blow: cocaine in it’s powdered state

Drug dealing is a very profitable business but as you probably know, it comes with a huge risk: going to jail and/or dying. Some risk, huh? To most people, it just isn’t worth it, and that’s why the ones who do decide to do it usually end up either wildly rich or totally screwed. A friend of mine was in the business for three years and had figured out how to consistently pull in about $3000 a week working about 1 hour a week. “1 hour a week???” Yup, 1 hour a week, and I’m going to show you how he did it. Let’s keep in mind that I’m not advocating this line of work or encouraging you to do anything illegal, I’m just presenting it so you can see into a sophisticated business model that will hopefully give you some ideas for how to manage your own business.

Most people imagine small dealers as people who stand on the street corner with plastic bags and sell them to junkies walking by. In reality it doesn’t work like this and anyone who did something stupid like that would be arrested within a few hours. When my friend started his business, he partnered with another friend who was as hard working as he was, and they each worked twelve hour shifts, every single day. No one knew who they were or how good their product was so they had to make their mark. They did this by giving out free samples along with “business cards” with their phone number (a separate phone they had set up under someone else’s name). J’s (another word for junkies/customers/buyers) realized that they had good product and reasonable prices, so they started calling their line to buy from them. In this type of business, along with many others such as blogging, it doesn’t matter how established your brand name is - so long as your product is good, people will buy it. Their days consisted of answering calls and driving to meet people, and he said it was the most boring thing he’d ever done, but the money was enough to stay motivated.

Eventually his business partner got arrested which left him in control. He was now making 100% of the profits but also had to work all day every day, sleeping for a few minutes here and there whenever he could. He said it was totally ridiculous and he had to find someone to work for him. It started with him hiring one of his friends to split up the days with, just like it was when he started, but this time he was in charge and he paid his worker a commission on each sale, rather than splitting up the profits 50/50. This way he was earning a lot more money. After awhile he found another worker so they could further split up the days into eight hour shifts, which was a lot more reasonable and everyone was happy. He told me a lot of interesting stories but since they don’t really relate to the theme of this site I’ll leave them out. Eventually he ended up with four workers, each working six hour shifts while he sat at home and watched TV. All he had to do was buy the product from his supplier, break it down, give it to his workers, and sit back while they made money for him. When they ran out of product, he’d repeat the process. That sounds pretty appealing, doesn’t it?

In addition to not having to work, he was also able to stay involved in a high profit business while minimizing his risk. If he’s working 1 hour vs. 12 hours, there’s a lot less chance of getting caught. In fact, since he was now only dealing with his supplier and his workers and not doing any of the actual dealing himself, he was about as safe as he’d ever get. Having all this free time also meant he could start another line for a different product, go through the cycle with that and ultimately make twice as much money doing about the same amount of work.

What happened to him? Hundreds of thousands of dollars and three lines later, he was finally caught and arrested. He got too greedy and there was just no way he could stay clean forever. However, let’s imagine you implemented this model in a legal business. Just because he did it with drugs doesn’t mean you couldn’t do it with a blog, or a storefront, or anything else for that matter. The key principles you need to remember are:

• Spend money to make money: He lost money initially, giving out free samples and cutting deals in order to hook future customers. If he hadn’t done this, there’s no way he would have been successful.
• Work hard: If someone is willing to work 12 hours a day, every single day, you know they’re willing to do whatever needs to be done. He’s one of the hardest working people I know and he kept pushing for more. Lazy people are never successful - remember that!
• Take a risk: If you want to make big bucks, you have to take a big risk. Every business I’ve been in has had a pretty high risk associated with it, be it losing money, losing time that could have been spent elsewhere, or getting into legal trouble. You just have to assess whether the risk in relation to potential profit is worth it.
• Expand: If he had kept running the business as a one man operation, he would probably have quit from exhaustion. There’s a very high chance he would have been arrested early on, because he would have been doing too much. Even if he were able to do it without getting caught, he never would have made as much as he was making in the end. Most successful businesses are not one man operations - for example, TMZ and Engadget are two of the most popular blogs in the world, and they both have many writers working for them. If they were one man operations, there’s no way they’d be at this level.

Let me repeat that I am not encouraging you to start any kind of illegal business. I just wanted to share some insight into a successful business model and hopefully inspire you to think about how to expand your own business. Any thoughts?

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5. Having People Do Your Work For You