Questions to Ask Yourself Before Starting a Side Business is a guest post by Amanda @ Health Insurance Comparison, showing you how to compare health insurance policies and save money!

Many of us have dreams of entrepreneurship and given the current economic climate it may not be a bad idea to look into a side business as an extra means of income. However, businesses aren’t built over night and there are certain aspects you need to take into consideration before embarking on a journey of entrepreneurship. This isn’t to say that some people just can’t run a side business, it just means that people find themselves in situations – financial and otherwise – that will require them to adjust how they start their side business.

What will I be offering?
This is a very important question to ask yourself and the more detailed your answer the better. Before anyone will hire you or ask for your services you need to provide a clear idea of what you will be offering. This will also help you determine the cost of running your operation.

Who is your target market?
When I was in college as an English Literature major the first thing we had to do when writing argumentative papers was figuring out who our audience was. This way we would know how to tailor our paper in a way that would directly impact our readers. Just so you know, when it comes to running a business this is no different.

Knowing your target market will help you figure out a myriad of important information. Who is my market? What do they want? What do they need? Where do they hang out? Where can I find them? What do they use? All of these are important questions to ask when determining your target market, and again the more detailed you are the better.

What is the cost?
Many digital entrepreneurship endeavors cost next to nothing. Take freelance writing for example, if you’ve got a computer and an internet connection you can make extra money writing. However, there are other factors that go into determining the cost.

Do I need a domain? Will I pay for advertising? Do I need a license?

In many cases you need to spend money to make money. While they amount of money you will be investing into your side business may change, figure out how much you will need to get started. Or, at least find out how you can fit a side business into your current budget.

How much time can I dedicate to my side business?
I’m sure that many of you, like myself, have a full time job. This and other responsibilities, like raising children, can limit how much time you can dedicate to your side business.

Make a list of your responsibilities and see when you would be able to work on building up your business. Some people like to work in the mornings before they go their jobs, on weekends, or at night. It all mostly depends on personal preference and any responsibilities you may have.

Starting a side business is an effective and viable way to make extra income in this shaky economy. While it does take a lot of work, the pay off is definitely worth it in the long run.

Regular readers of my blog, Daily Money Shot, know that music is a huge part of my life. While I’ve never had the desire to be a professional musician (I have neither the talent nor the dedication), I’ve always admired those who attempt to make a living as a musician. I’m sure it’s difficult and the pay isn’t that great for those who don’t make it big. And, based on what happened to people like MC Hammer, it is possible to lose all that money if you do make it big.

So that got me thinking about the musicians who have a lot of money but have been able to do so not just for their musical ability but from their ability to brand themselves effectively. The ones who have been able to branch out and make money not only from their music but from other creative and/or business ventures.  The first one I thought of, of course, is Jimmy Buffett.

Jimmy Buffett is most known for songs like “Fins”, “Margaritaville” and “Cheeseburger in Paradise”. He’s known for his crazy fans, Parrotheads, and his laid-back, barefoot, Key West loving attitude. His concerts are legendary (with good reason, too. They are so. Much. Fun) and are broadcast simultaneously on one of his business ventures, Margaritaville Radio on Sirius XM. He has also opened his Margaritaville and Cheeseburger in Paradise restaurant chains, has LandShark beer (it’s not that great. Trust me), and has written numerous fiction, nonfiction and children’s books. Through all of this, he has managed to take his laidback approach to life and brand it into a multimillion dollar business.  He gets to pursue all of his passions and live the life that he wants.

Another musician that has been able to expand his brand outside of his music is Rob Zombie.  Rob Zombie is like the Jimmy Buffett of horror. If you’re not familiar with his music, it can best be described as…dark.  It’s definitely heavy metal in the truest sense of the word, and it definitely has a specific audience. I’m sure that Mr. Zombie is fine with this. But he takes his love of horror to another level.  Not only are his songs heavily influenced by that genre, but he is also a writer and director of horror movies. I’m not a fan of horror movies, but I’ve heard that some of his movies (House of 1000 Corpses, remake of Halloween, and The Devil’s Rejects) are quite good.  He has received as much acclaim for his movies as he has for his music. Like Jimmy Buffett, he has made a living pursing his passions.

So what does this mean for me?

I’m not really sure what it means. I do know that these two men are inspiration that it is possible to pursue your passions and make a living doing it. I know that it means that all is not lost for me to live the life I want. I know that it means that it is possible to take a talent and be successful with that talent as a foundation. I know that it means if I’m going to be a brand, I need a really good business manager

It also means that I need to have confidence in myself that I can be successful pursuing my passion.  It means that I have to have faith in my talent (once I figure out what it is).  It means that I need to surround myself with people who support me and are willing to pick me up if I fall. And it also means that I need to be willing to take risks. I’m not sure that I’m ready for that. Self-employment terrifies me.

I admire Jimmy Buffett and Rob Zombie and all of the other men and women like them who have been able to brand themselves in a way that not only entertains but has a significant impact on their wallets.  I hope I can join them one day.  But for now, I’m happy writing about personal finance.

And if that doesn’t work, I’m really good at Name That Tune. There’s a future in that, right?

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I’ve been on my computer quite a bit more than usual lately.

No, I haven’t just been surfing the internet. No, I haven’t been playing a lot of video games. No, I haven’t been spending time at morally questionable sites either… I’ve been making money. At least $200 a month guaranteed, with what I consider to be fairly minimal effort.

How, you ask? By using a little technique I like to call…

The CraigBay Technique. 

The CraigBay Technique (my own term…patent pending,) isn’t really anything revolutionary (at least I don’t think so anyway, seems kinda common-sense to me), but it’s not something I’ve seen described on any other blogs, except in a general, abstract way. 

That general, abstract way can be described in four words; buy low, sell high (or by using the actual word- arbitrage. Google it).

More specifically, I buy things off of Craigslist, and I turn around and sell them on Ebay. I estimate that I make about $200 dollars a month putting in about 6 hours of work per month tops, which comes out to $33.30 an hour, and only 1.5 hours of work per week. If this were put in terms of a regular 40-hour work week, a person using the CraigBay Technique could theoretically make $5,328 a month.

Ah, but what about that pesky tax stuff, you ask? Even after taking out about 25% for taxes, the grand total at the end of a year would still be about $47,952.

First Step:

Here's how I do it. The first step is to pick something you know a lot about. For example, I know a lot about videogames, specifically, which ones are good, which ones suck, and which ones, when paired with others, the right accessories, or the right consoles, will go for a higher price than what I bought them for. So the first step, pick something you know a lot about.

Second Step:

Find that thing you know a lot about for sale on Craigslist, and then see what it's selling for on Ebay. Find the exact thing, or as absolutely as close to the exact thing as you can, and "watch" it (an option on Ebay that allows you to keep track of particular items). The benefit of watching the item is that it allows you to see exactly what the item sold for… you're not really concerned with what the price of the item is at any time until it's been sold. Now watch as many items as possible that are identical to the item for sale on Craigslist to get an idea of what the average sale price is. This will reduce your risk.

Third Step:

The benefit of Craigslist is that you can haggle with the seller. First make sure that the asking price on Craigslist is at or slightly below the average sale price of the item on Ebay. Then shoot the seller an E-mail asking if they would let the item go for a lower price. How low you want to go is up to you. You have to consider things such as the length of time the item has been on Craigslist, the cost of shipping the item once it sells on Ebay (hint: pick items that can fit in the one-low-flat-fee-to-anywhere-post-office boxes), the seller's willingness to drop the price (you can usually tell from how the add is worded), and how far away the seller lives from you. Oh, I should probably mention that you need to search your own, local Craigslist. Don't worry, this is the part where you start to learn and get a feel for how low a person will or won't go, and if you have a good prospect on your hands. Always ask for current pictures of the item and make sure the seller seems on the up-and-up. Usually good grammar and a friendly, helpful tone in their E-mails are good signs.

Fourth Step:

If the person agrees to sell for the price you need to make it worth your while, then set up a time to meet and complete the transaction. I always pick well-lit and very busy public places to meet, such as the nicest gas station around or a local shopping mall parking lot, right up front by the entrances. I've yet to have any kind of negative experience when meeting people, they usually end up simply being someone like yourself just trying to make a few extra bucks by getting rid of things they don't need anymore.

Fifth Step:

Throw the item on Ebay, and ship it when it sells, asap. Now, there have been many, many books written on how to effectively sell items on Ebay, so I won't get in-depth here, but I will advise you to start your item out at the low, low price of $1, and do not set a reserve or a "buy it now" price. If you've done your homework and you have a good idea of what the average selling price is of the item your selling, then setting your item for sale at $1 with none of the other options will only encourage the bidding process and will help to drive the price up.

That's it!

That's really about it. I know five steps sounds like a bit more work than I made it out to be, but when you consider that most of these steps require you to simply sit in front of a computer shooting off a few e-mails, it's really not that bad.

You'll find ways to save time and become more effective at this process pretty quickly, as well as being able to pick out the adds that are probably willing to drop the price on their item. If nothing else it's a fairly simple way to make a little extra spending money every month.

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My recent trip to Best Buy to purchase a laptop got me thinking on a few things. In order to explain them, I’ll have to tell you about my ordeal.

So I showed up at my local Best Buy at around 4 pm, and wandered straight over to the laptop section. Along the way, I was greeted by about 2 or 3 associates who were plenty friendly and eager to help me make a selection. I told them I was just browsing, to which about half of them responded with something like, “Let us know if you need anything.”

The other half thought they knew better, and proceeded to tell me that they just received the new 3-billion gigabyte ultra razor-thin 3-trillion core smart thingy-majig with a picture of some piece of fruit on it for a logo.

They told me this with the expectation that all of the sudden my eyes would glaze over, I would start salivating like a dog, and would beg to be led by the hand to the aforementioned product, and then immediately taken to the checkout counter for purchase… on store credit, of course.

Eventually I had to take the bait, as I had found the laptop I wanted and had to ask for an associate to take it out of the case. Turns out they didn’t have the one I wanted. When I asked if the other Best Buy store about 10 minutes away had one, I received the answer of “No” about 15 minutes later… apparently a quick phone call to the other store includes setting up the phone service as well.

Strike 1…

They then offered to check the warehouse, which they promptly told me was out of stock. Purchasing the display model was of course out of the question. So I began to look around again and found another comparable one. I told them I wanted this one instead.

The guy with the key came back around, and, even though they clearly had the correct laptop for sale stacked right underneath the display, told me there was an “issue.”

Strike 2…

“Well, all of these laptops cost $100 dollars more that what that price tag says because they’ve been pre-configured by our Geek Squad.”

Now, I get that some people genuinely need this service, and for them that’s okay, but considering I’m a guy that makes a living working on computers, they couldn’t have given that service away to me.

He headed to the back to see if they had any that weren’t pre-configured. Just guess what their answer was.

So again, I asked if the other store had any that weren’t pre-configured. As I waited for the answer I decided that if the other store didn’t I was done. I would go without a laptop until I was ready to brave the commercial behemoth that is Best Buy once again, however long that took.

They got lucky, as the other store had JUST ONE in stock. I was told I could pay there and then go directly to the other location to pick it up. I agreed, and I and my pimple-faced 17-year-old Best Buy associate meandered over to the Geek Squad counter… because you can’t simply buy a computer through their regular checkout.

After shooting down about 13 things they offered to sell me in support of my new laptop (Geek Squad 1-year service, anti-virus, 1-year extended warranty, 3- year extended warranty, wireless travel mouse, travel bag, and a subscription to something even I had never heard of before), it came time to actually pay for the dag-gum thing, when I was given a tip buy the gal at the counter that was actually rather useful.

She knew I had a Best Buy credit card (I know, credit cards are bad, but it was paid off and I had cut it up months ago. I actually had forgot that I even still had an account), and she also knew that I just wanted to pay cash. She told me that if I used my credit card, and chose the “double reward-zone points” option, instead of the 18 months no-interest option, then I would get a gift card in the mail based on how much I had spent. I asked if I could just then turn right back around and pay off my credit card balance, thereby avoiding any interest payments, to which she replied yes.  

It was a done deal. All I had to do was head across the store to customer service to pay off my balance, because heaven forbid I be able to pay it off at that particular register, and then head to the other store, show them my receipt, and be on my way home with my new laptop.

Strike 3…

The other 17-year-old at the customer service counter then told me that they only accept check or cash to make credit card payments in-store.

Who carries their checkbook on them anymore? And who walks around with $912.04 in their pocket?

I think I just stood there for a moment with a pair of suddenly dilated eyeballs and a dumbfounded look on my face.

I pulled myself together, calmly told the girl thank you, and quietly walked out. I had to make another trip back home now to grab my checkbook, and then up to the OTHER Best Buy to pick up my laptop and pay off my credit card.

 Fortunately there were no issues picking up my laptop, and at this point if there had been, I’m pretty sure I would have just broken down in a fit of psychotic laughter. 

Throughout all of this and during the days after, I kept asking myself why they had made it so difficult for me to give them money. That’s exactly what it all came down to; it was like pulling teeth, me trying to give them my money. 3 separate times I could have walked away disgruntled.

1.       The first laptop I wanted, they didn’t have, but they couldn’t sell me their display model, simply because it was their display model. Why have display models if you have no product to sell?

2.       I wouldn’t buy the next laptop because it was $100 more for some trumped –up service I didn’t want, so because they wanted to make a sale of $1012.04 instead of 912.04, they almost made a sale of $0.00.

3.       To top it off, instead of allowing me to pay my credit card off with my debit card, they thought they would rather run the risk of me not making any payments on that credit card whatsoever (for all they knew, I could have planned on defaulting on that card)

To be fair, I know enough about retail business to understand why they do some of these things. For example, the $100 for their Geek Squad service is probably 50% pure profit for them, as opposed to a much smaller profit margin on the sale of the laptop alone, due to the company that actually made the laptop getting money from that sale.

Still though, I often wonder how much more giant retail stores could possibly make if they operated more like a small, intimate local store, one that really does put customers first and makes their purchasing experiences easy and straight-forward.

 One thing is for sure… there’s no way a smaller retail store could pull all the stuff that Best Buy pulled and  stay in business long.