Tim Ferriss in his book the 4 Hour Work Week talks about streamlining your work from managing interruptions, organising how you deal with email and how people contact you, setting their expectations with autoresponders so that you can use your work time productively. Having ‘trained’ everyone to be succinct and to the point when communicating with you, you free up time to create the vehicle that’s going to fund your mini-retirement. So what’s the vehicle going to be?
From the oust, it needs to have a minimal set up cost and generate income on auto-pilot with minimal maintenance from you. In fact, he advocates designing it with the end in mind, so every function should be created with the aim that it will be outsourced. He calls these ‘muses’.
He talks about listing your passions and hobbies to come up with some ideas that you can test to see if there is a demand for such a product. The product should serve a niche area, preferably an area you’re already familiar with because it’s your passion or hobby, although it’s not necessary.
Tim outlines 3 types of products – a physical product that you could get manufactured in say China at a fraction of the price that you could mark up at 5 times; a product that you purchase a license to sell and thirdly (the best products, Tim says) information products. They can be marketed, sold and delivered online through a website and the use of autoresponders and online merchant accounts like PayPal. Information products can take the form of videos or ebooks and therefore needn’t cost much more than your time (that you’ve now freed up) to create.
He does impress upon testing the product first to see if there is a market for it. It’s all very well having a focus group all say that they would buy your product, but the real test is whether they would actually part with money if you said you had the product in the car now for them.
The ideal price Tim reckons is between $50 to $200. Any less makes it more dependant on sales volumes and it takes the same amount of marketing to generate the same number of sales whether the product is $10 or $50. Any more than $200 and the sale becomes a harder sale to convert because it’s serious money that needs a lot of convincing.
Another tip Tim passes on is that for a physical product, it shouldn’t take more than 3-4 weeks to manufacture.
The key vehicle for selling the product, whether it’s an information or physical product is a website. He recommends using WordPress which I agree with totally as it is relatively easy to learn if you are adept at picking up new technical things as it is a steep learning curve.
Alternatively this is also another task that could be easily outsourced to a Biz Tech Wiz who specialises in WordPress set up and is knowledgeable in the use of autoresponder tools like AWeber. It can save you months of trying to figure it out for yourself as they’ve been through that learning curve.
I think the most difficult part of this exercise from Tim Ferriss’ book is finding a muse that is a good seller, so testing the idea before committing too much time and money on it is crucial. How to test ideas out is covered in my next blog post.