Business By Hormozi #292: How to Pick What to Sell: The Key to Maximizing Profit with Minimal Investment
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The Dilemma of Starting a Business
When Rachel decided to start her own business, she was excited but overwhelmed. There were so many options available—handmade crafts, digital products, consulting, services, and so on. With so many possibilities, she wasn’t sure where to begin. Each idea seemed like it could work, but the question lingered: which one would lead to the most success with the least amount of risk?
Rachel had a limited budget and resources, so she knew she couldn’t afford to waste time and money on something that wouldn’t pay off. She reached out to a seasoned entrepreneur, Ben, for guidance.
“Ben, I know I need to start somewhere, but how do I pick the right thing to sell? I don’t want to make the wrong decision and end up losing money,” Rachel said.
Ben looked at her with a knowing smile. “Rachel, the key to choosing what to sell when you’re just starting out is simple: Do the thing that someone will pay you the most money for at the lowest cost to you.”
Why Profitability is Key
Rachel was a bit puzzled. “That sounds too easy. Is that really all there is to it?”
Ben explained, “It’s really about the balance between revenue and cost. As a new business owner, you don’t have the luxury of pouring money into your venture, so you need to choose a product or service that maximizes your income with minimal upfront investment. Look for things that are valuable to your target market but cost you little to create or deliver.”
Ben went on to explain that the more expensive a product is to make or sell, the more risk it carries. Starting with something low-cost allowed Rachel to test the waters with minimal financial commitment and adjust her strategy if needed.
The Search for the Right Product
Rachel took Ben’s advice to heart and started narrowing down her options. She made a list of things she could sell: handmade jewelry, digital eBooks, online coaching, consulting services, and art prints. Then she started to break each idea down to assess which would cost her the least and bring in the most revenue.
She looked at each option:
Handmade jewelry would require an upfront investment in materials.
Digital eBooks required time but minimal upfront costs.
Online coaching and consulting needed her to establish credibility and invest in marketing efforts.
Art prints required a bit of upfront investment in software but very little ongoing cost.
As Rachel reviewed her options, she realized that the best fit for her was digital eBooks. With her expertise in a niche subject, she could create a guide that would cost her very little to produce but could be sold for a decent price. It seemed like the ideal combination of high revenue and low cost.
Taking the Leap to investment
Rachel launched her eBook with minimal upfront costs—she only had to invest her time writing the content and designing a simple cover. Within weeks, she was able to generate sales, and as her reputation grew, so did the demand for her work.
The key was clear: by choosing something she could produce for very little and sell for a higher price, Rachel quickly found a profitable venture without risking too much in the beginning. The formula worked—she was able to scale the business gradually, reinvesting profits into other areas as she went.
The Moral of the Story
Rachel’s journey to choosing what to sell taught her an invaluable lesson: when starting a business, you should focus on selling what gives you the best return on investment for the least cost. Doing this allows you to minimize risk while maximizing profit in the early stages.
Moral: "Do the thing that someone will pay you the most money for at the lowest cost to you."
