New York Magazine has a fascinating set of business case studies investigating how New York businesses turn a profit
The wild risks, unexpected niches, and day-in-day-out grind behind making a dollar in New York for everyone… from a drug dealer to Goldman Sachs.
It makes me glad I work online and from home, many of these businesses have
- Staff overheads
- Property overheads
- Fixed pricing (especially the taxi driver who has zero control of pricing)
- Fixed product offering (taxi driver has to work unprofitable hours and routes with no choice, the diner can’t reduce their menu because customers demand old items, etc)
But on the other hand many show how you can create profit from seemingly unprofitable niches
- Negotiate prices from vendors, don’t just take the list price as set in stone
- Work closely with vendors to get the best quality and a fast turnaround
- Bring customers in with a great headline deal but upsell to your more profitable services
- Nurture your loyal customers as they are your bread and butter
- Trim the overhead fat (eg. do you need fancy prestige offices?)
- Find products you can sell over and over (eg. the print shop makes most money from local restaurant repeat flyer orders rather than walk-in custom, the yoga school with multi-class packages)
- Break up big high cost purchases into smaller units with a markup, as in the print shop running a photocopier lease so small companies do not need to, and the drug dealer who buys in bulk then profits by dividing up and selling on. The same model works online, for example the capital cost of web hosting is spread over dozens of shared hosting clients.
Read the full series, many of the lessons translate into other markets. Can you think how these tips can work for your business?