Prepaid Long Distance

The next money-maker in the long distance telephone business will be focused on the way we buy and pay for long distance service.

PAY PHONES & OTHER STUFF

In the past, technological advancement in telecommunications services has opened doors for entrepreneurs to make money selling services.

Private-Party owned Pay Phones spread like wildfire, and 25c Per-Minute Long Distance Flat Rate Billing was introduced and gobbled up by an excited marketplace.

PAY NOW, CALL LATER

Prepaid Long Distance service is nothing more than a marketing person’s dream of being able to charge for something that need not be delivered right away.

Here’s how it works:

1. You walk into a convenience store and buy a Phone Card for $10, or any denomination it is being sold.
2. When the time comes for you to use the card, simply edial the toll-free 800 number and enter the 14-digit code printed on the card.
3. An automated operator’s voice comes on the line and announces that you have $10 worth of long distance calling available to you.
4. A dial tone comes on and you enter the area code and phone number you want to call.

PLUS & MINUS

Prepaid Long Distance and collecting Phone Cards are now a big craze in Japan. Phone Cards are now being traded like baseball cards, with values in excess of $1,000

Companies giveaway free long distance service as premiums and incentives, and then print their names on the Cards that they giveaway.

But in spite of all thes fads, Prepaid Long Distance has some built-in disadvantages that need to be corrected to guarantee its success.

Here are a few:

• We are a credit-based society. We are not accustomed to paying in advance for services we are not using at the time of purchase.
• The rates marketing companies are charging are relatively higher than basic phone company rates.
• As a business, long distance resellers and marketers will be competing for the same consumer “penny”.

Mixed with something novel or commercially accepted, prepaid phone cards may just make it big in the U.S.

Temporary Help Agency

The high cost of maintaining a full-time employee contributes to the growth of the temp-help business.

Minimum Start-Up: $10,000
Average Start-Up: $100,000
Revenue; $100,000 – $2.5Mil
Profits; $25,000 – $250,000
One Person Business: Yes

Advancement in computer hardware and software enables companies to staff mean and lean, preferring to hire temps during peak seasons rather than lay off workers during slower times.

On any given day, over 1 million people work on temporary assignments. By 1995, trade statistics estimate that 1.25 million jobs will go by way of “temps”, creating an aggregate annual payroll of about $10 billion.

These figures suggest that the temporary help business is here to stay.

Unlike the temp boom of the late 70s, today’s temp-help has gone beyond clerical help, with 37% of placements involving professionals.

JOB MATCHMAKER

A temporary-help service acts as a matchmaker between businesses seeking temporary help and individuals who want a job.

The temporary agency pays the employee on a weekly basis a set rate, and in turn bills the business/client a predetermined rate, usually 10% to 15% more than was paid the employee.

START-UP HURDLE

If there is a single hurdle that makes starting a temporary-help agency “difficult”, it has to do with your ability to cover the payroll up front.

As a temp agency, the demand for cash flow presents a two-sided problem.

While you are expected to pay your workers on a weekly basis, you are also expected to extend your clients 30 to 60 days credit.

So while you’re waiting to get paid, you need to have enough cash to cover your payroll.

For example, if you place 10 workers at 40 hours each for the week, at a rate of $8 an hour, it would require $3,200 cash for the week. That’s $12,800 in 4 weeks!

To avoid this problem, it is advisable to hire your workers as independent contractors.

You can act as their agent, and collect your commission when they are paid.

All-Cruise Travel Club

Most Travel Clubs are organized on the premise of building a sizable membership capable of negotiating discounts with various ravel providers.

Minimum Start-Up: $500
Average Start-UP: 10,000
Revenue: $25,000 – $250K
Profits: $10,000/Month
One Person Business: Yes

The Travel Club makes money earning a commission every time a member purchases airline tickets, books a hotel room, or goes on a cruise.

Today, things have changed quite a bit.

SELLING MEMBERSHIPS

With a swelling membership basis it is difficult for travel clubs to ignore the profits of charging for membership, no matter how insignificant the amount.

With 10,000members, a travel club charging only $20 a year will earn $200,000 in membership dues. This revenue is over any commission the Club earns when a member travels.

SPLIT DISCOUNTS

A Travel Club normally acts as a travel agent for the exclusive use of its members. As an “agency”, it gets standard agent commissions from airlines, hotels and cruise lines.

This can range anywhere between 10% and 18% of the purchase price. What travel clubs usually do is offer its members a rebate equivalent to 50% of its commission (meaning 5% to 9% of their purchase price.

If the member spends $1,000, they will get back anywhere between $50 and $90. This is enough reason for people to join a travel club, especially if the membership dues are just $20 a year.

ALL-CRUISE

As todays market shifts from the “all-in-one” and “do-it-all” service companies to that of “specialized” services, so do travel clubs.

Based on industry statistics, the best area to specialize in is the Cruise business, the fastest-growing segment in Travel.

YOUR BUSINESS

Sell memberships to your All-Cruise Travel Club and offer rebates on all cruises and peripheral services the member books through the club.

Find products or services that you can give as bonus for signing up for a year’s membership.

You may even want to seek distributors who will purchase membership cards in advance, at 15% of the retail price.

This means that if the membership retails for $20, a distributor buys it from you for $3. If you sell 10,000 memberships this way, you’ve just earned $30,000. Then, add to this revenue from commissions when members take a cruise.