Most people wanting to start a new income stream come up with the wrong ideas because they focus on a product or service idea.
You see, when you go for a new idea you can face too many obstacles. You have to spend money testing your idea. You need to develop your idea and find distribution. All this costs money. The worst thing is that you only have an outside chance of success.
Even the big companies in FMCG don’t get new product development right. Something like 76% of new products in FMCG failed between 2011 to 2013 within a year. About 66% of the products never reach the sales volume of 10,000 items, according to a news report.
If the big companies get it wrong so often what about start-ups and small businesses? First-time entrepreneurs have something like an 18% success rate, according to a survey.
That’s why we don’t advocate a brand-new product or service when coming up with new ideas. Rather go for something already on the market and look for a gap you can improve. For example, an entrepreneur came up with a double-insulated metal water bottle with a difference. There are plenty of water bottles made from glass and plastic as well as metal. But what this entrepreneurs did was position the water bottle in a premium segment through clever design and marketing.
McDonald’s may not have the best product but it has a good business. It doesn’t matter if the product is boring as long as it brings in cash; then you have an income generation vehicle.
Take the example of a person (real example disguised) who has accumulated three properties in addition to her own home. She has three monthly income streams. Imagine what she’d have to do with a new product and how long it would take to produce anything like this income. I can hear you saying that you don’t have this sort of capital. But she leveraged and bought each property one by one. Yes, she’s paying off the bond, utility costs and rates but at the end of the day she has three income-producing assets that she will eventually own.
It may also be better to take an existing product or service and see what else you can spin off from it. Entrepreneurs create derivatives from their intellectual properties such as a literary license, licenses from the rights to produces games and franchise rights.
Now, how could you take advantage of derivatives from an existing business? Actually, Ray Kroc did this with the McDonald’s brothers business. For example, a computer business could could hive off a service business, a training business and even a franchise store business.
If you want to train your mind to look for and create income opportunities like this, give yourself permission to get a copy of “Breakthrough Ideas”.