Monday, July 18, 2011

The secret to making millions

…is in being one of the leaders, not one of the followers. As far back as the 80’s when the harsh reality of downsizing and retrenchments begun to bite in Kenya, local businessmen have shown an amazing willingness to flock from business to business, merely because we heard that someone had made money from it. It was irrelevant that we didn’t know anything about clearing & forwarding or poultry farming, or if I couldn’t tell a bromide from a photocopy. If Mr. Kamau Otieno next door looked happy and well fed in his ‘new’ car, then whatever business he was in, was perfect for me (take a minute to think of all the guys who tried to sell you calendars and printer paper in the past). Just like in a pyramid scheme,
the late entrants to a specific market will find it hard to make any money at all. The upside is that at least in business you can still make some cash if you develop/create/find a way to solve the problem in a better/cheaper way than the incumbents. The same thing applies to real estate. Don’t come late to the party and expect to make millions doing the same thing in the same way that the early entrants have been doing for years. You have to either do it better/cheaper than them or turn it on its head and do something completely different. The benefit of doing it better/cheaper is that you can pass on the increased value/savings to the customers (NB. if you want to use your better/cheaper methods to extort more money out of them, you better have a long term strategy and deep pockets). So before rushing in, think about how your approach will be better/cheaper or don’t even bother. Personally, I think the real money in real estate is in appropriate land use and believe me converting prime agricultural land into a concrete jungle is certainly NOT appropriate, a subject I will deal with next….

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