Post: #1

All day at work I've been thinking about new business ventures. Although they are trendy at the moment, I consider a super high volume business like cup cakes to be horrible.

Lets compare the cupcake man vs the real estate salesman.

The cup cake man rents a nice store front in downtown Brooklyn for $10K a month. His utilities are $500, and his unit cost for each cup cake is around $.35, making him a $2.50 cent profit.

The cup cake man needs to churn out 10,000 ! cupcakes every month, just to come close to earning a living...

The real estate salesman in downtown Brooklyn struggles all year long. It is Oct 1 and he is YET to make a sale. On dec 31 he closes a $1.2M condo in Williamsburg, and receives his $45K commission check.

The real estate man will earn the same after expenses as the cup cake man who churned out 10,000 cup cakes a month for a year.


So my point is, what are the high level sales jobs? I am 50% done on my 2nd book, but there are other area's that I can make a potential killing.

Real estate?
Life insurance?
Car sales?

Who is making the big $$ here in sales??

People have been telling me to personal train on the side for years, but it is the same arguement.

I can kill myself training people for an extra 20-40K, or work on that one large, high pay out, sale...

Post: #2

Good to see some thinking along the lines of pay-off convexity.

Is your upside higher in low-volume businesses? Most certainly.

However, high-volume businesses, all else equal, provide lower variance in cash flows, and a more consistent source of cash flows--almost by definition.

It just goes back to the classic risk-reward trade-off.

Positive convexity is desirable, but it comes at a premium. You don't hit home-runs without striking out a few times.

The "one large, high payout" could remain absent longer than you can remain solvent.

Each person needs to ascertain their risk appetite, their talents, and where the opportunity lies.

Post: #3

Real estate if you focus on the higher end stuff can be lucrative. Commercial real estate can very lucrative but is very competitive. I dont think car sales are very lucrative.

Post: #4

The margins in food are usually pretty horrible. I think you have illustrated why the West in general has moved toward service sector and away from production businesses.

The thing with high volume businesses is that they have the potential to scale (unless the space is crowded). Doing is however is quite another thing.

Post: #5

I am in the mining industry. I sell precious metals. I struggle for months even years to get a deal signed.

One a year and I am good.

Post: #6

High ticket item vs low ticket item isn't always the best lense to look at things through.

Even beyond what Kabal's talking about, i.e. cash flow variance, there are other more important factors in business success.

-What markets do your current skills/assets/relationships give you an edge in?
-What are the Key Factors For Success in that industry? What do companies/individuals compete on, what do they stand or fall on? Marketing? Distribution Network? Efficiency? Customer Service? In most industries there are one or two dominant "Key Factors For Success"
-What daily activities will you enjoy? What are your strengths - e.g. back-end systems and analysis, or building relationships?
-Does your potential business pass the "on-stage" test - could you see yourself giving a talk about it on stage in five years? Because that's how much you'll have to personally get into it to make a killing, so you'd better be willing to do so
-How much can you "productize" your offer, and take yourself out of the value-creation? (Personal training obviously doesn't fit that too well since you're the product)

People completely ignore all this stuff sometimes.

Btw to answer your question about high level sales jobs... technology and IT sales. They pay so well because you need the mind of an engineer combined with top notch sales/marketing/persuasion skills. Rare to find people who are very good at both.

Post: #7

Ha you have basically described the entire financial industry.

Better to sell one $1B company a year than to make a bunch of 1 cent commissions on block trades.

What you are forgetting to include in your analysis is the sales cycle. Lets say you can make $1M three years from now, can you survive on zero income until then?

Post: #8

(05-24-2013 09:12 AM)WestCoast Wrote:  Ha you have basically described the entire financial industry.

Better to sell one $1B company a year than to make a bunch of 1 cent commissions on block trades.

What you are forgetting to include in your analysis is the sales cycle. Lets say you can make $1M three years from now, can you survive on zero income until then?

The other question is:

Can you mentally handle it?

Post: #9

One of my boys is a good sales man and has the level of swag to do cold calling.

I could never do what he does. Honestly, approaching women is a lot easier than selling a product. Especially if I don't care about it.

Post: #10

@gmanifesto Yeah that's another tough one, most people can't handle the stress of seeing zeros for months at a time.

If you can also handle large swings on a portfolio net worth, you have more emotional control than 99.99% of the population. It is mentally challenging to keep buying into a down tape than it is to slowly watch your PA grow at a 3% CAGR. Similarly, mentally difficult to keep cold calling when you are getting no's left and right, you have to truly believe you will land that big sale (be it selling a company in finance or say a large contract on product sales).

Another FYI analogy, replace real estate agent with investment banker, replace selling houses with selling companies. You now understand M&A.

More truth bombs below, no job that pays well is handed to you on a platter. Eat shit sandwiches for at least 5 years and you'll then see large payoffs.

Note: the quote button no longer works for iPhone or iPad on my end on RVF.

Post: #11

I have been in real estate for 17 years. I do not recommend it.

It is a soul-sucking, all-consuming succubus of death.

Dumbfuck clients, incompetents everywhere, and tons of work spent that doesn't pay, when the deal falls.

Yeah, maybe you'll get that one 45k commission (I never have) but you'll eat shit all year to get it, and if that one magic deal falls, you're SO fucked. This is a 7-day-a-week job where you are NEVER off. Let me restate- YOU ARE NEVER OFF

Even if you go on vacation you just sit there thinking about all the fucking money you are missing by neglecting your shit- and your cliets will harrass you even then, too. And wait until (another) recession hits. You'll be in the shithouse for years.

Also, after taxes and expenses, it doesn't pay nearly as well as some people think, unless you are busting your balls and also super-lucky. I made 1.3 million in real estate in my first ten years. I am doing everything I can now to get the fuck OUT of the business.

Being a Realtor is as shitty as being a lawyer, except you dont need 4 yrs of college and student loans to get started.

People think we fuck around all day, play golf, tak on the phone in our Mercedes, and live some kind of easy life. Don't kid yourself. Any Realtor who lives like that had to eat shit and work hard for 20 years first (and show financial discipline too- not something Realtors are known for)

Anyway, it's not the worst job there ever was- but its no fucking cakewalk. If you aren't ready to sell your soul, skip real estate.

today, I'll be strapping on my Nikes and walking flyers.

enjoy!

Post: #12

@ King Solomon Good post! Are you selling in a small to medium city??

I could substitute a Ferrari or Masarati Car dealer for the real estate agent vs the cup cake man...

I like life insurance too. I know some older agents that receive over $100K the first month of every year just from risidiuals. Of course you have to build up your business....

Post: #13

I guess people are misguided by those beverly hills realtors on TV.
It looks like they are making easy money.

what's your daily life like?
how can you represent nice homes? won't they just go to some reputable company to list their homes?

Personally I don't like commercial property agent. I mean all they do is put up a sign of their phone number, I call them and they just help me with paperwork. I'd rather deal with the landlord and save agent fees to lower the rent. All the nice buildings in my area go through coldwell banker. I believe it's impossible to put your hands on this property as some individual realtor. you can work for coldwell banker but I am sure they take most of the fees......

(05-24-2013 10:33 AM)King Solomon Wrote:  I have been in real estate for 17 years. I do not recommend it.

It is a soul-sucking, all-consuming succubus of death.

Dumbfuck clients, incompetents everywhere, and tons of work spent that doesn't pay, when the deal falls.

Yeah, maybe you'll get that one 45k commission (I never have) but you'll eat shit all year to get it, and if that one magic deal falls, you're SO fucked. This is a 7-day-a-week job where you are NEVER off. Let me restate- YOU ARE NEVER OFF

Even if you go on vacation you just sit there thinking about all the fucking money you are missing by neglecting your shit- and your cliets will harrass you even then, too. And wait until (another) recession hits. You'll be in the shithouse for years.

Also, after taxes and expenses, it doesn't pay nearly as well as some people think, unless you are busting your balls and also super-lucky. I made 1.3 million in real estate in my first ten years. I am doing everything I can now to get the fuck OUT of the business.

Being a Realtor is as shitty as being a lawyer, except you dont need 4 yrs of college and student loans to get started.

People think we fuck around all day, play golf, tak on the phone in our Mercedes, and live some kind of easy life. Don't kid yourself. Any Realtor who lives like that had to eat shit and work hard for 20 years first (and show financial discipline too- not something Realtors are known for)

Anyway, it's not the worst job there ever was- but its no fucking cakewalk. If you aren't ready to sell your soul, skip real estate.

today, I'll be strapping on my Nikes and walking flyers.

enjoy!

Post: #14

I am in the Denver area, its the only city I have sold real estate in.

You can represent "nice homes" but you have to target it like crazy, and still it will take forever. "Money people" that have these houses are notoriously close-to-the-vest and just as they have a lawyer and an accountant, they have a Realtor too. It is very very hard to become known for high-dollar stuff or get to that place where you get high-dollar clients... and then, of course, they are the biggest high-maintenance pain in the ass because they are used to everyone sucking up to them.

Good news though- ALL your clients are pretty much like that now. Huge pains in the ass.

It can be a good biz but it takes a lot of hustle, a high tolerance for bullshit, and years of tenacious application. Most agents flame out in their first two years. You also have to be willing to shark other agents (one of my favorite parts) and bend a few truths from time to time. You don't need to swindle people at all, but seriously they are often so dumb you have to give them reassurances that make you roll your eyes so hard you can't help it.

I like the idea of car dealerships but for some reason their schedules are notoriously bad. Its like they'd rather just ram you into hard burnout instead of giving you a normal schedule and having a bigger staff. Also, repeat customers are hard unless you stick at a place for a long time, which is hard because of the fluid nature of those places. They also have to do a lot of ass-kissing.

I think that's my big hang-up with sales anymore. I don't give a fuck about these people and their problems (got plenty of my own) and its harder and harder for me to act like I give a shit, and harder still to beg and grovel for business. It's good to be 'dominant' with your clients, but when you need the deal, you *need* the deal.

If I could do whatever I wanted to be sitting pretty, I'd probably go spend 6 to 12 months in the frigid oil fields of Wyoming and ND and stack every spare dime I had, paying cash for a condo when I come back home. Man, if you had your home and car PAID FOR, then you really would be free to do as you please. You could work any job you wanted, and any amount of money would be enough.

Post: #15

or do it until you had 3 or 4 or 5 condos that were paid for, get a mgmt company to handle renting them out, and then live anywhere in the world subsisting off the income from them.

Retired in 5 years.

Why fuck with building a business and ass-kissing sales jobs?

I refuse to spend my energy on these soul-sucking endeavors. I already raised my kids and ate a big shit sandwich for it.

I'll spend my remaining days poolside, as much as possible.

Post: #16

Good info King. Do you think it helps to have the license for flipping/renting out your own properties, or is it not necessary?

NYC is way too expensive, so I've been looking out of state. Its a pain in the ass being that I would have to travel to buy anything, but thats just the way the prices are...

Post: #17

As far as real estate investment goes, I think a good opportunity in this current market is Non Performing Notes.

Currently, there are a lot of lenders with toxic assets. They are looking to get rid of them, often at a discount.

You could be the broker on some of these deals or you could buy them on your own.

It's certainly something I've been looking to get into.

Post: #18

@Renotime I checked some of the foreclosures for the big banks, Bank of America, Wells Fargo, etc. Didnt find much quality.

Post: #19

You want to stick to smaller banks. NPNs are before a home is in foreclosure.

Findings lists of these properties can be difficult. You usually have to sign an NDA.

Post: #20

@Captainpower

If you want to deal with non performing notes, go to credit union, community and small banks... They will happily sell the notes to you. Make sure you talk to a person with authority to sell you those notes. Expect to get turned down a few times. They are going to tell you that they dont sell notes. CALL ONCE A WEEK!