Without further ado, our first guest blog post! Say hello to Kelly Kilpatrick, and her post about…

The Business of Success

Sometimes, all it takes to achieve great success is the seed of an idea; when you plant it in the soil of determination and water it with hard work, and with luck as a catalyst, you’ve got a readymade beanstalk that leads to riches beyond your wildest dreams. Even if you’re a new entrepreneur armed with just a small amount of money, a viable idea for a business, and the determination to succeed, you can make it in the big bad world of business as long as you follow certain rules of the game:

· Identify a need: Any product or service should cater to a need of the customer for them to want to purchase it. Even if the need does not exist, use your creativity and marketing skills to create one. For example, chewing gum is now being marketed as something that’s good for your dental health rather than as just a mouth freshener.

· Remember basic mathematics: It’s all about profits in the long run, and you’re making a profit only as long as your income exceeds your outflow. So concentrate on reducing expenses, especially the recurring overheads that eat into your reserves and any minimal profits that you make when you begin.

· Any business needs money to stay in business: It’s all well and good to work just because you’re passionate about the job, but if you’re not making money, it’s time to close the shutters and wind up shop. The truth may be hard to digest, but staying on with a losing proposition is the worse thing to do. It’s best to be savvy and cut your losses by calling it quits at the right time.

· Marketing is the key: A good marketing campaign succeeds in making your customers think they cannot do without your product. Even if it’s not a basic necessity or an essential, you have to appeal to them in some way so that they’re tempted to buy. Some customers go for freebies while others place discounts above all else. Do your market research, identify the segment of customers you wish to target, and the plan your marketing campaign accordingly.

· Think innovative: Do something innovative at first to lure customers away from the competition, and then make them stay with the quality of your product. No matter what the initial attraction is, it’s always the consistency in the quality of a product or service that makes them come back for more.

· Don’t think of making a quick buck: Not unless you’re a fly-by-night operator, that is. If you’re in business just to make some fast money, you have to be prepared to cut corners here and there and compromise on your ethics and morals. But that kind of life leads to being on the run most of the time, so get your priorities straight and concentrate on doing things the right way even though it takes a lot longer to make money.

This post was contributed by Kelly Kilpatrick, who writes on the subject of teaching. She invites your feedback at kellykilpatrick24 at gmail dot com.

Incredibly robust roots, even after they were butchered several times.

In my previous article about Aeroponic farming, I put forward a concept for indoor-grown tomaotes for sale at local farmers markets.  The project seemed pretty interesting so, as we often do here at TG with these concepts, we decided to set up a proof of concept experiment.  We figured that if it worked out, we’d have tons of tasty tomatoes and would also be able to document the farmers market selling process.  Was it a success?  Well, we harvested lots of tomatoes and there were no great surprises, but we also learned some very important lessons that we were otherwise missing.

Doing the Legwork

Though my previous post was informative, other TG writers didn’t want to pitch in for the experiment without a lot more hard data so we wouldn’t need to re-buy equipment.  We needed to update our knowledge on this area of research as to yield expectations, energy requirements, maintenance, and how to properly measure progress.  So I hit the books, visited greenhouses and farms, read literally hundreds of horticultural papers, and am now even an official member of the International Society for Horticultural Science!  That said, all this prep was more so we would have any clue at all what to expect.

Ultimately though, this was a very rough proof of concept.

Research Findings and Design Considerations

What we discovered in preparation were some key facts, first for tomato growing, and then specifically for aeroponic setups. We decided to plant a heirloom breed of cherry tomatoes, and one heirloom mortgage lifter (very large).  Here are some relevant highlights, with the hardcore science omitted:

• Tomato plants love light.  In fact they need tons of it.  For our situation, we budget 1kW per square meter.
• For fruiting, plants (including tomato) expect warm fall lighting for about 12 hours a day.  The most efficient source of this is HPS (High Pressure Sodium).  Yes, at this point, it is much more cost effective and efficient than narrow band LED lighting approaches.
• Full grown plants can drink a ton of water.  We wanted to leave our reservoir unchanged for a week or more, so we decided on budgeting 20 gallons to out .5 meter grow.
• Ideal nutrient droplet size is around 50 microns.  This takes high pressure and small nozzles that love to clog.
• Plant density can dramatically increase from outdoor soil recommended 1 plant per .5 sq meter.  We saw some experiments as high as 30 plants/m2.  We are ambitious so went for 26 plants/m2.
• Heirloom tomatoes like to sprawl much more per tomato, and are much more unpredictable.  We wanted to see if we could create ideal conditions for them, because that’s what we want to sell (and eat!).
• Best mainstream accepted yield is about 85 lbs per square meter per year.  This works to 3.5lbs per .5 sq m per month.  We think we can do much, much better!
• Tomato plants are insidious, wretched little vines, and need constant pruning.  Big greenhouses require tons of labor.  We decided to regularly prune our plants to a single vine and top them after the first or second fruit cluster.
• The fewer fruit on the vine, the more energy is routed to them so the bigger and better they are–to a point.
• Misting would be ideal for about 1 minute every 5 to create a constant 50um fog atmosphere.

Building The Device

As you can see below, a large storage container was repurposed for the project.  We put in a 200 mesh filter, some 50-micron mist nozzles with integrated 200 mesh filters, and pressurized the system to about 90 psi using an espresso pump.  Many similar devices use Shur-flo diaphram pumps, sometimes even with all sorts of external pluming and gadgetry.  For 1 minute misting, espresso pumps do a great job on this scale (one pump per square meter, basically).  All of this was mounted on a $12 home depot furniture dolly, as when loaded, 20 gallons of water weighs a good 140+ lbs.  We used the filter’s purge connection to both drain AND fill the reservoir.

Construction was relatively simple–just a lot of PVC cutting and gluing.  The hardest part of course are the thru-hulls or “bulkheads” as plumbers call them.  These are very hard to find, especially in the size/configuration you want.  Also, you will notice that hose is used to plumb the pump itself–this is just to make it easier to move around if needed.

Note the pressure gauge coming through a bulkhead fitting. This allowed for support of the internal sprayer manifold, and for potential future expansion of the system.

The timing of the pump was done using a simple 555 timer circuit wired to a relay switching the 120v for the pump.  We wanted to just buy a timer but believe it or not, you can’t do this sort of timing for less than $85 for some reason.  Anyway, with the relays: if you carefully read relay spec sheets you will discover that, solid state or not,  these relays do not work forever.  This is an inductive load and (within a year) it will probably melt out the contacts.  For long term, you would need to dramatically over spec this part and still expect to replace it.

How did it Work?

Exactly as predicted!  We got a nice foggy mist every few minutes that was clean and excess recombined and condensed back down into the reservoir.  The clear tubing used for the pump may have led to the algae buildup we later experienced.  Also we initially used plastic barbed nipples to adapt from PVC but with moving, one broke off and created a bit of a flood (and nearly killed the plants while waiting for a replacement)–we replaced those with brass.  The primary issue aside from these was that the plant quickly became very heavy and needed support.  We velcroed on the PVC support structure you see, with metal rods providing support as the vines were attached about 10″ from the base with zip-ties.

Heirloom tomatoes at day 17 in aeroponic cloner, planted as seeds.

13 supports were made by drilling holes and filling them with neoprene disks. This allowed for minimal contact with the plant.

The Tomato Results

How much did we yield?  Well, as I mentioned in the beginning this was a very rough experiment, and as such there were many liberties taken.  The plants were sprouted and growing in a space far too small and cold for them, and when transplanted they lost about 75%+ of their roots.  After this, they had to wait for about 10 days with no proper watering device (just a small pump sprayer) while the watering parts were finished.  In addition to THAT, they had to be severely pruned because they had not been correctly maintained in their first few weeks. Lastly, the experiment had to be cut short right when the tomatoes were going nuts.

All of that aside, they did remarkably well!  They were full, healthy plants within just a couple of weeks of planting.  Once they were put under the HPS light and into the aeroponic environment, they had fruit within a week.  In total, with all its mistakes and tomato plant torture, the experiment ran 71 days at which point everything was broken down and the existing fruit weighed.

Clearly not yet ripe, but we needed test results! These cherry vines just kept on getting more and more tomatoes.

The result was 1.5 lbs of tomatoes! You can see one large 'mortgage maker' in there as well.

The bottom line: 1.5 lbs from .5m2.  Considering propogation method (take clones from these adults for new plants), harvest season length, etc, we would expect this to yield about 84lbs per year per m2–right in line with projections.  Could this make it interesting for farmers markets?  Not without a much bigger space and some cheap natural light.  1kW/m2 gets expensive quickly!  If you set up a 12m2 operation, you would have a lot of efficiencies, and it could be done in a small greenhouse in the back yard (about $1200) to save about 70% of the electricity cost.  In this case you would be yielding about 20-30 pounds per week. Go to the market every couple of weeks with your 40-60 lbs and sell them for a premium $5/lb and you would bring in $400-600/mo.   The real interesting part though, is that you could do this 365 days a year.  When the market shuts down in the winter, go to the local restaurants, and you will find very receptive chefs.

Making Money through Garage or Estate Sales

We got some feedback about the article I wrote regarding how to attend live auctions to make money, so I decided to expand on the series and write an article about how to make money by purchasing items at garage or estate sales and later reselling those items on places like eBay.

There are several similarities between garage/estate sales and live auctions:

1. Research is key – You want to find out as much as possible before hand and make decisions about which sales to attend and what to look for when you arrive.

2. You don’t want to overpay – Believe it or not, you can overpay at an estate sale or garage sale. Most people have a much higher opinion of their stuff than the average person, and their job is to get as much as possible when they sell it at something like this.

3. You won’t always walk out with merchandise – It can be frustrating, especially in the beginning, when you take the time to go to a garage sale or estate sale and get there, look around, and find nothing worthwhile to purchase. In some places, all the good deals are gone (or were never there to begin with) but in other places, you’ll be loading up your car. The key is volume and steadiness. Once you spend some regular time doing this, you should have some success when spread out over multiple sales.

GARAGE VS ESTATE SALE

The basic difference between a garage sale and an estate sale is this: In an estate sale, typically, *everything* in the house is for sale, from the furniture to the knick-knacks to the items on the mantle. In a garage sale, the owners choose what to put on sale by taking it to the garage or driveway. What should you aim for? It depends on what you’re buying. Obviously, you have more variety with an estate sale, mainly because the expensive items will probably be available for sale, whereas a lot of garage sales may only put out their less expensive items. Then again, some garage sales will have pricey or expensive items for sale, or have low-priced items that are high value items unbeknownst to the owner. When you do your research, you will figure out where to go, regardless of whether it’s a garage sale or estate sale.

DO YOUR RESEARCH

So, first, do your research. It helps to know what areas you plan to specialize in, like furniture, electronics, collectibles, books, china/silverware, and so on. Most people still advertise their sale in one of the following places:

• Your local newspaper
• Craigslist
• Pennysaver/Recycler/local free magazine with classified ads

When you look at ads, pay attention to these things:

1. Location – As clichéd as it sounds, the more expensive the neighborhood, *odds are* the stuff for sale will be nicer. Is it a guarantee? No. But when you attend a number of sales to find items for resale, you have to start playing the odds. Can you find hidden treasures in not-so-nice neighborhoods? Absolutely. I’ve been amazed at the stuff worth hundreds or even thousands of dollars that are stored in places not so nice. However, houses in nicer neighborhoods typically have nicer things for resale.
2. Keywords – When reading through the ads, look at the items they chose to put in their ad. If you specialize in crystal for example, you should first circle any ads that have the word crystal. Then look for similar items, like china, dinnerware, glassware, etc. Sites like Craigslist allow for unlimited word usage, but most people will want to mention the highlights or the biggest ticket items for sale to attract people to their sale. If most of the keywords don’t appeal to you, that sale should be lower on the list.
3. Days and hours – There are some sales, especially the estate sales, that run Friday, Saturday, and Sunday. Most garage sales are either Saturday and Sunday, or one of those days. Pick the sales where you can be there on the 1^st (or only) day of the sale, where everything is still available. If they say “No early birds,” do not show up before the time listed.
4. Proximity to other sales – You should plan to hit multiple sales in one morning or day, since you may not find worthy purchases on your first or second visit. You should plan a route, by starting at the most promising sale (based on the 1^st three criteria above) and then hitting other sales in those neighborhoods.

Tip: Google Maps allows you to plan multiple points of interest, so you can map out 10 different addresses for example, and then plan your route of attack. Plan this out the night before you go, so you can print it out and have it ready when you wake up and go!

Beyond mapping out your plan of attack, here’s a couple of other things to prepare:

• Cash. Cash is king at these sales, and the best way to get a deal is to be ready to pay cash for everything. Unless a professional company is running an estate sale, you will not be able to use a credit card, and most people don’t want to accept a check.
• Space in your vehicle. If you find a great load of stuff, you’ll need to transport it home. Better to clear out the car BEFOREHAND so you’re not struggling or making multiple trips. If you can borrow a friend’s mini-van or truck, even better!

HITTING THE SALES

Ok, you’ve mapped out your plan of attack, you’ve got the cash and the space, and you arrive at one of your sales. Here’s the five most “profitable” areas of the house I like to aim for at any generic sale:

1. Kitchen/china cabinet: China and flatware are pretty easy to resell, and good brand names are always in style (Wedgwood, Noritake, Royal Daulton, etc.) A great website for research on potential values is Replacements.com. When you are at the sale, ask for their nicest set of china or dishes, which will usually have one price for the whole set. People are always buying small quantities of nice china to complete their sets when one of their items gets broken, so you can easily buy a nice set of china, and sell it place serving by place serving. The most expensive items are the bigger items (serving dishes, tureens, platters, etc) When it comes to flatware, you are looking for sterling silver flatware, or at least, stainless steel with a familiar brand name. If you don’t see it, ask the owners if any china or flatware is for sale.
2. Hall Closets: You’re looking for things like sports equipment (golf clubs, tennis racquets, skis, etc), musical instruments (guitars, amplifiers, brass pieces, etc) and other large items with good resale values that the owners don’t want or use much anymore. Why buy tons of $1 knick-knacks when you can buy a set of Callaway golf clubs for $100 and resell each driver to make $300 for the set?
3. Garage: Tools have an excellent resale value, especially if they are in good or working condition. I look for brand names like Craftsman, Snap-On, DeWalt, and Black and Decker. Ask to plug in any power tools and turn them on, just to make sure they function. Power drills, workbenches, tool sets, and other expensive or complicated tools can have a great resale value on eBay, Craigslist, or other websites. Once again, as clichéd or sexist as this may sound, if you want a great deal on tools, ask the Missus of the household for a final price, as she is probably less attached to the items.
4. Office/Den: Books can be a great find, but you have to be careful not to overpay on something with no resale value. A lot of the old bound books, like encyclopedias or reprints of classic stories, may look impressive, and you may get a great deal “per book” when you buy a big set, but you may be stuck with a lot of pounds of paper. Textbooks, big expensive coffee table books, and old first editions of popular authors do have some resale value. The latest John Grisham novel, even in hardcover, does not have a lot of resale value. Also, anything old, vintage or antique in the office, like a 1970’s HP scientific calculator, vintage electronics items, or a used computer could have some value.
5. Bedroom closets – Designer label clothing can be resold on eBay for a decent margin, since most clothing at these sales are sold for next to nothing. I recently purchased a Tommy Bahama silk shirt for $3 that was already dry-cleaned and looks to be in “Like New” condition. This could sell for $25-50 on eBay.

BY THE NUMBERS

So, how does this break down in terms of dollars and cents? Unfortunately, your experience will vary, so let me detail several recent buys I found at estate or garage sales:

a. Swarovski crystal – I waited until the last day of the estate sale, inspected the pieces, went home to do research, stopped at the ATM, and went back to buy 4 pieces for a total of $600 (originally marked $1200, many estate sales cut the price in half on the last day) and resold ALL four pieces in 1 week’s time for a total of $1,050.

Profit = (1050-600)/600 or $450, 75% return on my money in 1 week

b. China set: I bought a full 8 piece set of Noritake china for $400 at a garage sale months ago. I sold a few place settings (1 dinner plate, 1 salad plate, 1 cup and saucer) for $160 each, several dinner plates at $49.99 each, several salad plates at $19.99 each, and several cups and saucers at $24.99 each.

Total revenue so far: $160*3 + $50*2 + $20*4 + $25*4 = $760

Profit = (760-400)/400 = $360 or 90% return in 2 months, *PLUS* I have the potential to get an extra $200 if the other pieces sell, which would take the profit up to 140%.

c. Simpsons t-shirts: I bought 2 themed Simpsons t-shirts (Pin Pals bowling shirt and Duff beer shirt) for $3 each. One sold for $41, the other sold for $24.50.

Profit = ($65.50-6)/6 = $59.50 or almost 1000% return on my money in 2 weeks.

FINAL WORDS

The key to pursuing this line of income is persistence. Plan to spend 2-3 hours each weekend to visit the different sales, plus several hours a week to put the items up for sale. You can add to this by visiting various thrift stores, but that might turn into another post. When you do this, always ask the owners if they have additional merchandise not out for display. Usually, the items “held back” are among the most valuable of the group, and because most people don’t ask, you could be the first or only person to see it even if you’re not the first person to their house. Good luck and happy hunting!

How do you turn $240 worth of compressed saw dust into $6000? Easy, cut it up and put it back together in the shape of a closet. Huh? I’m talking about custom closet construction and installation. This low-tech construction business is booming with enormous profits and the best part about it is that anyone with some carpentry skills and basic woodworking tools can do it. Custom closets are classy, easy to build, and most importantly, have huge margins. There are only a few major players so that leaves plenty of room for some competition. While it’s true people may not be buying houses, that doesn’t mean they won’t be fixing up the ones they already own.

Overview

Ok, so everyone is talking about how bad the real estate market is and how bad anything that has to do with housing is. This is all great if you’re trying to make dramatic headlines and appeal to the general public but if you look at the numbers, expenditures on residential improvements actually hit an all time HIGH in the fourth quarter of 2007. People are still spending money fixing up their old houses. My parents are a perfect example. Two weeks ago I went over to their house and I noticed that the guest bedroom had a new custom built-in closet installed. I’ll admit it, it’s nice. It’s definitely nicer then the 80’s style big heavy sliding door closet that it replaced. Being curious, I asked how much it was. $6000! I started examining the closet a little closer and I realized that it wasn’t even made out of real wood. It was made out of medium density fiberboard (MDF) which then had a thin layer of wood laminate over it. I couldn’t believe it. I thought to myself “what an amazing business, there couldn’t be more than $200 worth of wood in the entire closet”.

The Market

So who’s buying these closets anyway? Other than my parents it appears as though closets are becoming increasingly popular in general. According to the U.S Census Bureau, spending on residential improvements alone was $180,300,000 in the fourth quarter of 2007. That’s an all time record high. While I’m sure a lot of that was granite counter-tops and vessel sinks you can be sure there were a bunch of custom closets in there as well. As a matter of fact, I was able to do some digging and found out that California Closets, one of the largest players in the industry, is owned by a public company called FirstService. In looking through their annual report I found the following blurb about their California Closets division:

“The Property Services operations reported revenues of $150.8 million, an increase of 12% versus the prior year. Of the increase, 9% was attributable to internal growth, 2% to acquisitions and 1% to foreign exchange. Internal growth was led by increases in royalty revenues at our major franchise systems. EBITDA for the year was $30.6 million, 19% higher than the prior year, and the EBITDA margin increased 110 basis points to 20.3%. The margin increase was attributable to California Closets and Paul Davis Restoration, where revenue growth was coupled with reduced expenses, including the recovery of bad debts and the deferral of a franchisees’ conference.”

Basically they’re saying that the California Closets and Paul Davis Restoration businesses are operating quite well as they’re responsible for a 1.1% growth in EBITDA margin.

The Numbers

Startup Costs

These items here are just the basics. I’m sure as you progress you’ll come across more tools that you’ll need but the following should get you going. What’s interesting about this business is that it’s one of the few industries where you can collect a fairly substantial deposit up front. According to my calculations you could actually fund your entire startup with the deposit from your first job.

• Table saw - $500
• Circular Saw - $100
• Router - $150
• Air Compressor - $300
• Staple Gun - $100
• Cordless Drill - $100

We’ll use my parent’s closet as an example and make some assumptions based on retail pricing for the material to see just how much we can make on a single job.

Total Revenue - $6000

Expenses:

• MDF- $240 (6 – 8’x4’ sheets)
• Hardware - $200
• Laminate - $300
• Building Supplies - $100

Total Expenses including startup costs - $2090

Net Profit - $3910

As an alternative, you may want to consider using REAL wood such as Birch or Oak for your custom closets.  Real wood is more expensive then MDF but it’s typically considered a more luxurious item and commands a higher price.  Furthermore, in my opinion, real wood is easier to work with as it will not require laminating; you can simply stain it.  The cost of real wood is about 30% higher then MDF but stain is quite a bit cheaper then laminate and you’ll be able to charge more for the closet in the end.

My Take

If you like playing with wood I would take a close look at the custom closet industry. Input costs are minimal and the barrier to entry is fairly low requiring only a few thousand dollars worth of tools to get started. It’s true, the housing market is in a depression but the home renovation market is still in full swing and closets are becoming increasingly popular as homeowners struggle with storage. While it’s a low-tech business without a lot of glamour, the margins are huge. Besides, who really cares how glamorous it is as long as you’re driving around in a Gallardo; WITH your tool belt on and saw dust in your hair of course.

Comic Books as… an Investment?

When you say “comic books,” most people get an image of ten-year-olds reading a worn copy of a Superman comic book they just bought at the drugstore, that they probably roll up and stick in their back pocket after reading, and eventually abandon comic books when they grow up some more and discover girls. The true market of comic books is anything but this, as the majority of comic book readers and collectors are adults, many of whom do NOT live in their parents’ basements. The last 10-20 years have brought comic book characters into the mainstream, primarily through successful movies like Spider-Man, X-Men, Sin City, and now Iron Man and Batman: The Dark Knight. Additionally, video games, action figures, and tons of licensed material have brought the comic book characters into everyone’s home in some form or another. Comic Con International in San Diego attracts upwards of 125,000 attendees per year and climbing.

But what about the items that started it all? What about those paper “magazines”, those 32-48 page comic books that used to cost a dime or 12 cents at the newsstand? Believe it or not, those comic books can be seen and managed as an investment, like a stock or commodity. There have been recent adoptions and advancements to make it easier and more reliable to “manage” your comic book portfolio. Want an idea of how big a collection can be? Nicholas Cage auctioned off his personal comic collection in 2002 for over $1.6 million, including ONE comic book that sold individually for over $130,000!

Why are comics collectible?

When people hear that individual comic books have sold at auctions for over $100,000 or even $200,000, they wonder, “Why is a comic book worth so much?” Simple – supply and demand. Most comic books were read and abused by kids, so the supply of comic books that are in excellent, pristine, “near mint” condition is very low, making the books that are in great shape a rare commodity. In addition, most mothers tossed out their kids’ comic books after a certain age because no one saw them as a collectible item. Finally, comic books are made of paper, which means they age, degrade, and can fall apart if not well maintained.

Take that low supply and add in the demand from adults who used to read comics as a kid. As those kids get older, gain disposable income, and want to recapture a part of their youth, items from their childhood (that are in short supply) go up in value because of demand. Add in the demand from millions of kids and adults seeing their favorite characters, like Superman, Batman, Spider-Man, and the X-Men, in TV shows, cartoons, and big-screen movies, and you have a growing number of people who want to own those older comics and see the origins of their favorite character.

Beyond the issues of supply and demand, a rare comic book is only worth something if there’s a collector out there willing to pay for it. Beyond the supply and demand issues, there are several key factors that make a comic book less or more valuable, which is something you should be aware of if you want to go into this arena:

1. First issues. Collectors love to get the 1st of something, whether it’s the first stamp, a rookie baseball card, the first striking of a new coin, and the first issue of a comic book is no exception. Today, comic book companies love to put out a #1 issue of some new comic title, and the numbers show that they get an automatic bump because the title is numbered #1. Usually, if the comic has any heat, the #1 issue will be among the most valuable of that series. For example, Action Comics #1 is the most valuable comic in that series, but that is also because it’s the first appearance of Superman. (see next point)
2. First appearance of a character. The main reason a comic that is not numbered #1 could be the most valuable is if a popular character made their very first appearance in that comic book. The two most notable examples are Detective Comics #27 from 1938, which had the first appearance of Batman, and Amazing Fantasy #15 from 1962, which had the first appearance of Spider-Man.
3. Origin story of a character. While a character may be introduced in a specific comic book, we may not get the full story of that character until later on, or perhaps the origin story is repeated in another comic years later, to give new readers an idea of how the character got started. Origin issues are highly sought after by collectors, because the origin is rarely discussed in detail and hard to find, usually. While Detective Comics #27 introduced the Batman, Detective Comics #33 discusses his origin, making that comic more valuable than others near issue #33.
4. First issue written or drawn by a particular writer or artist. While the characters are typically the most important part of a comic book, the fans have paid more and more attention to the writers and artists that make that comic book. The first time a writer or artist contributes to a particular comic book, the fans may hold that comic in more regard or desire, which drives up the price. When legendary writer and film director Frank Miller started in comic books in the late 70’s, he took over drawing the Daredevil comic book with issue #158. That issue has a much higher value than other issues before or after it because of Miller’s contribution to the comic.
5. Death of a character. Comic collectors love the first appearance of a character, but they also treasure a comic that has the death or demise of a popular character or villain for that matter. Before Spider-Man and Mary Jane Watson were a serious couple, he was dating Gwen Stacy (seen in the Spider-Man 3 movie) until she was killed by his arch-nemesis the Green Goblin in Amazing Spider-Man #121. The next issue, #122, featured Spider-Man dueling the Green Goblin, and the Goblin dying by his own glider. Both of those comics are worth hundreds of dollars in pristine condition, more than any surrounding issue of that comic series.

Books that contain a important character introduction or death, or a new writer or artist to the comic team, are called “key books” by comic collectors, and are often the blue chip standard when it comes to comic investments. These are books that will only get more rare as time goes by and shouldn’t drop off value too much.

Comic Book Terminology 101 – The Basics

In order to invest in comic books, you don’t need to know necessarily who could bench press more or win in a fight. But you should know some of the basic terminology, especially when you start searching for items to buy.

As far as when comic books were published, it is broken up into different eras:

• Platinum Age (1890-1934) refer to comic strips published as books, like The Yellow Kid and the Katsenjammer Kids.
• Golden Age (1934-1955) refer to comic books, from the 1st comic book (Famous Funnies #1) to the introduction of Superman, Batman, Wonder Woman, Captain America, the Human Torch, and others published by companies such as National (now DC), Timely & Atlas (now known as Marvel), and Fawcett (publishers of Shazam, aka Captain Marvel). The end of the Golden Age, in the 1950’s, was due to the persecution of comic books by folks like Dr. Frederic Wertham (who wrote Seduction of the Innocent) and the government, which resulted in the Comics Code Authority. Romance, horror, and western comics were the most popular comics in the 50’s.
• Silver Age (1956-1969) refer to the “rebirth” or return of superheroes to the comic book, starting with a new incarnation of the Flash in Showcase Comics #4 (1956) and exploding with Marvel Comics’ new superheroes, like the Fantastic Four (1961), the Hulk (1962), Spider-Man (1962), and the X-Men (1963).
• Bronze Age (1970-1979) refers to the second phase of popular superheroes created during the 1970’s, or the next phase after the explosion of superheroes in the 1960’s. The Bronze Age saw the rebirth of the “New” X-Men, with new characters like Wolverine, as well as grittier characters like the Punisher.
• Modern Age (1980 – present) refers to the current age of comic books, including the trend of more self-published and alternative comic books, from the Teenage Mutant Ninja Turtles, to Hellboy and Sin City, to Spawn and Witchblade and other comics formed from Image Comics, an offshoot of seven popular comic book artists who started their own publishing network.

The next indicator of value has to do with the condition of the comic book, i.e. what shape is it in? What damage, if any, is there to the comic that’s visible? What color are the inside pages along the edges? (Are they still white when they were published, or have they faded into a cream or off-white color?) Basic definitions are:

• Near Mint (abbreviated NM, or 9.4 out of 10) – The comic has very few flaws in terms of creases, bends, stress lines along the spine, and so on. (By very few, I mean at most 1 or 2 tiny tiny tiny stress lines) This comic has ZERO rips, tears, stains, dents, folds, and major creases. NOTHING is missing from the book (no coupons or stamps have been cut out) and there is no writing or added coloring on the cover. (one exception with older comics – if someone wrote a month/year, like 12/5 on the cover, that is the delivery date, and in most cases, is an acceptable flaw)
• Very Fine (abbreviated VF, or 8 out of 10) – The comic has a few visible flaws, but nothing is missing and there is no major flaw with the book.
• Fine (abbreviated F, or 6 out of 10) – There are several flaws with the book, possibly one big fold or crease, but it looks better than the average “well-read” comic book in terms of the gloss, color appeal (not faded, colors still shine a bit), and lack of major flaws.
• Very Good (abbreviated VG, or 4 out of 10) – This is what a typical comic from the 1960’s looks like today. There are spine stresses, folds, creases, but nothing major. (no rips, big tears, stains, or pieces missing from the comic)
• Good (abbreviated G, or 2 out of 10) – Saying the comic is in “Good” condition is not a good statement. Good implies that there is at least one major flaw with the book (a rip, tear, stain, piece missing, etc) and lots of smaller flaws. Comics in this shape or worse are known as “reader copies” because as investments, it’s hard to get a big appreciation in value. Most high end collectors don’t like to deal with comics in this bad a condition, so even though the experts will say Good is worth 10% of the NM price, it’s hard to get more than 2-3% of the NM price for a Good copy. (The exceptions are the really rare Golden Age key issues. At $100,000 for a VF or NM copy, a Good will get you several thousand)
• Fair (abbreviated Fa or Fr, or 1 out of 10) – This is a comic book that is barely in one piece. The cover of this comic is probably not even attached to the rest of the comic anymore, pieces of the cover or inside the comic are probably missing, and maybe some inside pages are missing too.
• Poor (abbreviated Pr, or 0.5 out of 10) – Don’t even ask. Imagine crunching, folding, spindling, mutilating, and stomping on a comic book, then pouring some coffee on it and putting it in your dog’s mouth. The result is a Poor comic book. Then again, if it’s an Action Comics #1 with the 1st appearance of Superman, a Poor copy is still worth hundreds of dollars, if not more.

Formalizing your Investment

Until recently, most comic dealers would visually inspect a comic in order to determine the grade, or condition, of the comic. There is a yearly price guide, called the Overstreet Price Guide, that would publish all the known comic books and estimated values, based on their team of advisors, many of whom operate large comic book stores or mail-order/convention businesses. The price in “the Guide” would determine the going rate of a comic book, either at a show or in a local comic show.

Two things have dramatically changed the comic collecting market:
1. eBay
2. Comics Guaranty Company LLC, also known as CGC.

The first one should be obvious. eBay allowed collectors to reach everyone without a dealer or capital investment, and the competition on eBay forced prices downward on most of the common comic books, but gave avenues for rare comic books to have a global bidding audience, instead of a local company or auction company.

The second company has to do with a common standard for appraising comics. CGC offers a comic appraisal service, similar to appraising baseball cards or coins. The comic is evaluated, assigned a number referring to the items’ condition, then locked in a plastic case to preserve the item and given a label with all the valuable information. This company started offering their services in the early 2000’s after a lot of controversy. After all, you can appraise a baseball card or coin, but still “enjoy” or see all of it while the item is in a plastic case. But how can you read a comic book after it’s locked in a plastic case? (If you open the CGC plastic case, it invalidates the appraisal) While many dealers decried this loss of enjoyment value, others welcomed a third party grading system that would allow them to trade and sell comics without disagreement on the condition. (One other thing – CGC checks to see if the comic book has been restored, meaning someone purposely tried to fix damage or flaws with the comic so it would have a higher condition. Restored comics have a lower value than unrestored, or “natural” comics with a high condition.)

This means that you can buy and sell comics with a fixed grade/condition, and you can track those sales over time to know what people are actually paying for a particular comic book. There is a website, called GPAnalysis, where you can pay a monthly subscription fee to know exactly how much an Amazing Fantasy #15 sold for in different conditions. In a sense, this gives you pricing information like a stock, including trading ranges, last price sold, average price sold, and whether prices are going up or down.

Recent sales of Amazing Fantasy #15

Getting Started

So, what should you do in order to get started?

1. Buy the Overstreet Price Guide. Don’t rely on this book for the pricing information. It will tell you which comics are rarer than others, why certain comics are more rare, and give you a directory of every major comic dealer, auction company, and outlet for buying and selling rare comic books. There are online equivalents like ComicsPriceGuide.com, but for quality of information, Overstreet is still the standard, especially for older comics. They’ll even show you how some Golden and Silver Age comics have appreciated in value by 5, 10, or even 20 percent in the last year or several years.

2. Attend a convention like San Diego Comic Con. Believe it or not, every year at San Diego, you can find SEVERAL copies of Action Comics #1, Detective Comics #27, Marvel Comics #1, and other $100k+ comic books for sale, that you can hold and look at in person. Seeing the market in action, looking at some comics, reading the label of a CGC appraised comic, and talking to the dealers will give you an appreciation of what you are dealing in. There are other big conventions in the U.S., like the New York Comic Con, Wizard World Chicago, Motor City Con in Detroit, Heroes Con in Charlotte, MegaCon in Orlando, and WonderCon in San Francisco.

3. Look for comics to buy. You can always scout eBay, but be prepared to pay a decent price for it, especially if the comic has already been appraised by CGC. You can try the non-traditional avenues like flea markets, auctions, swap meets, garage sales, etc. but most of the valuable comics won’t be there. Most people understand that old comics have some value and will use eBay or their local comic shop to get it sold. Even I find some deals at places like local auctions, but you have to be consistent and willing to hunt. Be ready to buy small collections to get at the valuable comics inside that collection, or look for the mis-described or poorly filed comics for a great deal.

You can also buy mid-range and expensive comics directly from companies that sell direct or have special auctions every quarter, like:

• ComicLink
• Heritage Auctions
• ComicConnect
• Metropolis Collectibles

There are comic conventions, lots of local comic shops, and you never know if your friend is sitting on an old collection.

4. Avoid comics from the 1980’s and newer. I’ve been in comics for over 15 years, so once people hear I deal in comics, I get people offering me their collections all the time. Unfortunately, most of those collections are from the 1980’s, 1990’s, or the last few years. While there are some gems and hidden treasures in comics from the Modern Age, overall it’s not a good investment. Why? Comics went up in cover price more starting in the 80’s, from 25 cents to 50 to 75 to $1.00 within a few years, which meant that kids kept their comics in better shape, using special plastic bags and cardboard backing to keep their comics in Near Mint condition. Mothers stopped throwing out their kids’ comic collections since reports started to come out about valuable comic sales, thanks to things like Superman the Movie and the Spider-Man TV show. The 1990’s was a time of speculation in the comics industry, where millions and millions of copies were overproduced because everyone thought they could get rich off comics, based on events like “The Death of Superman” in 1992. All of this adds up to too much supply and not enough demand. There are some good key issues from the 1970’s, and most comics from the 1960’s and earlier are a good investment, but unless you want to drown in a sea of paper, be careful of the general “age” of any collection you buy.

5. Decide on your investment level and look for items within your budget. As I’ve mentioned, there are comic books that sell for hundreds of thousands of dollars, and lots of options all the way down the ladder. You can diversify and hold comics from different eras, different characters, and different companies. You can specialize in one area, like Superman or Spider-Man or Silver Age Marvel comics, but just like other areas, fluctuations in the market can kill you or bless you. You can go for high grade key books, or hope to build an “entire run” or all the consecutive issues of a comic book title.

6. Capitalize on upcoming trends in comics, like comic book movies. One of the biggest drivers of short-term price appreciation for comics has been the big-screen adaptations of movies. I first saw this with Tim Burton’s Batman in 1989, which drove prices of all older Batman titles higher. But even as recent as this summer’s Iron Man or The Dark Knight, comic book movies cause a spike in the price of “back issues” or these older comics, as people are waiting in anticipation and new fans go looking for the old books to have in their collection.

Because of this, keep your eyes (and wallets) on the following books:

Incredible Hulk #181 – 1st appearance of Wolverine (X-Men Origins: Wolverine, May 2009) Copies range in value from $150 in Good to $500 in Fine/Very Fine to $2,000-3,000 in NM. (This was a $1,000 book in NM less than 10 years ago)

Journey into Mystery #83 – 1st appearance of Thor in Marvel Universe (Thor movie expected in 2010) Copies range in price from $600-700 in Good to $3,000-4,500 in Fine/Very Fine. (Very few copies exist better than Very Fine, and those are in the $15k-45k range)

Avengers #1 – 1st appearance of Avengers team of Iron Man, Hulk, Giant Man, Wasp, and Thor (Avengers movie expected by 2013) Copies range in price from $300-400 in Good to $1,500-3,000 in Fine/Very Fine to $9,500 and up for copies in NM.

On the low range, copies of Watchmen #1-12 from 1986, which used to sell for a few dollars each, are rapidly rising in price due to the March 2009 movie from Warner Brothers. I recently sold a Watchmen #1 for $21 and have seen issues of #1 sell for $40-50, where a few years ago they were $1-3 each.
In general, key issues you can count on include:

Golden Age:

• Action Comics #1 (1st Superman)
• All-Star Comics #8 (1st Justice Society of America)
• Captain America Comics #1 (1st Cap and Bucky)
• Detective Comics #27 (1st Batman), #38 (1st Robin)
• Marvel Comics #1 (1st Human Torch, Sub-Mariner)
• Sensation Comics #8 (1st Wonder Woman)
• Whiz Comics #1 (1st Captain Marvel)

Silver Age:

• Action Comics #252 (1st Supergirl)
• Amazing Fantasy #15 (1st Spider-Man)
• Amazing Spider-Man #1 (2nd Spider-Man, 1st in his title)
• Amazing Spider-Man #3 (1st Doctor Octopus)
• Amazing Spider-Man #4 (1st Sandman)
• Amazing Spider-Man #14 (1st Green Goblin)
• Batman #155 (1st Silver Age Penguin)
• Batman #171 (1st Riddler)
• Fantastic Four #1 (1st FF)
• Fantastic Four #5 (1st Doctor Doom)
• Journey into Mystery #83 (1st Thor)
• Showcase #4 (1st Silver Age Flash)
• Showcase #22 (1st Silver Age Green Lantern)
• Tales of Suspense #39 (1st Iron Man)
• Tales to Astonish #27 (1st Ant Man)
• X-Men #1 (1st appearance of Cyclops, Marvel Girl, Iceman, Professor X, etc.)

Bronze Age:
The top 3 are:

1. Incredible Hulk #181 (1st Wolverine)
2. Giant-Size X-Men #1 (1st new X-Men team w/Wolverine)
3. X-Men #94 (relaunch of X-Men title, 2nd appearance of new X-Men team)

Others include:

• Amazing Spider-Man #121, 122 (Death of Gwen Stacy & Green Goblin)
• Amazing Spider-Man #129 (1st Punisher)
• House of Secrets #92 (1st Swamp Thing)
• Iron Fist #14 (1st Sabretooth)

Modern Age:

• Amazing Spider-Man #300 (1st Venom)
• Daredevil #168 (1st Elektra)
• Teenage Mutant Ninja Turtles #1 (1st appearance; watch out for counterfeits!)
• Uncanny X-Men #266 (1st Gambit)

The Final Word

Whether you buy and hold, or buy before a movie and sell after it’s come out, you should always store your comics in a cool, climate-controlled environment with no smoking, pets, or children within reach of the comics. (Safety Deposit Box come to mind?) You can store the comic in something called a Mylar plastic bag and Acid-Free cardboard Backing Board, or get the comic appraised by CGC and it will be stored in a plastic case. You would then sell your investments on eBay, at conventions or big auctions, and either reinvest in other comics, or just cash out. There are other tricks to raising your investment level, like getting autographs on your book that are authenticated (see my other post Turning John Hancocks into Benjamins) but I’ll leave those tricks for another posting.

Autographed memorabilia is a multi-billion dollar industry around the world, that exists in several categories. Signed entertainment memorabilia, historical memorabilia, sports memorabilia, collectibles memorabilia, and author-signed books are just a few of the biggest genres of autographed memorabilia. So, the question becomes, how do I turn this desire for people to own a “piece” of their favorite celebrity/athlete/author into my own business? Here is a way to turn your business idea into a profitable enterprise.

Overview

Startup costs are basically zero on this, but if you want to think big, you should have a good capital reserve ($5,000-10,000 or more, depending) if you want to invest in some inventory or to pay for a large number of autographs from a high-profile individual. Obviously, the first thing you should do in this area is pick your niche. While you could provide any type of autograph or signature, depending on the client, your customers will gravitate towards you if you have a specialty, or main focus.

Once you identify your main niche, start investigating that area. In several of these industries, there are companies and forces at work to “clean up” their industry and capture more of the profit for the celebrity doing the autograph. Sports memorabilia is probably the biggest and well-known category for autographed items, and therefore, the biggest target for fraudsters. Some surveys acknowledge that up to 90% of signed sports memorabilia is fake, which leads to the need for authentication, which I’ll get to in a minute.

Because of fraud (and in my opinion, to capture more profit) certain manufacturers are offering signed items directly to the public. Upper Deck, for instance, offers their own line of signed sports memorabilia. There are a network of dealers in the Universal Autograph Collector’s Club that certify their signed entertainment merchandise. Most of the time, you will be competing with local stores and online merchants, but finding a manufacturer like Upper Deck gives you an idea of the types of upper limit prices you can charge for certain items.

The manufacturers aren’t the only ones getting into the game, if you will. Many celebrities or talents are participating in or coordinating their own signings, where they collect a fixed price per autograph. Many times, especially in areas like sports or comic books, these signings are associated with conventions in their specialty. In fact, there are now conventions specifically designed just for fans to buy autographs from their favorite TV or movie celebrities from today and yesteryear. Some examples include:

• Hollywood Collector & Celebrity Show
• Creation Entertainment, which runs all sorts of sci-fi convention/autograph event
• UACC Autograph Events Calendar
• Signingshotline.com Athlete Signing Lists

Authentication

If you are getting a celebrity or talent to autograph merchandise directly in front of you, well, then, you know it’s real, right? Unfortunately, your customers aren’t so sure. Because of the immense amount of fraud in this industry, having your signatures authenticated can be almost as important, or even MORE important, than the signature itself, especially for items that have already been signed.

FYI, for historical memorabilia, you will probably hear the word “provenance” more than authentication, but the two are similar. Provenance means you can prove or demonstrate that the item is as old as you say it is and that it was owned or signed by the person in question. Typically, this means that you have a signed statement, copies of records or logs, or some sort of written evidence (perhaps a letter from the estate of this person) that the signed item is genuine.

Nowadays, if you attend a public signing for a celebrity or athlete, the organizer will provide some sort of Certificate of Authenticity, hologram, or other certification. Otherwise, you will need to pay an authentication company per signature to certify whether it is real or not.

For Sports items, the company to contact is called PSA/DNA. You will pay a fee per item, and if there are multiple signatures on the item, you pay an extra fee for each additional signature. The prices vary by person, with a current mid-range ballplayer averaging $20 a signature for authentication, while legends such as Mickey Mantle, Ted Williams, or Joe DiMaggio are $75 or higher. You can submit your items through a sports convention, a sports dealer who is an authorized dealer for PSA/DNA, or in limited cases, directly to the company itself. They will provide you with a Letter of Authenticity, and a hologram label (with matching serial number to the letter) to affix to the item or outer casing of the item.

For comic books, the company to contact is called CGC. They have a program called the Signature Series label. If one of their witnesses is present when the items are signed, and you then get the item appraised by CGC, the label will have a special color indicating that the signature on the item was witnessed and authentic. You cannot bring pre-signed items to a CGC witness to be graded/appraised. The witness will take care of presenting the item to the celebrity (or watch you as you speak to the celebrity), submitting the items for grading/appraisal, receiving the items back from appraisal, and sending the item back to you. The fees are negotiable, as it depends on which signatures you want, which comic books you want to get signed, and how many books you plan to submit.

For entertainment celebrity autographs, you can contact a dealer associated with the Professional Autograph Dealers Association to examine and provide authentication for you. In addition, PSA/DNA has branched out to accept both entertainment and historical autographs for authentication as well.

Tips

1. Do your research – You will need to know what items will get you the highest return for your signature, or have a client list of exactly what requests will pay you the most. For example, if you are getting a signature by Michael Jordan, you would want to invest in an authentic jersey, and if that wasn’t possible, try for something like a basketball or rookie basketball card. Use sites like eBay to see what items sell the most often and for the highest price.
2. Find out where the talent will be – Yes, there are autograph dealers that send people to every movie screening and awards show, with 8×10 glossy photos and sharpie markers in hand, hoping for that quick autograph as a celebrity walks by. More and more, however, certain celebrities agree to do specific signings at different locations, either for free (to promote themselves or a product) or for money. Use the Internet, check sites like fan forums for that celebrity’s current TV or movie project, or events guides, to know where they will be.
3. Get to know the star’s management team. This is probably, by far, the biggest tip for success, especially if you want to scale your business. Waiting in line and having access to a star for 1 or 2 signatures helps you get started and maybe generate a few bucks. Getting to know their assistants, agents, and managers, and arranging a private session to get 100 autographs for a fixed price allows you to have instant, salable merchandise to many customers. (One avenue is celebrities who work with a system like IPA Network, www.ipanetwork.com, that coordinate everything for a private signing)
4. For pre-signed items, invest in authentication services. If you pick up a collection of items that are already signed, it usually pays to invest in getting the signatures authenticated or to find someone to provide you the Certificate of Authenticity. If you’re unsure of whether to invest, take the average item, go to eBay, and check the average price AS IS and with a COA. If the difference is more than the cost of authentication, you know what to do. If there is no difference in price, don’t waste your money. Typically speaking, the bigger the star, the more it’s worth authenticating.
5. Timing is everything. While some of you may find this obvious, selling signed baseball memorabilia does better during baseball season, than in the off-season. For celebrities, selling an item right before or on the opening of their new movie or TV show season will yield a higher price. Beyond that, however, current events in these people’s lives will affect the pricing. I represented a client who had signed Barry Bonds items and wanted to sell them right away. This was about 2-3 months before Bonds broke the home run record, and while I pleaded with my client to wait a while, she said no, and I sold the merchandise. After Bonds hit his 73rd homer in one season, I checked the prices again, and they saw a rise anywhere from 50-100% and beyond. If a celebrity may win their first Oscar, hold off. And yes, any time a celebrity passes away, the value of signed merchandise shoots up. If they have an enduring legacy, you can sell at any time. If the celebrity is more of a fad or shooting star, sell your stuff immediately!

The Bottom Line

Once you pick your niche, make your connections, and build up your inventory, you need to start finding your customers and reselling this merchandise. While there is a lot of competition on eBay, selling some of your items on the world’s largest auction site will help you get started. Having your own web site, setting up at targeted conventions, and making alliances with other organizations can help you grow your business. (For example, if you can get signed items from the cast of Lost, set up an agreement to resell these items through Lost fan clubs or fan blogs.) As you build up contacts and experience, you will hopefully see new opportunities and stay up to date on the wants and desires of your customers. LiveAutographs.com, for instance, offers personalized video greetings from your favorite celebrity. Who knows, maybe you’ll change the industry like LiveAutographs.com!

Do you have a certain passion for something? Are you always explaining to other people how to get a certain thing done, or relaying your experience in an area lots of people want to learn? If so, and you don’t have a fear of public speaking, you may want to consider the business of running your own seminars. You can go as large or small as you want, renting out hotel ballrooms to teach thousands of people the newest tricks in real estate, stock buying, Internet wealth creation, or getting in touch with your inner strength. Most big speakers, however, started by hosting their own small seminars and building an audience, while perfecting their message and developing their own products to sell.

The Ultimate Goal

If you’ve got a hot topic, you can make money simply by hosting seminars every month or every other month. Most speaker’s ultimate goal is to use the seminars to sell products. What do I mean by products? I mean items that your students would want to buy that are for sale in the back of the room. Believe it or not, some of these items can be made with a low budget and quick time frame.

Common products sold at seminars include:

• Books (Regular print books, or eBooks sold on CD-ROM. You can get 5 free eBooks from Fred Gleeck to see a great example of what solid eBooks look like. )
• Audio courses (Remember the binder of tape cassettes? Today, speakers sell audio programs on CD-ROM as MP3 or WAV files, and some people are selling them now on Flash drives. Rounds Miller put out a great audio course called Professional Speaking for the Clueless, that discusses how to set up your classes to make money.)
• Video courses on DVD-ROM (Check out the eBay Explained DVD I made from a 3 hour course on How to Buy, Sell, and Profit on eBay)
• “Systems” or multimedia packages of different items designed to teach a full course of some skill or money-making system.
• Personal kits (for example, Franklin Covey sells organizers, binders, and calendars to their students)

The last main revenue stream for teachers putting together their own seminars is the hopes of getting speaking or consulting engagements from their students, which can be hundreds or even thousands of dollars in revenue. Nothing screams expert quite like the person who teaches the subject on a regular basis in your area.

Therefore, you need to decide on your ultimate goal. Is it:

a) Revenue from ongoing classes through admission and some products
b) Revenue from selling a variety of products in classes and online
c) Revenue from becoming a speaker or consultant in your area

Keep in mind, there are many speakers who make money in all three areas. However, your ultimate goal will help guide you on whether to focus on promoting your classes (a), building up a set of products (b), or using your classes to advertise your experience as a speaker or consultant(c) as you go forward.

Startup Costs

$600-1000: A decent laptop to develop your curriculum (Look for a laptop with Microsoft Office, so you can use Microsoft PowerPoint for slides, if you like Powerpoint)

$500-1000: An LCD projector to show your slides to your students (if you rent this, you will have paid this amount after 2-4 rentals. Buy it and it’s yours forever, or until it breaks, whichever comes first)

$100-150: Flip or Aiptek hand-held camcorder to record classes and for rehearsals. Trust me, this will come in handy down the road if you don’t see the value already.

Total: $1200-2150
50-100 hours: Development time needed to create your first class

Getting Up and Running

So, if you’ve chosen a topic and are ready to put on a class, you will want to get started right away. These five steps will prepare you to stand in front of a room of people sharing your expertise, and getting paid for it.

Step 1: Research the Competition

Get out there, do Google searches, look around your city, and see what classes for your chosen topic already exist. I would check with community colleges, vocational institutions, community centers, and any other adult education company, like a computer school, to see if your topic is being taught. If so, find out what is covered in those classes, see if there’s a missing area not being covered, or even consider attending the competition to see what you are up against.

Step 2: Develop Your Course

Put together your outline and estimate your class length. Come up with your main points to cover in the class, and decide what content you will cover.

• Is your class going to be a Basics course for people completely unfamiliar with the topic? (one or a series of 1-2 hour classes might be best)
• Are you going to create an Intensive course for people at different skill levels? (A half-day (3-4 hr) or full day class might be best)
• Or are you going to create an Intermediate or Expert course for people who are yearning to reach that next level? (At least one day, perhaps a multi-day seminar; Yes, you are limiting your potential students, but that focused targeting and expert knowledge is something pay a lot more for than the basic information)

Some people dive into making slides on PowerPoint, and estimate their class length by the number of slides or topics covered.

As an example, you can download my eBay Class PowerPoint slides I developed when I taught for the Learning Annex. A rule of thumb I learned is that, on average, you will spend 1 minute talking per slide. So, for my 3 hour eBay course, I had over 150 slides, and I was always scrambling to finish in 3 hours, especially when I had a lot of questions. (Some of my slides are jam packed with information.)

Do the research and fill in the gaps. While you may have an outline or something close to an outline in your head, you may have some gaps as you start to map out your course. Lay out your entire course, then go back and do research on the areas you are not as clear on, until your course curriculum is complete. Feel free to hit up your local library, bookstore, or the grand ol’ Internet to get the most accurate and up-to-date information.

Step 3: Test Everything

If you can get a few friends to sit still and listen, great. There’s nothing like the “rehearsal” as you get up there and talk through your material. If you have to, get in front of a mirror (or in front of a camera) and run through your course yourself. Videotaping your course is a GREAT way, as a tip, to have a product available to sell. You may only want to tape yourself after you’ve done at least 1 or 2 “test runs” of your course, so you can work out most of your issues before the cameras roll.

Step 4: Create a Product

You should have something for sale for your students, so that should be prepared before your 1st class. Options here include:

a) A workbook or handout packet, which can include your PowerPoint slides, notes pages for them to take notes, questionnaires, practice exercises, etc.

When I taught my eBay classes, I would prepare a 30 page handout of my PowerPoint slides. I would find a cheap local copy shop and pay $1.20 per set, and sell them at the class for $5.00 a set, with 90% sellthrough of my students.

So, let’s say you teach 100 students per month. (25 students per week) One handout set could net:

100 students * 90% sellthrough * 12 months * $3.80 profit = $4,104/yr

I then started adding more content to my handouts, like pages of URL web addresses and case studies, and would double my rates!

b) An audio interview of you discussing your subject area, with some content that won’t be covered in your class. Here, come up with the top 10 questions in your area, have a friend interview you, and talk for an hour or more. You can buy an audio recorder from a company like Sony, that can plug into your computer via USB, for $50-100, or you can use a service like FreeConferenceCall.com to record your interview and get the MP3 version of your interview. You can have your friend ask you questions like:

• “What is (insert your topic here)?”
• “Why should I pay attention to this topic?”
• “Who does this effect the most?”
• “How should I get started?”
• “What mistakes should I avoid making?”
• “What costs will I incur?”
• “How do I move to the next step?”

Let’s say that after you record your interview, you put the MP3 for sale at your classes, on your website, and on other sites like Clickbank, for a $47 profit. Between your classes and your website, this is what you could make if you just sold ONE copy of this interview:

• Every month: $564/yr
• Every week: $2,444/yr
• Every day: $17,155/yr

c) Related books in your topic area. Do a Google search for “remaindered books” to find companies that will sell recent books for a big discount off retail price, which you can charge more than your cost in your class. For example, if you are teaching a class on How to Play the Guitar, if you can find a book about Guitar Playing that is slightly out of date, but still a great book, that has been discounted from its’ $25 retail price to $5, you can buy it for $5, resell it for $15-20, and your students are still saving off the retail price. If you have your own books to sell, you can pick other books that don’t compete with yours to cover related areas. For example, if you have written books about Texas Hold ‘Em poker, you could sell other people’s books on blackjack or craps, since some of your poker students may want to learn about those games too.

Let’s go back to my eBay class example. Beyond the books I wrote, I would also sell eBay for Dummies for $20 when I paid $5 for it from these sites. Let’s say I had a 6% sell-through rate on this extra book:

100 students/mo * 6% sellthrough * 12 mos * $15 profit/book = $1080/yr from 1 extra product

Imagine if you carried several extra books beyond your own books!

Step 5: Find a Classroom

You will want a place that’s easy to find, has parking for you and your students, and has suitable accommodations to host your class (chairs, tables, etc) Options here include your local hotels, learning centers, and maybe even a community college who could rent you a room in the evenings. See where other instructors are hosting their classes to get ideas of where you can hold your class.

Now Taking Students

You’ve got your class, you’ve got your products, now you need some students (or, as some people put it, “behinds” in those chairs). Your revenue will depend on the length of your class, so here are some revenue projections for what I see as the two most popular options:

The 2-3 hour seminar:

Per-class Costs

$100-250: Room rental for 10-15 people
$50-100: Materials cost (photocopying, binding, office supplies)
TOTAL: $150-350

Revenue

$50 * 10 = $500 ($50 admission cost w/10 students)
$5-20 * 10 = $50-200 (handout or workbook charge per student)
$200 * 3 = $600 (Sell a product or all-day seminar to 30% of your crowd for $200 a pop)
TOTAL REVENUE: $1150-1300 per class (Double your attendance, double your revenue; 20 people could earn you as much as $2500 in 1 night)
TOTAL PROFIT: $800-1150 per class

The all-day seminar:

Per-class Costs

$300-500: Room rental for 10-15 people
$50-100: Materials cost
TOTAL: $350-600

Revenue

$200 * 10 = $2000 ($200 admission cost w/10 students)
$25-50 * 10 = $250-500 ($25 materials charge for workbook, etc.)
$1000 * 1 = $1000 (Sell an advanced product or 1 on 1 coaching to 10% of your audience)
TOTAL REVENUE: $3250-3500
TOTAL PROFIT: $2650-3150 per day
Of course, what’s hard to factor in here (in terms of extra profit) is the acquisition cost of gaining new customers to your mailing list, and that will depend on what you may sell them down the road.

Tip: Build an affiliates page for your students that references all the web URL’s you discuss in class. For example, check out my Learning Annex Student Resource Page. This page gives you all the links you would need to get set up on eBay, PayPal, Yahoo, drop-shippers, price research, and more, and as the instructor, you can earn money referring your students to different websites.

Spread the Word

The main expense not covered in the above section is marketing costs. If you want to increase your class size, you can spend money to grow your base through avenues like:

• Newspaper ads
• Radio ads
• Flyers
• Search engine advertisements on Google or Yahoo

Your marketing budget is up to you, but should be tied into your revenue goals. If you want big classes every month, you will probably need to invest in lots of marketing expenses up front to get a big crowd. On the other hand, you can start with a low marketing budget and spend more money as you build your audience and teach more classes.

There are lots of free ways you can advertise your class, which take some time but will help spread your message regardless:

1. Set up your own website that allows people to read about your class and enroll, either through an e-mail, a form, or calling a phone number. (This is actually a necessary expense. You need some sort of website to act as your hub of information. You can always use Microsoft Office Live Small Business to build a free website for now)
2. Post free notices on community websites like Craigslist about your class, topic, benefits, and costs, and point people to your website to enroll.
3. Contact your newspaper and alternative newspapers to add your class to their Calendar or Events section, if applicable. (Of course, if you can convince a local paper to cover your class in terms of a news or lifestyle article, that’s a lot of free publicity.)
4. Build your own profile page on sites like MySpace and Facebook, and advertise your class (or your class website) through those pages as well.
5. Make short videos describing what you are going to teach and post them on your website, on sites like YouTube, and other adult education sites like OneMinuteU to advertise your class.
6. Set up affiliate deals with other adult education companies, if there is a complementary nature. For example, if you are teaching an eBay class, and there is a local computer education company that doesn’t offer an eBay class, offer them a cut of your admission cost if they refer one of their students. I have an agreement with Computers Etc in San Diego where they advertise my eBay class and earn a referral fee for each student I get from them. You don’t pay unless you get a student, and they can get extra revenue and fill a need they don’t cover. (Yes, this isn’t necessarily a ‘free’ method, but it only costs money if you get students, so it’s free in terms of upfront costs)

Wrap-up

You could teach the occasional class to make $1,000-3,000 a month, or add more topics (or products) to make even more per month and potentially even more than your regular job. I do not take into account any money you could make every day through your website selling products, as well as any potential “affiliate” deals you could make with other teachers who want to reach your new mailing list of customers, and other money making opportunities. You should definitely follow up with your students after each class, see what they liked, disliked, and perhaps get them to suggest other areas you could teach if you want to expand your education empire.