allows to easily increase volumes of goods/services being sold.
• Large-scale business usually allows to minimize operational expenses. This point is not always true – it depends on how efficiently your large-scale business is built. One of the classical approaches to increasing scale and competitiveness is to incorporate as many nodes of your business chain as you can. For example, you could be starting as a reseller of some goods called Beta. Later on, as you learn more about this product, and your vending network grows, you find it useful to start your own large-component assembly of Beta. (In case of desktop computers or notebooks you could start assembling them from separate components.) Later on, as you require customized solutions, you may also start producing some of the components required for the goods you produce. As long as each sub-process in your chain is viable and profitable, you get stronger business network with better failure resistance. If competition grows, you may find some of the chain nodes operating at near-zero profit. In this case, if you have no other means to decrease production costs, you may be pushed out of that specific business sector. The larger your chain is, the higher failure resistance you have, and the less probable is that you will encounter an opponent strong enough to win the market from you.

Whether you already have your own business, or you are just planning to start – it is important to choose “appropriate” sector for your activities. Here “appropriate” means a number of different things. First of all, it reflects your inclination to be dealing with, say, notebooks and not microwave ovens. This factor is much more important than it may seem. In general, this is a completely different topic, so I will only remind, that do if you like something, you are very likely to devote more time to that, and generally do that more thoroughly. Another aspect of “appropriate” is actual economic fitness. Evidently, it is not worth starting to sell notebooks in the city where there are, say, 12 large-component assemblers/producers of notebooks, and you cannot walk more than two blocks without encountering Yet Another Notebook Store – this sample market niche is already [over-]saturated, and it will be plain hard to enter the market here. It is always better to start in the yet under-explored economic niche, or even create your own. This approach gives you more time to develop and more chances to survive. You may still try to enter the saturated segment of business activities, but to do so you will need either special non-business advantages, or have a strong financial backup to be able to gain some portion of the market before your numerous competitors push you out of the field.

Third aspect of the “appropriate” applies to your target audience. As we are stuck with notebooks here, imagine selling them in some purely rural district, as compared to selling in the city. When choosing/creating a niche, keep in mind who exactly will need and consume your goods/services.

You can extend the meaning of “appropriate” (like adding “facilities availability”, “transportation distance and costs”, “shelf life”, “resources availability”) to better suite your needs, but the three mentioned will always matter, if you need your goods or services sold.