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Paying for the Shop's Real Estate

If you want to get better prices on things when you travel, look for shops that have cheaper real estate. As a traveler or tourist, you're very likely to spend most of your time on the major streets and roads.

These places have the highest prices.

One example that really struck me was in Saigon, Vietnam. On one of the main roads is a nice little restaurant. Next to it is a different shop, and then there's an alley.

If you walked down the alleyway a little bit, there's another restaurant - with the exact same menu, except the prices are 20-30% cheaper.

At the restaurant on the main road, there'd only be foreigners, mostly tourists. The one set back in the alleyway had more Vietnamese people and expatriates and savvy travelers.

Make the Food, then Build the Restaurant

On DROdio

I have this little analogy that i like to tell people who are interested in starting a business.

Think of your business as a restaurant.  What you're telling me is that you want to take a piece of land at what you consider to be a good location, and build a restaurant.

I say, instead of building the restaurant, cook the food first, and let people eat it.  And if they like the food, then build the restaurant.

What I mean in practical terms is, test the market before you do anything else.  Especially with the internet, it's especially easy now to test the market.  Here are some examples:

A client wants to buy a house to rent it out, but he's not sure if he'll be able to rent it.  I say, put an ad up on CraigsList (or similar) as if you already have the house for rent, and see how many interested parties you get.  Then use that to gauge whether or not to buy the house.  You've spent just minutes of your time testing the market (see my related musings about the 80/20 rule below).

I have this little analogy that i like to tell people who are interested in starting a business. Think of your business as a restaurant.  What you're telling me is that you want to take a piece of land at what you consider to be a good location, and build a restaurant. I say, instead of building the restaurant, cook the food first, and let people eat it.  And if they like the food, then build the restaurant. What I mean in practical terms is, test the market before you do anything else.  Especially with the internet, it's especially easy now to test the market.  Here are some examples: A client wants to buy a house to rent it out, but he's not sure if he'll be able to rent it.  I say, put an ad up on CraigsList (or similar) as if you already have the house for rent, and see how many interested parties you get.  Then use that to gauge whether or not to buy the house.  You've spent just minutes of your time testing the market (see my related musings about the 80/20 rule below). You want to build the next cool gizmo. I say, put a website up showing pictures of the gizmo and have an order form, then try marketing it to the people you think will want it, and try to get some pre-orders on the product. So test, test, test, and don't be afraid to tell everyone who will listen about your idea.  Don't guard your idea because you're afraid that someone will copy it.  You ar so much better off getting feedback from anyone who will listen, because guaranteed, it will be many times better than if you try to figure the market out by yourself.  You might end up with 100% of the product/idea if you do it all yourself, but 100% of zero isn't much.

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