Author Topic: Can I make money from improvements?  (Read 3003 times)

HipGnosis

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Can I make money from improvements?
« on: April 13, 2017, 10:13:19 AM »
Can I make money (or a business) from improving existing products or processes?

Background:
Nothing was good enough for my father.  Everything was either more expensive than it needed to be or was made cheaply.  Processes were for the benefit of the company instead of the customer.
Subsequentially I learned there's no 'right' way to do anything.  If I bought  a 'nice' car, I spent to much.  If I bought an economy car I was missing out on comfort, reliability, etc...

It ingrained in me to see possible improvements.   
Why don't TSA lines have a bench since we have to take off our shoes?  Why don't they have shoehorns on chains to help put the shoes back on?
I've thought of many product improvements that were eventually done buy the mfg or it's competition.
Like putting a USB port on the computer keyboard.

Is there a way to make money from this 'skill'?  I don't have the funds or business acumen to develop and manufacture a physical product.  Yet.

MightyAl

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Re: Can I make money from improvements?
« Reply #1 on: April 13, 2017, 10:46:12 AM »
This is called Continuous Improvement (CI).  The more popular proper name is the Toyota Production System (TPS) or even LEAN manufacturing or Process Improvement. 

There are entire departments in companies dedicated to this.  They will either optimize the product or the process by which the product is manufactured.  There is lots and lots of this in industry.  Just google any of the above terms and you will get the phone book. 

J Boogie

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Re: Can I make money from improvements?
« Reply #2 on: April 13, 2017, 11:42:03 AM »
Unfortunately, you probably can't start a business based on this ability anytime soon.

You'll have to come up with some way of demonstrating your ability to do this for a company before they agree to bring you on as a consultant. 

Seek out any Lean/Six Sigma/Black Belt training in your workplace.  This is probably the starting point to becoming a CI consultant.  If your workplace doesn't have anything like this, go and work for a manufacturing-based company and you'll be able to start on this path.  Where do you work right now?

khizr

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Re: Can I make money from improvements?
« Reply #3 on: April 13, 2017, 01:37:30 PM »
If you were famous or a consultant/contractor with this background maybe.

bunchbikes

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Re: Can I make money from improvements?
« Reply #4 on: April 16, 2017, 07:22:21 AM »
The responses in this thread are thinking too narrowly.


The real answer is, there are mountains of money to be made by identifying ways to improve existing products.

You say you don't have the funds or the business acumen to bring a product to market.

The good thing is, if you're improving an existing product, it's typically WAY cheaper to bring to market/manufacture than creating a new product from scratch.

It is way easier than you might think it is, so your statement about lack of business acumen is bullshit.

The only acumen you need, is the ability to identify what improvements people need, and it sounds like you're well on your way to figuring that out.

When you start off with the end result (the product you want), you just reverse engineer the steps to get you to that goal.  Many successful products/businesses were started by people who had no idea what they were doing, but figured it out as they went along.

swick

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Re: Can I make money from improvements?
« Reply #5 on: April 16, 2017, 11:20:51 AM »
Another way to look at it would be experiences instead of physical products. I do a fair bit of consulting for small businesses (online and physical) that involve going on and mapping out the full user/customer experience. Where the bottlenecks are, what the barriers to sales or creating loyal customers are, how things can be done more efficiently and how to get the biggest impact out of the smallest resources. Usually, it is tiny tweaks that can bring big results.

I read "Why We Buy" by Paco Underhill when I was a teenager and it definitely influenced my career. http://amzn.to/2ok9pm1

SeattleCPA

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Re: Can I make money from improvements?
« Reply #6 on: April 17, 2017, 07:27:11 AM »
Not sure if an "improvement" based approach lets you identify a new product or new service or new business opportunity.

But I'm pretty sure you could take this mindset and apply it to the typical small business.

A while back, I blogged about what I think is the typical small CPA firm profitability:

http://evergreensmallbusiness.com/small-cpa-firm-profitability/

Partly I was suggesting possibility that the industry's principal survey of CPA firm profitability under-sampled single-owner firms--which is a problem because most CPA firms are single owner firms...

But the data I mashed up suggested a handful of pretty weird things. First, that the typical single owner CPA doesn't actually make a profit but probably only makes a salary. Second, that there is *massive* variability in single owner CPA firm profits. Third, that rich resources exist for CPA firm owners who want to move their businesses from average to something way above average.

I go into all this detail because I would be pretty confident this same dynamic exists in other industries. I would guess that in many industries, the typical business does okay but not great. But that a handful of firms have figured out how to do really well. E.g., moving from a median performance to the 80th percentile maybe doubles profits. Moving from the 80th percentile to the 90th percentile maybe doubles profits again.

What this suggests to me is that in many industries you might, theoretically, be able to take an average business, improve it, and see a giant impact in terms of profits.

GilbertB

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Re: Can I make money from improvements?
« Reply #7 on: April 17, 2017, 08:34:42 AM »
I'm not sure this qualifies...

My gramps identified some problems in small 4hp 4 stroke Yamaha outboard engines.
If memory serves me right, it was hot start issues, stuttering with sudden throttle changes after long periods of constant throttle, and ease of cleaning the fuel filter at sea without unhooking...
Not stuff that would affect a casual user much, but a nuisance for the many pros that used these (tax exempt) engines nonstop, 8 hours a day, for a million uses in ports, ship yards, fishing etc.
Being a mechanical engineer, he managed to narrow the modification to a few parts with minimal labour.
He took his engine to the regional distributor to test, and soon was modifying every engine of that type sold in that area.
He did it himself, because he enjoyed it, but could have outsourced the work.

It paid well for about 5 years until the next generation of engines had the issues solved by the manufacturer.

bunchbikes

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Re: Can I make money from improvements?
« Reply #8 on: April 18, 2017, 08:50:33 PM »
My gramps identified some problems in small 4hp 4 stroke Yamaha outboard engines.

A friend of mine made a small improvement to the fuel injection system of a particular kind of diesel engine.  He did the research, built the improvement in his garage over the course of 2-3 years in his 20s.  He sold the tech for 7 figures, and now he's free to play piano, compose music, or whatever he actually wants to do now.
« Last Edit: April 18, 2017, 09:00:39 PM by CargoBiker »

Guesl982374

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Re: Can I make money from improvements?
« Reply #9 on: April 21, 2017, 07:54:39 AM »

 

Wow, a phone plan for fifteen bucks!