Is this a Stupid Idea?

[LMC]

Hey Warriors,

My biggest failure in business is the fact that sometimes I let my mind get ahead of itself and I start to get unfocused on something that I would think would be a good idea, but soon to realize that it wasn't.

This usually happens because I don't question, survey, or research my market I just assume that my market will want my business.

So, I'm making this post to seek some advice on an idea of mine because it effects this market, the online business market, and I was hoping you could let me know if the idea is stupid.


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We (5 person team) have a pretty good system in conceptualizing, developing, and deploying niche Web 2.0 websites that add more value to your market, and create great interactivity for marketing purposes.

We want to do to things with this knowledge...

Teach or Invest

In view, we can organize the information to train 100 individuals the same system, and can charge $XXX amount of dollars, or we could simply say, get our system but we keep 40% profits of your websites utilizing our resources.

So my question is,

Would training people for equity (40%) of their websites be stupid?

I'm a long term looker and if I train 100 people per month, or allow them to view information, assuming the 80/20 rule, only 20 individuals will really take action.

Out of those 20, average income would be (Complete estimate) $2,500/M
My Income would be $1000, and I would earn this every month.

I would earn $12,000 in a year from that 100 person group. This is not including increasing in their websites or them selling the website for capital gain, which I would earn 40% on as well.

I'm just crunching numbers...


Anyways, what you think, stupid? waste of time? to many variables?

[Keith Boisvert]

n view, we can organize the information to train 100 individuals the same system, and can charge amount of dollars, or we could simply say, get our system but we keep 40% profits of your websites utilizing our resources.

So my question is,

Would training people for equity (40%) of their websites be stupid?

It's not stupid at all, but it depends on how things are set up. If the same 100 people bought your system at $xxx(assuming, lets say $100), thats $10K one time, regardless of what they do with the site.

Now, you can possibly create additional revenue from selling those same people add on's, more content or whatever your system is, and increase revenue that was as well. Even if you sold 2 more add-on's at $30 each, and the same 80/20 rule applied, then 20 people would spend $60 for another $1200 total bringing your grand total to $11,200....one time. Not residual, but more of a guarantee than relying on hoping 20 people do something with your product to make you that 40%.

I dunno, just rambling and showing another side. Not 100% sure exactly what you are selling, so I guess testing or doing a survey/focus group might be the answer.


keith

[DogScout]

Actually, I don't know why more coaches don't use that model. Especially as you have a 5 man team, you can use to fill in the gaps of a client's lack of ability or motivation. Insurring both them and you an income. 80/20 can be manipulated. If a client can only do 50% of what is needed, your team does the rest. Once the 80% see results, even ones generated because you stepped in, more will cross over to the 20%, increasing the numbers.

As a manager, I felt it was my job to get the best out of whoever worked for me and except for rare exceptions, could almost always eventually find the 'motivation button' needed to get an employee's best work. Same can be done with your model. (IMO). As long as you are willing to deliver more value than you are getting back, no reason for you not to be unstoppable and teach others to be the same. (And get paid very well for a long time for your efforts)

[Mike Shain]

Originally Posted by LMC

Out of those 20, average income would be (Complete estimate) $2,500/M
My Income would be $1000, and I would earn this every month.

You said you have a 5 person team - even if you pay them a flat rate for any/every project they do for you, their salary for this project would have to be figured as well.

I would think that a bright group of folks like you and your 5 team members could do better than working on $12,000k per year projects. Not trying to be negative - just thinking out loud.

Good luck with this!