Repeatability

The easiest way to start out in this challenge is to try and sell the dream of making R1 000 000 from a simple 50c piece. Most people will almost give you R5 to help you on your way. This is however not a repeatable feat. So Tanya and I chose to add an additional rule from the beginning in that we decided not to mention the challenge in any way when we are doing challenge business. That means no mention of the challenge in an attempt to secure a better price from potential suppliers, and also no playing the challenge card as part of a sales pitch. Even though a number of "deals" would be within the parameters of the game, it would (in my mind) take something away from the process.

My progress have up until now not been what I would have liked it to be, but such is life. I have bills that need to be payed every month, and so other work and business tend to take up a lot of time that I would have liked to spend on the challenge. I have thus opted for the slow and steady approach. Please join me on this journey, it may be long, you may get board, but I'm in this for the long haul all the way to R1 000 000 and even beyond. Upon reaching one million rand in cash, I plan on writing a book about my journey, the lessons I have learned and the sights I have seen, and who knows maybe that will inspire someone else to pickup one 50c piece from the side of the road and become a millionaire.

First Bonsai Sold

Yup it is a happy day for me, Annelie bought our first starter bonsai, including the baby tree, the first pot as well as a small guide on growing bonsai. Here are 3 pictures showing the Tree in the making. You need to keep in mind that this little guy has a lot of growing to do, and the direction it takes is up to Annelie, I just gave it a bit of initial shape.

Flying Fudge and a lesson about partnerships

The fudge flew out of our hands. Within 10 minutes we were sold out. We more than doubled our investment. Clearly our marked has a healthy demand for the product that we are supplying. What Tanya noted was how we each made R17 profit from our initial R10 investment. When you say it like that it does not sound nearly as good as R34 profit. If you take this feeling and magnify it until it is on the scale of a six figure business partnership you quickly begin to see why so many partnerships fail. The reason is greed. When you start dreaming about making all the money for yourself without having to share any of it with a partner, you quickly reach a point where you are no longer happy to get a cut of the cake (no matter how big said cake is). Once this feeling of dissatisfaction sets in you begin to sabotage your relationship with your partner(s).

Luckily I'm happy to share my profits with my girl friend, but the lesson I have learned here is to carefully evaluate the merits of a partnership before I commit myself to it. A good friend and business mentor of mine once said that you never do business with a partner, and I believed him, not really understanding why he made this statement. After this challenge and the discussion between Tanya and I, this lesson became more than just theory to me.

Sweets and Trees

Today will be the first official opportunity to sell fudge to the kids during their study break. For now we will be stocking small packets of chips and fudge. I'm not sure how long we will keep going with the fudge, but for now it seems to be very popular. My cash is still at such a level that the fudge sales provides a significant boost, percentage wise, so as long as this remains true, I will be investing in the business.

One question that begs answering is, how long do I invest a major part of my capital in the sweets business? Part of this question is also what to do with the small business, that Tanya and I are building, once we reach the point where the income from selling sweets is extremely small relative to other ventures. At the moment I'm weighting two options. Firstly to employ someone to handle the sales for us, or alternatively sell the opportunity and market. This is still early days, and as such these questions do not have to be answered immediately.

The lesson I have learned from my own experience, and from seeing what other people have experienced during their participation in the challenge, is that there is a delicate balance between over- and under-stocking. If you are understocked, you might loose potential income, and worse yet you may loose customers. If on the other hand you are overstocked the perceived value of your product drops, and your cash gets locked up in goods. Especially in the food and drinks market, this might be a problem, as most of these products have some sort of sell by date. Also the unavailability of cash can disqualify you from other lucrative opportunities. My approach is to diversify my portfolio together with an slower expansion of stock size. Selling R20 worth of fudge might mean doubling your money, that does not mean that the same will be true if you immediately try to obtain R40 worth of fudge.

Speaking of diversification, I will be selling bonsai starter kits. I have always had a deep love for and interest in these small trees. Recently Tanya and I bought a number of trees and started out own little bonsai project. If you want to buy a "bonsai" at a nursery you pay quite a steep price, so I figured we are able to produce the same product at a better price. Watch this space for the advertisement/official announcement. There will be a number of options available, ranging from simply a freshly trimmed tree planted in it's first pot, to a full starter kit, including a quick and dirty little manual, basic tools, your first tree and bonsai pot. These starter kits are just that, starter kits, so you will have the opportunity to shape your tree the way you want to. Both types of trees we use have character from the get go, so you can display them from day one.

Get one!