Business ideas which won’t work
Rod Drury writes in the Herald about business ideas that won’t work. A very interesting read. Some of those he advises against:
- Anything that involves text messaging or mobile data as margins from carriers too low
- Taking on Trade Me as they already have all the customers
- Anything aimed at taking bricks and mortar retailers online due to history of failure
- Anything to do with document or content management as done before
- A start up involving retail point of sale will not work as cost of sales and support too high
- An export-focused business where the founders are not willing to travel abroad
- A business where the founder is not happy to step aside and let another person be the CEO
- Any business depending on low-cost Google AdWords as their cost will rise
- Any software business where the software development is outsourced to a consulting company as not nimble enough
- Any business without a business plan will not work
Looks a pretty useful list to me. Any that people disagree with or that they would add on?
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January 5th, 2008 at 9:19 am
any business where the costs exceed the sales
January 5th, 2008 at 9:42 am
Any business where the you hire the CEO from an unrelated field , its his second career and wouldnt know how to run a bath and his idea of product research is sniffing the vegetables
January 5th, 2008 at 9:49 am
Any business that does mot understand how to manage risk, be it currency, interest rate, electricity, metals, fuel etc etc.
It still staggers me that we have major companies that “run with the wind”. Sanfords and NZRU being two cases in point. Only complain when the exchange rate is too high. Where was the hedging when it was low?
They simply got it wrong and then its the Reserve Banks /governments fault. Failure to manage risk (that it could go higher!).
January 5th, 2008 at 9:54 am
a business which does well: that whereby you can simply force money out of peoples wallets by legislation and then enforce it by giving the enforcers more power than the police. Oh, and make sure the ‘CEO’ stands up and claims amazing skills at operating at such eye-watering surplus levels.
Ha, what a joke Cullen.
January 5th, 2008 at 10:16 am
“Any business depending on low-cost Google AdWords as their cost will rise”
Its Ok then if you call it non commercial!!
Id worry about a business that depends on phoning people during their dinner time, has a very low sucess rate at getting a decent response because of this
[DPF: My biggest worry is that I need to expand the staff from 60 odd to around 130 to cope with all the business we have]
January 5th, 2008 at 10:32 am
That’s a pretty stupid list. Alot of those can be done easily. My content management system has made me thousands. There are trade me sites killing trademe.
January 5th, 2008 at 11:12 am
Hard to see the cost of Google AdWords rising dramatically, and CPC is dependent on the industry you’re involved in anyway. If anything, many established AdSense publishers have been reporting drops in their Google paychecks, not increases.
And what sites are killing TradeMe infused?
January 5th, 2008 at 1:43 pm
DPF, where is your advert for staff?
I have three lazy teenagers at home who could do with part-time jobs.
January 5th, 2008 at 2:24 pm
I’m afraid I never advertise for staff. I only appoint staff on the recommendations of existing staff members. It keeps the quality significantly up. The one time I advertised was enough.
January 5th, 2008 at 5:49 pm
I think the list is simplistic, my wife drew my attention to some comments by a futurist made on Australian TV this week, which if his thinking is appropriate took as a thesis that much of the established norm, including in business would largely disappear in relatively short period, this was backed up by a BBC Radio interview I heard overnight, where the interviewee, I forget his name, pointed out that the great majority of us think in a linear fashion, whilst many innovators in fact think exponentially.
On this basis, given that many of the points made above are old world in today’s thinking, it is highly unlikely that many of them will hold good, other than:
* Focus on an objective
* Do not try and do too much for the resources available
* Manage your time carefully
* Whilst listening to others, remember someone has to take a decision
* Be prepared to rescind a decision if it proves wrong and change tack
* Whilst planning is important, remember Von Clauswitz who stated in the context of military thought, but it holds good in other fields, something along the lines of ‘ a strategy is something you take onto the battlefield, but change as circumstances dictate”
* As someone above noted manage risk in all forms, indeed, to some extent much of what Drury is saying is about risk management, as one could say about my comments also
January 5th, 2008 at 5:58 pm
Any business started by a person or persons who’s made their money as a solo entrepreneur and whose focus remains on building their own personal wealth as opposed to that of the company (and increasing their own wealth as a result).
In other words, some people are so used to working hard IN a business that when they begin to employ other people they keep working in the business and not ON it. I’ve seen several otherwise brilliant businesses fail because the Director(s) couldn’t lift their sights above the walls.
January 5th, 2008 at 6:55 pm
Adam Smith’s post: good advice in plain english.
January 5th, 2008 at 7:20 pm
During a gold rush, it’s usually better to own the general store than dig for gold.
January 5th, 2008 at 8:06 pm
“[DPF: My biggest worry is that I need to expand the staff from 60 odd to around 130 to cope with all the business we have]”
But what is the real time problem of this scenario as an employer??
GST and PAYE?? your extra contributions to ACC and Kiwi saver??
I’m asking if the extra work isn’t actually profitable which leads to, is their a peak point where business is profitable and sustainable and is that peak point becoming more precarious??
January 5th, 2008 at 8:08 pm
In fact, if I won a fortune in Lotto, would I be better off living off the interest than investing in business??
January 5th, 2008 at 8:45 pm
anyone can enlighten me on this peak profit point?
January 5th, 2008 at 9:09 pm
any businessmen on tonight