Business Opportunities: Avoid the Glamorous
I'm staying at an Inn that's part of a vineyard/winery/spa. My room is luxurious, with a view you wouldn't believe. The food in the restaurant is top notch, and the wine excellent. I'm enjoying myself, except for a nagging concern: this joint don't cash flow.
There is no way on God's green earth that this business is making money. Not even with strong appreciation of the land over the next two decades will it earn a halfway decent return. It may not break even. After the owner, who made his money the hard way, dies and passes this asset on to someone else, I can foresee it being shut down. The beautiful cabins, lodge, tasting room, all falling into disrepair.
I don't begrudge the owner the opportunity to use his own wealth to be a vintner, inn-keeper and restarurteur. But I do have some advice for the rest of you: stay away from glamor industries.
The wine business in particular has attracted thousands of corporate refugees, loaded with stock-option wealth, who think it would be great to run a little winery. If YOU get into this business, you'll be competing with people who are not making economic decisions, but rather lifestyle decisions. One of the worst things that can happen to a business is to have stupid competitors. Okay, maybe they are not stupid, but they certainly are not trying to maximize profits.
My advice to the young people looking for a career: how about wastewater treatment, portable toilet rental, drain un-plugging? Think about something that nobody would go into except for profit motive. Such industries have no excess capacity due to lifestyle choices. It's just business. Avoid the glamorous.
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"stay away from glamor industries"
Posted by:Özel Eğitim | May 13, 2008 at 09:42 PM
Ok..this comment might seem like it's coming out of left field (or maybe not)... But I was actually approached a couple of weeks ago by a friend who said "hey, let's get into the Palm Tree business."
I laughed hysterically at first but then he said it's $25,000+ per sale of... Hmm...
Posted by:Ricardo Bueno | May 15, 2008 at 11:57 PM