key characteristics your next business needs

Back at the time (2012), I had no idea about what wealth is and to be honest, I couldn't care less of it.

Like every other *normal* guy, I just wanted to have a job, or my own business, make a few thousand bucks per year, waiting to go 65+ in order to get my pension and die peacefully.

So, after six lost long years working as an employee in various telecommunication companies, I've decided that this job profile wasn't my thing and I took the step to start together with my sister our own little business.

We both had a love of animals, and I had aquariums as my favorite hobby. None of us had any prior experience in this business sector but we thought, "what the heck, how hard can it be?"

So we did, open our little pet shop close to our house, for convenience reasons. The place we chose, was small but it didn't require a lot of renovations (at least according to our standards), so we did most of the renovations on our own in order to keep the budget low.

After a couple of weeks, we finished with everything, like painting, installing new shelves and the first products arrived.

Things at first were moving slowly, but we thought we were just starting and that things will pick up. After about a year, we decided to move to a larger place on a more central road with more traffic.

That boosted sales quite a bit, but nothing really spectacular. For many months, I was trying to figure out ways to bring in more customers, to increase the value of each customer, various promotional techniques etc.

Around that time, November of 2014, I had the luck to meet Ilias Tsagklis, founder of wealthtriumph.com, who gave me some new perspective about business. Being an already established online entrepreneur himself, he already had a clear vision of what a business should look like and where should someone start if he/she ever wanted to be successful on the wealth pillar.

He started by giving me some mandatory books about wealth, as he called them and he asked me to update him on my progress.

As of today, I still don't know why these books moved me so much. Maybe it was the red pill of brutal truth about wealth and money I've never seen anywhere before. Or maybe the new perspective that suggested that in order to make money and live comfortably, you don't necessarily have to work like a slave all day long. You just need to educate yourself the best way you can and then take action.

And that is exactly what I did. Within a few months, I devoured many wealth related books, from the most theoretical ones to the most technical ones.

Very soon, I realized that all the variables of my current business model (brick and mortar) were a guaranteed failure.

Now, don't get me wrong, such models could provide you with a low monthly income, but when you really want to make some serious money, the classic model I chose back then, will get you nowhere.

This business model is flawed in some many ways nowadays, and that's what I want to illustrate with today's post.

After a couple of months, and after A LOT of reading and investigating for new ideas, I've decided to give Kindle Publishing a try.

On my first month, even though I was a complete nooby I made about $200. So I thought, this looks promising, let's push it. For the consecutive months my monthly income was going up, a few hundred bucks per month, but none the less up. I was very happy about and I've decided to kiss my little pet shop goodbye.

This was probably one of the best decisions I've ever made since I freed up a lot of time in order to invest in various online businesses and in myself - personal development.

In the months that followed my income was going steadily up, and the labor hours (and my stress) were going inversely down. I am now at a point where I work for about 25 hours a month on my KDP business and I make more than $3.000 from the comfort of my home.

You may be wondering at this point, why so? What was the deciding factor for that? How is that even possible.

Well, I've talked many times about scalability, magnitude, ease of implementation and all that. These are things that you need to know before you start any business.

But going deeper this path, the reason my Kindle Publishing business is such a success (in such a short time period), is that it has some intrinsic characteristics that no brick and mortar business could ever have.

According to my experience, every new business you should look for should implement all of the ingredients analyzed below. So your new business should be:

  • Time independent
  • Location independent
  • No capital intensive
  • Capable of scaling

As long as you make sure your new business incorporates all of these attributes, you eliminate a huge percentage of failure and you put yourselves in front of the 80% of other entrepreneurs out there.

Let's see those characteristics one by one:

Characteristic #1: Time independent

First and foremost, your business should be time independent. Average people have the notion in mind, that the more hours they work, the more money they make. Unfortunately, this is a linear way of thinking not, an exponential one.

Your time is your most precious asset, and you should treat it as such. Stop thinking in terms of hours of labor, and start focusing on how your decisions/actions will have the maximum impact.

Back to my Kindle Publishing business, when I first started, I was investing possibly more than 40 hours per week and my monthly income was below $1.000. Once I cracked the "code" of online publishing though, I managed to increase it exponentially and in parallel to drop the hours invested in this.

I will keep you informed about the progress of my Kindle business, but the pattern I've noticed up to now is that although the hours I put in each month remain the same (about 25 hours), the income grows steadily month by month.

Moreover, I don't really have to be there to make the sell. At this point, even when I'm sleeping my books are generating hard cold dollars for me. Each morning when I wake up and I log in my sales dashboard, I see that I have already generated around $50 from royalties, while I was sleeping.

If you want a business to be able to scale, you need to cut the connection between your time and the revenue generated.

You got only so many hours in each day, no way around it. Instead of thinking how you can work more hours, start thinking "how can I make my hours worth more?"

Another huge benefit of this is that you will be able to manage your own time schedule. You can decide exactly whenever to work. You might want to work on weekends, and take Mondays off. Fine, or you may decide to work on evenings and sleep in the morning (although this is not advisable from a health perspective) but you get the idea.

As soon as you'll feel this time independence thing, you're not going back. Ever!

Many online business models are time-independent, so this is where I would start me conquest from.

Characteristic #2: Location independent

Another big issue. I would never again make the same mistake of choosing a business that is location dependent. Even if that was the paradise.

Being able to move around, work from your home, the beach, a friend's house or while on a trip is invaluable.

Although during the last year, I make most of my work from home, have fixed issues and solved problems while I was on a weekend vacation on my mountain house or while I was on the beach.

If you manage to disconnect your business from a specific location, you will also be able to enjoy the advantages of geo-arbitrage. This is having your income streams coming from a country with a hard currency (USA, UK, Canada, etc), while you live in a cheap country like the Philippines (or my home country Greece).

The best thing about it is that once your income becomes relatively high, you can make trips around the world, see and learn new things while you're still technically working.

Again most online businesses have this characteristic embedded so that's 2 for 2 for online entrepreneurs.

Characteristic #3: Low initial capital needs

People can't help it, but every time they think about a new business, huge amounts of capital, loans, mortgages, etc. come to mind.

Forget about all that. In 2016, you can start your own online business with just a few bucks in your pocket, a laptop, and an Internet connection. That's all you really need in terms of capital.

Going back to my business, back in early 2015, I published my first book, by investing below $100. I paid about $70 for the content, like $5 for the cover, and a few gigs on promotion. That's it.

Well, you know what? Even today, after almost 1,5 half later, this very book still makes me money, on auto-pilot without me lifting a finger.

Compare this to my brick and mortar little pet shop where I have spent a whopping $10k, that barely covered the costs (and I still had to paint these freaking walls myself).

It's never been easier to start a business than it is now. There are a million ideas out there. It doesn't have to be Kindle Publishing, it could be affiliate marketing, a network of niche sites, building a huge mailing list and then promote subscriptions, or even start your own blog, build an audience and monetize that audience with 10 different ways.

You name it. Possibilities are endless. Just keep your eyes open for a nice opportunity. It's somewhere out there for sure.

Characteristic #4: Capable of scaling

Possibly, the most important characteristic of all is how scalable this new business will be. Or through another prism, how difficult is it to scale?

Maybe my pet shop could scale at some point, but at which cost? Maybe if I had invested $200.000 and 5 years of my life, I could have a second store somewhere near me again.

But. This is not what I call scalable.

By my definition, scalable is something, that can grow essentially forever, without you having to put more hours in it.

My pet shop could never achieve that. On the other hand, my Kindle Publishing business has a very nice potential to scale very much.

According to authorearnings.com, there are currently almost 10.000 self-published authors (or publishers) making more than $10.000 per year.

10k tax bracket amazon
Image credits: Author Earnings

Now, although admittedly, this is not a huge income, I'm pretty sure this is more than the standard average income for people here in Greece.

The key point here is to be able to generate some nice income for yourself in order not only to be able to save some of it but also to reinvest in other business ventures.

Summing up, let's see a table of data, comparing my two last business models for illustration purposes:

Pet ShopKindle Business
Time Investment192 hours/month25 hours/month
Initial Capital Invest.$10.000$100
Location Dependency100%0%
ScalabilityVery LowHigh
Monthly Revenue$6.000$3.000
Monthly Expenses$5.000$300
Net Profit / month$1.000$2.700
Hourly Rate$5,2$108

Have you ever put down the numbers to calculate your hourly rate?

You might be surprised...

Maybe these numbers don't mean much to you, but trust me, there's a huge difference between a $5,2 and a $108 hourly rate.

Concerning my business, I think that's just the beginning. I am pretty positive that my Kindle Business will explode in 2016, and these numbers (both monthly profit and hourly rate will skyrocket).

Stay tuned for more juicy numbers!