You want to own your own business? We all see oil prices shooting up at the gas pumps so how about starting your own gas station?  Here are some things I've learned from successful technology entrepreneur who has diversified his retirement funds into a gas station here in San Diego. Oil may sound like pure profit, but it really isn't all that pretty for gas station owners.

$.07/gallon - We may be paying $3.80 per gallon for it, but they are only making $.07/gallon. Thats about 2% margins. This is on the high side. I have heard of others making $.02/gallon. With about 450,000 gallons sold per month, this equates to about $31,500/ month in gasoline sales revenues.  That looks like a big number, but its not all profit. Theres still plenty of overhead to cover.

Convenient store - This is the true money maker. Selling those cigarettes, gatorades and dirty magazines rakes in about $120,000 per month.  The gas pumps draw 'em in but the candy bar's make the money. Another classic example of making people go to point C  to get them from A to B (i.e. movie theaters and popcorn/soft drinks)

Car wash - Another profit machine for the gas station.  This is an automated system with pretty low upkeep ~$2,000/month.  Each car costs about $8.00 resulting in a monthy profit of ~$8,000.

The Bottom line: Theres a lot of money being moved around, but in the end the net result is about break even. Sure you're not in the red, but its not the cash cow you thought it was when you invested a few mill into it.

Conclusions: Retail gasoline, like everything else, is super competitive. You need a massive up front capital investment to get started.  You need to run three separate entities - gas pumps, retail, and car wash just to make a little profit.  Location and name brand gasoline will certainly boost your profits - there are definitely many very profitable gas stations out there, they are the minority.

It's not about becoming a millionaire anymore, its about becoming a pentamillionaire these days.. How'd these people get there?

"The vast majority — 80% — either started their own business or worked for a small company that saw explosive growth. And almost all of them made their fortune in a big lump sum after many years of effort."

A quote that reinforces a point I was making in the Kobe beef entry:
"today's very rich say that money itself wasn't much of a motivator."
(thats always easy to say after you've got 5 million in the bank. )

Pinkberry is under fire as expected - when you're on top, everyone wants a piece of the action. Multiple lawsuits have been filed against the Pinkberry franchise questioning whether their product is actually made of yogurt. 

Don't you just love America? You have the freedom to pursue the American dream. Start a business. Be your own boss. But remember, any jealous/dissatisfied customer also has the freedom to pursue a lawsuit.  Maybe Hwang and Co. should have cashed out with Disney? Or maybe not, this is probably more free publicity and advertising for Pinkberry. No such thing as bad pub, right?

This is just something we need to keep in mind when we start our own businesses.  If you don't want to deal with the issues unrelated to your core competence then you should just keep your day job - entrepreneurs have to be able and willing to deal with anything.

Here's a suggested reading list of books about entrepreneurship and investing that I will definitely be checking out this summer.

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• Founders at Work
• The Only Three Questions That Count
  
• Hackers and Painters
• Confessions of a Street Addict
• The Dhando Investor
• The Wisdom of Crowds
• Grande Expectations

Source: Infectious Greed

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I wouldn't know about this, but I hear that blogging can be very profitable.  Some companies are actually hiring people to blog for them. Check them out if you want to start a blog but don't know where to start!

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Option 1: http://www.vault.com/
Blog on Vault and Get Paid!

Dear Vault Member,

Vault is looking for talented, semi-obsessive, bloggers to write and collect news stories and information in the following areas:

• Investment Banking/Finance
• Management Consulting
• Law
• MBA Admissions
• Law School Admissions

Blogger duties are as follows:

• Scour the Internet for interesting and relevant news articles on a daily basis, commenting/captioning as necessary
• Write 2-3 original articles/observations about your subject on a weekly basis.
• Break news as available (merger rumors, applications posted, etc.)

If you have your own blog or web site, that's a big plus. This is a paid position; we expect it to take approximately 10-15 hours a week. You will be communicating with Vault editors on a regular basis.

To apply, please send a CV, a cover letter, a writing sample, and a link to your blog and/or web site (if applicable) to blogs@vault.com. We regret that we cannot respond to all applicants.

Apply to be a Vault Blogger
Go to Vault's Message Boards, the Original Workplace Community

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Option 2: TJ's Weblog: Tech, VC, Entrepreneurship, etc
"Creative Weblogging is hiring quite a number of bloggers right now and you will find a great learning experience working with us.

If you want to give it a try - here are some rules:

(1) We engage experienced bloggers only. If you do not currently have a blog, we recommend you set up a free blog account at Blogger.com or Wordpress.com. After you have been blogging for 60 days, please contact us again at that time.

(2) You must be able to blog on a regular schedule - ideally 10-15 posts a week. If you post less we can also arrange for a different agreement.

(3) We look for your passion for a entrepreneurship and the VC industry. Show us how much you LOVE a particular topic.

(4) We also look to see how enthusiastic you are about blogging and the blogosphere - we want to see that you blog regularly and often. We also want to see that you participate in the blogosphere through commenting and other actions. Blogging is a participation sport!"

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EXECUTIVE LIFE

Wagyu, The Foie Gras Of Steaks

If you think prices for a tenderloin or a T-bone at fine steakhouses are
steep, try ordering wagyu beef. Servings of the highly marbled delicacy,
considered ambrosia for carnivores, might run as much as $20 an ounce. Then
again, because wagyu has a taste and texture more like foie gras than USDA
prime steak, a small portion will do just fine.

The beef comes from Japanese cattle that are treated to regular massages and
a diet of grains and beer, at least in Japan. Wagyu cattle are now raised in
the U.S. and Australia, although Kobe beef, considered the best of wagyu,
comes from a specific region in Japan.



The Japanese typically eat wagyu in thin slices grilled rare or dipped in
simmering broth, but chefs in the U.S. keep inventing ways to serve it. Kobe
Club in New York offers "flights" that allow you to sample Kobe filet, strip
loin, and rib eye. The price is $395, but it's enough for two. At Cut in Los
Angeles, chef Wolfgang Puck's signature dish is Kobe beef short ribs for a
relatively modest $39.

Others have given the pricey delicacy a more homey touch. Thomas Keller has
served wagyu meat loaf at Ad Hoc, a more casual spot near his famed French
Laundry in Yountville, Calif. Ketchup, a sleek L.A. grill, features mini
Kobe beef hot dogs (four for $12), while a Kobe beef rib sloppy joe ($15)
graces the menu at newly opened Presidio Social Club in San Francisco. Why
the growing popularity of wagyu? With caviar and foie gras under siege, says
restaurant consultant Clark Wolf, "we need some luxury protein to help us
feel special."

By Amy Cortese
Source: Businessweek Online

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Is there a point to this article? Is the purpose to give average joe's a glimpse into the finer things in life only accessible to the wealthy exec? Is it to encourage everyone to work harder and advance their careers so they can eat Kobe beef rib sloppy joes for lunch everyday? Or is it simply an ad campaign by Wagyu beef suppliers trying to push their products mainstream? If anything at all, it simply encourages us to act rich before actually being rich.

Personally, articles like this don't really mean much to me.  Gaining access to the finer things in life do not motivate me to be an entrepreneur or to advance my career.

What really motivates you? Does a fancy cut of meat drive you? Think about before you jump in...

A Pinkberry just popped up in my hometown and I reluctantly went there twice this past weekend.  $5.95 for a medium 3 topping green tea yogurt. Sounds like a ridiculous price to pay for frozen yogurt but if you look at the $5.00 Grande Frappucino you bought at your local starbucks this morning, the yogurt's a bargain. Anyways, whats going on with them anyways?

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" Interested in a Pinkberry Frozen Yogurt franchise? Well, you may need to wait a few more months to even obtain a franchisee prospectus from Pinkberry, Inc. Here is the quick rundown of What’s New in the thriving business:

• The word is that Pinkberry, Inc. has been acquired by one of the Walt Disney’s Company as of December 2006.
  Update: The acquisition has not been finalized as the owners of Pinkberry did not accept the offer.
• The two founders, Hye-kyung “Shelly” Hwang and Young Lee are now (or could be) successful multi-millionaires. Congratulations."
  

Source: http://www.kwak.org/blog/pinkberry-yogurt-franchise.html

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Even though the deal isn't official, it looks like Pinkberry might not IPO after all.  Not sure what the terms were, but I heard that it was something in the ball park of $10.6M.   Sounds kinda low at first glance doesn't it?  The founders sure think so.  But judging by the amount offered, it looks like Disney saw it the way I saw it.

It looks like there has been some talk recently on the blogosphere regarding the subjects of age and entrepreneurship. 

To get you up to speed, please take a look at these blog articles:

The Mid Life Entrepreneur Crisis

Mid Life Entrepreneur Crisis (continued)

The Age/Entrepreneurship Myth

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According to the 2006 Global Entrepreneurship Monitor report ( from Paul's site), more than 50% of entrepreneurs are between the ages of 35-55.  The idea that entrepreneurship is something that experienced industry professionals do at their mid life crisis may still hold true (your parents may fit this mold), but as you can see, there is a sizeable portion of entrepreneurs get started even earlier - 20-30% get started between 18-34. 

What does this mean to me? 
Many newly grads feel pressure (from our savings accounts and parents) to find a safe/steady job and take whatever you can get while not really knowing what you want out of it right now and in the long run. The choices seem so limited don't they? Then how about entrepreneurship as a career choice? As the numbers suggest, its never too young to do it. If you aren't sure what you want to do now, why don't you plan for entrepreneurship a couple years down the line?  What kind of start up business would you like to be involved in a few years from now? What type of job coming out of college would help you build the skills, network and knowledge for that kind of business? While not all types of businesses are ideally suited for early 20-somethings (venture backed tech start-ups), there are plenty of other low entry barrier businesses that you can plan for and build (i.e. Pinkberry).

One resource that may come very handy for you aspiring entrepreneurs is your University's Technology Transfer Office.  This is where your school keeps its goldmine of patents and technologies developed by the faculty.  One of the Tech Transfer Office's main roles is to generate income for the University through the liscensing of these technologies to industry.  For instance, a licensing officer of the tech transfer office calls up a business development guy at Pfizer and tell's them that they have some technology that may be of interest to Pfizer.  Pfizer does it due diligence and decides it wants to liscense this technology from the University. Terms of these deals are usually in the form of an up front payment of roughly ~$10,000 by industry and future royalty payments of ~5%. Faculty who researched this technology originally usually get something like ~33% of that 5%. Score.

Now what you need to know.
Many of these technologies are just sitting around waiting for some business minded and ambitious individuals to pick them up and commercialize them.   As you know may have noticed, many faculty (especially ones at traditionally conservative engineering schools) are not in touch with industry and would much rather focus on research rather than explore the commercial opportunities for their novel developments. Often times, although UCSD does not have this problem, universities discourage these types of entrepreneurial activiies by their faculty citing conflict of interest. The result? Promising technologies get left on the shelf and gather dust...  First hand at the Von Liebig Center, I can see that many of the technologies that we have been funding and faculty that we have been consulting need a business oriented guy to push this technology to commercialization. ( I want to be that guy, but I know I am not ready for it. What angel investor of venture capitalist in the right mind would fund a start up with a CEO that has no industry/management experience who is not a core developer of the technology? )

What you should do.
Once you have the background, knowledge, network and experience to take on a venture, visit the Technology Transfer Office website of your favorite university where you'll find a list of technologies.

Find one relevant to your background and interest and recruit a technical partner(s). Preferably one from the lab where the technology was originally researched.

Negotiate a license with the school. Your chances of getting that license will be greatly enhanced if you manage to parter with the original faculty researcher.




Yes I know, this is uber simplified. I haven't done it myself, but I am sure it might come in handy for you (and me) someday.  Keep an eye out for this when you're working on your MBA. Just another source of ideas.

I've volunteered to write a business plan for an adviser that I have been working with the past few months at the Von Liebig Center.  He has recently spun-off a company based on a technology from UCSD research. It is high tech - maybe too high tech. But its interesting nevertheless.

I don't know how to write a business plan, but I guess its time to learn how.  I know its going to take a lot of work to learn their business. I figure it'll be good for me one way or another. I'm young and inexperienced, but I've got to take initiative and offer what little I can.

We'll see where this takes me.