Business Opportunities Are Everywhere
Sometimes you hear stories of people who quickly create a profitable business seemingly out of nothing and make a lot of money. Are these one in a million stories, or scams? Is a unique skill that no one else has? No – a lot of them are just people who opened their eyes to the possibilities. I may have come across something like this recently in a perfect example of the type of unexpected opportunities that have launched many good businesses. With a little persistence you can find these just about anywhere.
I’m moving my business into an office but we’re in a very tight real-estate market so it’s been hard to find something available. It’s even harder because the space we need is too small for many property managers to bother leasing. I considered the possibility of getting a larger office and then setting up a co-working space, renting out desks or rooms to freelancers and small businesses, since those are becoming popular in many cities.
I decided not to do that for several reasons. Signing a long-term lease or buying a building is a major expense I can’t take on now. I don’t have a lot of time to market and promote a co-working space and try to build a community with events to attract people. The margins seemed small since everything was expensive already and it would be hard to pass on an even higher price to customers.
So I decided I would just look for an office suitable for my business. Finally after trying some slightly unconventional tactics I found something that shouldn’t exist: a large unused space in a great downtown location where I can rent a small portion at a very low cost (no more than half the market rates) without needing a long-term lease. That’s one example of a deal that you just can’t get… unless you look a bit.
It gets better though. Another place I looked at was a co-working space someone else was setting up, at a location I had considered a few months earlier and rejected. I thought the prices they were talking about were well above the market rate, but I recently heard that it quickly filled up.
All of this adds up to a very interesting opportunity. I can rent office space at less than half the market rate, and it’s clear that there is demand from others who are willing to pay above market rate for individual rooms or smaller spaces. I don’t need to tie up $500,000 or $1M to buy a building because no one is using the space now, so I can work out a deal to only pay for the parts that are actually generating revenue. My friend is renting out a few offices in her building and I’ve learned what she does to keep them occupied so I can probably find customers without spending a lot of time.
I still need to test my assumptions but this is looking like a very interesting business opportunity. It may evaporate in a few years if demand dies down, but if I can make a profit with very little risk that’s worth a try. This kind of opportunity isn’t easy to find but if you know where to look sometimes it does come up. You just need to be aware of the problems that you and other people have. My difficulty in finding an office space shows the demand in the market, and a building owner who doesn’t have time to manage it creates a unique supply.
A deal like this exists on the margins of what is possible and may not last for long. But once you start down that path it becomes easier to leverage what you have into different suppliers, customers, and/or products to create a business that can go much further. An example of that is documented in The Fish That Ate The Whale, which tells the story of an immigrant who started off by selling a product that was about to be discarded after noticing it on a dock one day and grew from there to control the majority of the market (not to mention overthrowing a few pesky governments, which led to the term “banana republic”).
I’m not interested in commercial real estate management at the moment so I have no grandiose plans. I’ll just take the easy profit while it lasts. All the same I might learn more about profitable ways to put my future capital to work. If you look at this there are all kinds of reasons to believe that it doesn’t exist or it can’t work. Many well-known businesses today are a testament to the fact that such popular views are wrong.