Posted on June 4, 2021 @ 09:57:00 AM by Paul Meagher
There is alot of speculative investing going on these days in Meme Stocks, Non-Fungible Tokens, and Crytpocurrencies.
As entrepreneurs investing in our own businesses, we generally need to be more practical in the types of things we invest in to start or expand our business.
Lately I've noticed a pattern in my own investing that involves buying many units of an item because I can potentially make more sales if I do.
For me, those units are Glass Carboys and Bicycles.
Where an investor buys shares in a company, the company itself may buy multiple units of an item that will help generate a greater sales volume. Generally a good use of an investor's capital is to help fund the purchase of units that increase potential sales.
One business that I have been working on over a long period is starting up a small scale winery at a farm property me and my wife purchased 10 years ago. Over the last 5 months of downtime from farming and wine making, I've collected 25 more glass carboys so that I can ferment and store a greater volume of wine than I currently do. I've mostly been buying them through online classified ads from people who have given up amateur wine making. I consider investing in glass carboys to be one of the best investments I can make for my wine making business because it is the most critical to enabling a greater sales volume.
Another business I am trying to start at our farm property is a bicycle rental business. The seed for this idea was planted around 3 years ago when I was at a bike shop in the fall of the year and they were selling bikes that they used for renting over the summer. I picked up 4 quality hybrid bikes and 1 commuter bike from them for a very good price. I then ended up purchasing 4 more of the best schwinn mountain bikes that a big box store was selling. It was the end of the season so they were selling bicycle inventory at a very reduced cost and I took all they had. These 9 bikes were my core bicycle rental fleet. I made feeble attempts at starting that business over the last 2 years but this year I decided to get more serious and built an e-commerce website with my son to rent my bicycle fleet and promote the area as a prime destination for those wanting to explore the area by bicycle.
Over the last 5 months I've accumulated 5 more used quality bikes through online classifieds: 1 mountain, 3 hybrid, and 1 fatbike. I also purchased 1 new fatbike so I would have a pair to rent.
The number of bikes I have determines the volume of sales I can make.
I'm excited to see how the bicycle rental business does now that things are opening up again and I have an online sales platform for renting bikes.
We also added an option to rent a campsite at our farm if they want to explore nearby areas over multiple days.
Carboys and Bicycles are the units that I have decided are the main units I need to invest in as they can potentially generate more wine and bike rental sales. For different startups there will be different units that are considered critical to determining sales volume. Some things that you might think are critical to determining your sales volume may only be making your life easier and not actually contribute that much to increasing sales. At some point, you also need to stop investing in new units until you gauge what the demand actually is.