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Small Businesses Sam's Top Ten Business Questions Samuel Liebowitz 1. Who is your target market for your product/service? 2. Who else is doing the same thing? Who is your competition? 3. How are you going to differentiate your product/service from theirs? 4. How much capital do you need to start the business? 5. How long will you have to operate before your cash flow matches your expenses? 6. What will your overhead costs be? 7. How much demand is there for your product/service? 8. How much will you have to spend on advertising? 9. How will you attract new clients? 10. What is your "edge"? What do you have to offer that others do not? These are questions that need to be answered for any proposed business. They begin to show the difficulty of starting a business. Since a community is hard to start and a business is hard to start, starting both at once with success of both required for success of either lowers the chance of overall success significantly. Therefore we have separated these two, electing to try starting a community first, and businesses afterwards. Several specific businesses have been suggested; however, these suggestions are not even half-baked, of course. Let's just call these suggestions 1% baked. A few have gotten more discussion than others, still just enough to call them a few percent baked. An Internet Service Provider (ISP) We are particularly interested in businesses which do not depend strongly on location. An ISP is a good example of such a business. Having started such a business, Scott wrote: Scott Halbert There are several things you want to think about: 1. What is your potential competition doing? What prices are they charging? How many big nationals are in your calling area? 2. How big is your market? With enough advertising and low prices and a big enough meat-axe you can cut a piece out of a large market, but it can be expensive. If there is little competition and a big market, you can charge more money, but people appreciate low prices and good service. 3. How much money do you have? Do you have investors? How much of your hide to they want to take in order to give you their money? Can you handle the cash hemorrhage that happens with a new business (monthly expenses frequently far exceed your income for many months)? 4. What do you know about doing the work? Do you have unix experience? Can you build the machines yourself? It is much cheaper if you can. But intimacy with your operating system is imperative. If you don't have it, you can't fix things when the customers are breathing down your neck. 5. Unix or NT? NT is costly; Unix is tempermental. 6. What does your day-job situation look like? Your new ISP for sure won't support you for at least six months to two years. We've hired a full-time employee months hence but still can't take much money out for ourselves (me and my partner). How much free time will you have? Balancing two jobs and possibly a family are tricky. If you have a family, will they be supportive? 7. How are you going to do tech-support along with your day job? We got by with an answering machine for six months, but people resent it. You especially lose out on new signups with an answering machine. They just tend to call the next number on their list. 8. Is there a targeted advertising forum for ISPs and computers in your area? We have a free magazine (to the customer) that is distributed in our area (called Computer Scene) that is not too expensive to advertise in. We get most of our business from that and from word of mouth. We did a few weeks of radio advertising but it was very expensive. Untargeted advertising can be tricky. Billboards, radio, and general newspaper ads get accounts, but not as high a percentage as targeted magazines. However, doing big advertising is probably good in the long run as it earns name recognition. 9. Trade as much as possible. Our CPA gets a free ethernet link. We trade accounts for pagers. We are trying to trade T1 lines for free advertising (our cost is only $300 a month, which is cheap for most advertising). 10. Other parts are just business. Do you have good cheerleading and brainstorming with friends and partners? You need enthusiasm when things are flagging and you need inspiration in great supply to keep things running and keep the bills paid. 11. Who can you use as your provider? Do you have options here? What does it cost? Can you afford the circuit-setup fees? How big a line are you going to start with? (Thuntek started with a 128k T1 and recently we just cranked it up to a full T1.) 12. Remember that phone lines for your modem banks should be business-measured service (residential rates are awesome, but seldom available) with hunt. You will not be calling out, everyone will call you so you will not incur any measured service fees. This can be worth $15 to $20 per month. 13. Don't run this out of your house. That can be an option but it can limit your personal life and eventually your business growth. What we did was find a nice office building with people we liked running it that would let us rent a hole in the basement next to the phone closet. When we started, we had a 6' x 10' room (the rest of the room was filled with storage). Now we have a 25' x 10' room and will probably start expanding into other rooms in the basement. We may be moving to a new building the landlord is constructing across the street. 14. Learn some telephone tech to go with the computer expertise. If you don't have either, you need some guru friends who can help when you need it. Universal Node System (UNS) Construction Eric Hunting I would like to propose the alternative of using Peter Pearce's Min-A-Max Universal Node System for constructing this colony and to provide the colony with a core industry. First off, UNS is a proven non-toxic building system that passes code (or at least has no serious problems getting inspector approval). The Biosphere II complex is a plain example of this. The Biosphere also demonstrates its capability for constructing enclosures for closed-cycle habitat experiments and for use as greenhouse enclosures. UNS is not only non-toxic, the majority of its building components can be fashioned from recyclable materials. UNS has a low construction-labor overhead and fast construction rates because it is all bolt-together assembly. All the prospective inhabitants of the colony can participate in construction and maintenance without the need for special skills. If you can use a wrench and a screwdriver, you have all the skills you need and a single person can erect quite impressive structures in a surprisingly short time. UNS also offers a labor and cost savings in site preparation. You can use a slab foundation but it is not required. UNS can just as readily use a concrete-post foundation with the structural flexibility of the system allowing it to follow the contours of existing terrain. This greatly reduces the site-excavation costs and allows the colony to be built on property which would be considered unsuitable for conventional construction. Rocky terrain, rolling hills, steep slopes, and cliff edges can all be exploited with this system without radical excavation. Even open gullies and canyons can be exploited by assembling the base structure as a truss bridge with the dwelling built under it. Being based entirely on modular components, UNS structures are easily disassembled and modified. The tinker-toy nature of the construction allows those without architectural and engineering skills to easily design small structures following simple rules. Only where structural sizes become very large is the engineer an absolute necessity. UNS also has a big advantage in that it-plain and simple-looks cool. Any structures built with it look like a NASA project or a set from Star Trek. If you want structures that suggest a space colony, then you would be hard pressed to find anything more appropriate than this. And as futuristic as they look, UNS structures retain the elegance of contemporary architecture. Biosphere II may be considered by some a scientific failure but it has certainly proven itself an architectural success. It remains one of the leading tourist attractions in Arizona and is frequently likened to such works as the Crystal Palace of England's Great Exposition. UNS does have the disadvantage that, in basic per-square-foot cost, it is equivalent to conventional stick-built housing. This is due to the fact that Peter Pearce's original Pearce Structures manufacturing firm went out of business due to the crash in the U.S. building industry in the late 1980s. He now sub-contracts the fabrication of all components on a project-by-project basis. These subcontractors are typically aircraft-component makers capable of the kind of precision metalwork the UNS joint components demandand I think it is a testimony to the efficiency of this system that he can subcontract from such places and still come out with a cost equivalent to conventional housing. This suggests to me a possible way that SEE could bring the use of UNS to the same cost levels as the tent structure idea while creating a core industry to found the community on. It seems to me that FMF membership has a much stronger skill base in engineering areas than it has in general construction and architecture. Well, being based on high-tech alloys and aircraft-grade precision components, UNS allows us to use those high-tech skills to build houses. Ultimately, SEE will be doing this kind of small-scale precision fabrication in support of other FMF research and development so why not found the colony on such a machine shop (a single, "household"-operated shop) and use it to manufacture the rest of the colony? Though this idea does demand having shop facilities before you can build residences, this might not present a delay in starting the colony if the shop facilities being used for the NELHA project or which some members have available at existing places of work could also be used to make the components for the first couple of residences and SEE's initial shop. I recently spoke to Peter Pearce again and he suggests that shop facilities for small-scale UNS component construction-and by small-scale I am referring to residential uses-could be achieved for around $100,000. The work would be in three areas: joint casting, struts (basically welding of joints to tubular steel struts and finishing), and panels (panels include both indoor partitions and external walls, windows, fixtures, and systems such as heating elements and photovoltaics). Small-scale facilities could easily fit within a single garage space. The fabrication of UNS components could become a core industry for the colony serving the markets of pre-fab building and industrial enclosures as well as components for space structures. This is a potentially lucrative area which I think Peter Pearce himself overlooked. He seems to have been more interested in very large architectural works and the down-fall of Pearce Structures may have been its focus on project-by-project building development rather than the production and marketing of the components and construction system themselves. Pearce is willing to license manufacture for this system and is currently working on a standardized licensing plan. He says that he will offer non-exclusive licensing to small application-specific ventures and exclusive licensing to ventures looking to pursue multiple applications and larger, long-term production volumes. With such an agreement, SEE would be free to exploit the countless other potential applications for this component system: industrial enclosures, modular factory buildings, store displays, toys, survival shelters, disaster recovery shelters, do-it-yourself home kits, orbital platforms, etc. The UNS system is a subset of the Min-A-Max system based on connectors following cubic geometry. Described simply, imagine that you have a cube and are drawing straight lines from one corner to all other corners in the cube. That corner represents all the possible connection angles used in the UNS connector. Another way to think of this geometry is to consider a cube that has all its corners and edges truncated. What you get is a 26-sided shape with 6 square faces, 12 rectangular faces, and 8 triangular faces. This shape is called the rhombicuboctohedron and its faces represents all the possible connection in a single UNS joint. (Pearce developed a construction toy similar to the popular ZomeTool set with joints based on this shape. This was used to build some of the models shown in his book.) This joint is said to have two-, three-, and four-fold axis of symmetry, which affords the system great geometric diversity. UNS uses three strut lengths and a family of five panel shapes. It is considered a "minimum inventory, maximum diversity" building system because an infinite variety of structures is possible using this same handful of components. Because all these components are roughly the same no matter what the final structure, they can be mass produced and can even simplify fabrication when made to order by hand, since only the same few shapes need be made repeatedly. In practice, the struts are all made with tubular steel or aluminum with the cast connectors welded to their ends but there may be many variants of the panels to serve different functions. Some may be made for flooring, others for indoor partitions, others for exterior walls, others as windows or skylights. Some panels may be made with specific fixtures like doors and cabinets, photovoltaics, heating and cooling systems, and so on, built-in. The system allows an unlimited variety of panel materials in order to suit different tastes, cost factors, or applications. Sheet metal and glass are typical for the exterior while conventional plywood or drywall could be used for the interior-though I personally have a preference for less toxic materials such as unpainted, untreated wood; glass; foam glass; cork and natural batting insulation; ceramics; and solid or foamed recycled polyethylene. The house Pearce is currently building for himself in California uses steel struts and an exterior skin composed mostly of glass panels with air gaps for insulation with an active solar thermal system. Structures built with UNS create rigid, triangulated space frames offering great strength as every strut and joint combines to support the structure. This gives them high potential earthquake resistance and the ability to support structures of large scale. Because the system is based on bolt-together parts, structures can be expanded and modified as needed or dismantled and moved readily. UNS will support most types of foundations. It can even be used on floating platforms, as I suggested in past discussions on Aquarius Rising. The most economical type of foundation is the post foundation because it requires the least excavation and is much easier to construct. The posts are identical to those used in conventional building. The base floor of a post-supported structure is formed as a triangulated space frame truss attached to the posts at its joint nodes. Concrete-slab foundations may offer a little better weathering performance since there is no exposed base-floor truss, the structure being supported by perimeter anchor points set in the slab. The critical information that would be needed to determine accurate costs for this construction is a by-component fabrication cost breakdown. With that in hand, it would be a simple matter to estimate whole-project costs by developing some structure designs and counting the components used in them. But with this cost currently varying according to the location and the availability of these contract shops, such information is hard to nail down. We would have to assess what shop facilities are at hand now among members and then work with Pearce to get a more concrete-component cost based on this and his own experience at the now-defunct Pearce Structures. Other Suggestions: Bank
Book publishing
This list is essentially a brainstorm list. No criteria of soundness or desirability as a business have been applied. We would be glad to have the list expanded. It is meant to be a tool in our planning, not a list of things we necessarily expect to do-merely ideas that we might check further.
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