Becoming a Successful Entrepreneur

Saturday, September 10, 2005

Making a Profit using Amazon

Jason Meyer and Daryl Butcher met at a boat party on Lake Washington last July. Days later, they purchased 10,000 used books from a charity, rented a warehouse in Kirkland and formed Thrift Books.

A year into the venture, the company has 300,000 used titles listed on and other online retail sites. Meyer, who oversees the company's finances, said he expects more than $1.2 million in sales the first year.

"It's all volume," Meyer, 32, said of their strategy, which is to sell a large quantity of books cheaply and to make a profit on shipping. "We sell a lot of books for a penny."


Dave Anderson started his company, ScannerPal, after his wife, Barbara, began selling used books on Amazon 2 1/2 years ago.

Anderson, who wrote software for wireless devices, had accompanied Barbara on a book-scouting trip when he saw his wife go through stacks of used books, holding up each one to determine whether it would sell or not.

When they returned home, half the books had no market value. He decided the key to running a successful business was to buy only books that sold at a higher price.

Anderson developed a software program that allowed his wife to use her cellphone, or any other wireless device, to enter a book's bar-code number. The program returned important information, including Amazon's price for the book, how many others were selling copies, the item's sales ranking and the lowest price for which that book was available.

- Information quoted from the article, "Small sellers get the edge" - The Seattle Times

Friday, September 09, 2005

Successful Startup Strategies

The hardest part for most people wanting to start a business is not coming up with an idea, but taking action!

When thinking about business ideas, I guarantee you found something good and then later found out it was already implemented… so you forgot about. Never do this again! Having a successful business is not just about having a unique idea. You can be successful by taking something that already exists and making it better.

There are three things you need to create a successful startup:
1) start with good people,
2) make something customers want,
3) spend as little money as possible.

Many startups fail at one of these causing them to fail.

Not only do you give something that customer's want, but it must inspire you. Why waste every week for the rest of your life waiting for the weekend to arrive (if that's when you have your days off). Find something that you love to do... choose something that motivates you to work even harder.

If you're going to spend years working on something, you'd think it might be wise to spend at least a couple days considering different ideas, instead of going with the first that comes into your head. You'd think. But people don't. In fact, this is a constant problem when you're painting still lifes. You plonk down a bunch of stuff on a table, and maybe spend five or ten minutes rearranging it to look interesting. But you're so impatient to get started painting that ten minutes of rearranging feels very long. So you start painting. Three days later, having spent twenty hours staring at it, you're kicking yourself for having set up such an awkward and boring composition, but by then it's too late.

So the biggest cause of bad ideas is the still life effect: you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea. I don't think we should discard plunging. Plunging into an idea is a good thing. The solution is at the other end: to realize that having invested time in something doesn't make it good.

- Information quoted from the essay, "How to Start a Startup"

Thursday, September 08, 2005

Maximizing your RRSP Contribution

My best advice with RRSPs (Registered Retirement Savings Plan) would be to start early. The sooner the better! With the magic of compounding interest, investing your money one year a head of schedule can make an insane difference (refer to my earlier blog, "Time, Return, & Amount"). The beauty of RRSPs is that they are tax deductible.

For example:
  • Person A has an annual income of $50,000 -> pay income tax on $50,000.
  • Person B has an annual income of $50,000 but contributes $9000 to his/her RRSP -> pay income tax on $41,000

Your tax refund can be used to generate more retirement savings. So max your contributions! And no, this means you can't put $1,000,000 every year into your RRSP. The government sets a maximum every year on the amount you are allowed to contribute. At the present time, the limit is 18% of your previous year's earned income up to a maximum of 16,500 for 2005 & $18,000 for 2006.

If you think it's too late to start maximizing your RRSP contribution, then think again. Whatever amount you do not use (from your allowable RRSP contribution) will be carried over to the next year.