Geographical Limitation in Retail Business

Let's talk about making money. In the pursuit for happiness, money is one element we cannot ignore. Off course many will say money isn't everything...bla bla bla. But money for sure will get you something, isn't it?

Recently I have a chat with someone whom I have met online. This gentleman has had enough of his long hour job and is looking for a business opportunity to do. As usual, like most people he plans to start a cafe or restaurant as it seems like the easiest way to make money. Put in some money, open shop and wait for customers to walk in. No sales call required. And it's cash business. What a great combination, isn't it?

One set back in retail business that most people are aware off but doesn't take it too seriously is geographical limitation. Off course any retail business especially F&B must have good spot but that comes with high rent. So, a compromise between these 2 elements has to be considered. Furthermore, good location doesn't even guaranteed good sales and profit margin. Now, let's list down and digest each set back in retail business due to geographical limitation:

1) Rent. Good spot will have high rent. Period. What's even better? Rent renewal. Your beloved landlord will for sure notice your  business is doing great and he wants to increase rent. Do you leave or stay?
2) Changes in your surrounding environment. A good spot may not stay good forever. Road construction, traffic diversion, relocation of some offices etc will certainly have deep effect on your sales. Something you can never foreseen and control.
3) Some personal matters happen to you and you need to leave town. Your business cannot come with you.
4) F&B business requires high usage of electricity. Any increase in electricity tariff will have impact on your profit margin.
5) Town council decides to increase annual land assessment rate which will certainly cause your rent to go up.

I told this gentleman all these and he is now in doubt what business he should do. ;) Well, off course you can always get into Franchise business. Not that franchise restaurant doesn't have those limitations but at least the brand itself will help to bring in more sales. Over a longer period, those limitations will eventually have an impact on franchise restaurant too. That's the reason why a lot of franchise restaurants offer delivery or drive thru service. Delivery service expands the geographical coverage of the outlet while drive thru increase hourly sales by creating short waiting period for customers.

Thanks to Pharrell Williams for such a wonderful song to cheer everyone up.

Which edition do you enjoy the most? I personally like the Berlin edition.

Time Freedom for Life Happiness

While most people judge happiness by the amount of money they have, most of us do agree that health is the real wealth. Bed ridden rich men only make their kids happier. It's harsh to make such statement but it has some truth in it. 

The 1st requirement in the pursuit of happiness is Time Freedom. It's so irony that we all strive for something which is given free to us by GOD. In the modern era most of us don't own our time. We trade time for money. We trade 1/3 of our time for money daily and if the money is not enough we trade more of our time. This reminds me of the movie "In Time" (http://en.wikipedia.org/wiki/In_Time) where the people in the year 2169 work to earn Time. Instead of using cash or credit card, they use time to make purchases.

So, how do we achieve Time Freedom? Have the right amount of money which can sustain your lifestyle. This is where the concept of Financial Freedom comes into picture. To be Financially Free, we must not have to work to earn money. We must have the money to live the choice of lifestyle we desire. We mustn't rely on others to provide the money to us. So, asking your parents for pocket money isn't really financial freedom!

To achieve financial freedom by ourselves is a very difficult task; unless you are extremely brilliant where you work very hard for 10 years, invest the money into many properties, then retire and live a very modest life. OR you won a huge lottery jackpot. :) But, most of us spend 40 years working and retire with little savings. 

Have you ever noticed rich people get even rich quicker while the middle income people gets into more debt; from car and housing loans? Rich people relies on their network to build wealth while middle income people rely on themselves to make money. Middle income people are thought to be independent and not to rely on others. They only focus on active income instead of building network. Rich people attend social event to network, while middle income people sit in front of their PC selling. 

It's time to make that change. Get out and meet more people. Get connected and build your network. Only with good network, you can start to Leverage. When your leverage capability is placed, you will start to have Financial Freedom, which leads to Time Freedom.