Thinking Side Income? Think About The Industry First March 31
I found this article through Ramit Seth’s blog. I drop by from time to time to check out what his financial radar screen pulls out while thinking about ways to make side income. There are basically 2 ways to make extra. Get a second job or freelance of your free time. Three ways if you count being able to convince your boss to pay you more but that’s another story.
In this article where John Tozzi interviews author Scott Shane of “The Entrepreneurship Myth” gives you a good perspective of entrepreneurship. Although I have not read his book, apparently Scott collected a lot of data about entrepreneurship. One thing I found very interesting is he says, “the industry you choose have a larger bearing than your business talent ” when it comes to your chances of success!
“If you go back 20 years or so, about 4% of all the startups in the computer and office equipment industry made the Inc. 500, 0.005% of startups in the hotel and motel industries made that list!”
Looking back at my own life, if I had a second chance, I’d stick with a job and do something part time online. Off course with hindsight, I can say that. Financially, I think I’d be better off. But then in the early days of being self employed and being almost broke, made me hunger for knowledge to be successful. That hunger drove me to learn from a far wider field than I would have, have I kept being employed. I observe of many employee friends, when they make a “more than enough” salary, few are motivated to explore beyond their field.
I saw many people, once they reached a certain level of income that they are comfortable with, somehow, they don’t push harder for more. Once it drops below a certain standard, people will push really hard to get out of the discomfort zone. It’s like a thermostat but related to the income level.
Being an entrepreneur had force me to pick up social and selling skills that I might not have picked up had I stuck to a technical and office based job. Even then, although I saw the opportunity present itself on the internet, read Youtube, Facebook and the like, I feel like I’ve somewhat missed the boat when it came to doing business online. The article above really made a point.
Where is all this going? Well, if you want to start a business, any business, do some research first. I’ve observed that many business took off because of several factors that converge, like a perfect storm. Timing, location, entrepreneur skill, right partners etc. As an example, just around the corner where I live, there is a small corner restaurant. Based on what I observed, the place changed ownership at least 3 times. Now, I can see this place operating rather well. Customers are increasing.
Why did the first 2 owners fail? Lack of customers. 3 years back, there are fewer residents in the area. It has grown quite a bit lately with several more phases occupied. At the same time, the on-going construction of new homes meant hungry workers who need a convenient place to stop by for a drink and a place to talk business.
Because there is more hungry people, the food has gotten better. In summary, if you are thinking beyond just making some side income for the short term, I’d encourage you to really check out the industry you’re in. Choosing the right one could mean the difference between success and failure.
