Water Reflections

The water experiment was a success, but I got lots of emails saying that $5 in profit per hour was not worth it….some points to consider:

  • I made that money in 30 min, not 1 hour.
  • I overpaid Barry.
  • I only had 24 bottles. Lesson learned: Next time bring several cases.
  • I can get someone else to do this for me.

And the MAIN POINT: I can turn almost no money into a much larger amount now that I have learned the above lessons. That was the point of this experiment.

This could easily be a $40 an hour activity for a kid looking to score some quick cash.

Some said I was still being paid for my time much like a job. This is true. BUT….I have made an agreement with Barry to set him up with 5 cases of chilled water and a large cooler with ice. He will sell them all day from 11am till 5pm and we will split the profit.

If he simply runs away with my investment I stand to lose approx. $33:

If all goes well, I can possibly make approx. $48.50:

If Barry does all the selling, all I have to do is drive over the cooler, water and ice to his corner. Not a bad deal.

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    Blog posted on: April 5, 2005

    20 comments on “Water Reflections

    1. Anonymous

      Those odds are in your favor. Plus I’m sure Barry couldn’t get too far with your investent.

      Love the blog, keep up the great work

      Reply
    2. Cap

      I’m sure your experiment was more to do with fun and for the share exploration of your idea. even if you made more money like say $50 bux, seems more like you’ll still just do it even if you break even.

      Reply
    3. Anonymous

      Why don’t you just sell the water yourself?

      And why are you only taking 1/2 the profit, but assuming 100% of the risk?

      Reply
    4. Jacob

      Nev,

      I am not sure if you want to go all out on this experiment. What is to stop Barry from selling the water and keeping the profits himself?

      I come from a family of successful small business owners. One of the earliest lessons they taught me was

      1). Always have a family member or a trusted friend manage the cash register.

      2). Never let anyone control your business for the sake of “convienence”.

      Selling cases of water can be a daunting task if you leave it to one person to do it without any supervision or accountability.

      Just my 2-cents.

      Reply
    5. Anonymous

      Cool experiment, kudos to you!

      An improvement might be to hire some high school students to do the selling. Perhaps someone that actually looks cleaner.

      I wouldn’t buy water from someone that doesn’t look like they are very clean.

      Reply
    6. Anonymous

      The partnership between Neville and Barry works as follows:

      Barry can make $24 by working from 11a to 5p.

      Neville can make $24 by working from 10:45a to 11a.

      That’s the payoff for accepting the investment risk.

      Reply
    7. Kate Bean

      I think it’s a great thing you’re doing by continuing with the “water experiment”, both as a financial opportunity and in a humanitarian sense. If Barry is responsible and doesn’t run off with your money and you guys keep doing this, then working 5 days a week for a year will net Barry more than $10,000! ($45/day*20 workdays*12 months=$10,800) Which is pretty good for someone that’s homeless and I’m guessing doesn’t pay taxes. Barry may even be very appreciative and one day become a “trusted friend” like Jacob says to run another business for you. It’d make a great story. :) AND – for a $33 risk, you could change someone’s life.

      Reply
    8. Neville

      Last Anonymous,

      You perfectly explained why I am taking 100% of the risk.

      The amount of work I will have to do is very minimal, not to mention I can set the same deal up with other bums.

      The $33 of risk will come out of my investment account. This is less than it costs me to go bar-hopping for a night. This isn’t a $500,000 investment that I have to trust to a family member. If it were, I’d never so freely give out my trust!

      Reply
    9. Cap

      there are some stuff to watch for though as you expand this idea of yours. but I’m sure you’ve probably thought of them already. if it ever gets big enough, you might even want to consider legitimatizing it! so maybe there wont be anyone saying you’re exploting people like barry. I still have the picture of you selling water while whipping out your digital camera in my head. heh.

      Reply
    10. Anonymous

      This is probably illegal as you need to have a license to sell items on the highway. Plus the safety risk.

      Reply
    11. Anonymous

      oh, come on guys. Don’t use this “profit-risk” method. Look at it from a game-theory view.

      If Barry sells everything, and runs away with the profits, he’ll get ~$150, and never work with Nev again.

      If he continues to work with Nev, he’ll get ~$50 each time they cooperate.

      If he were gutsy enough to work on his own, and face down the inevitable clash with Nev, it’d be worth it. Of course, the first time he was being watched, so you can’t tell his behavior… the next trial will really see his values.

      Also, Nev. This is based on the assumption of further cooperation. If he knows you’re not going to work with him in another few days, he’d be better to run off with everything. So be sure to keep him in the dark, and fire him suddenly!

      Reply
    12. Neville

      Barry has lived by the same corner for several years. If he runs away with my investment, I will most likely find him…and take care of him.

      If he cooperates like I expect, he will get a constant source of income while I put up all the initial investment. It’s win-win. He only creates risk if he bails on the deal, in which case he would have to beware of me.

      As for what I could possibly lose…$33? It’s negligible.

      Reply
    13. ncnblog

      Nev, Killer site. I was wondering, have you checked the “official” legality of what you are doing. I am not talking about the hiring of the guy, but just the selling on the street? I know you talked to the cop, but I was wondering if you talked to anyone else. I think you have hit on a great idea… There is a college near where I live, and with graduation coming up, I might take a couple hundred bucks and see what I could do selling sodas and water…thanks for all the ideas…

      pimping my new blog…No Cedit Needed
      http://www.ncnblog.blogspot.com/

      Reply
    14. Johnie

      I like the plan. The only thing is be careful calling your “employee/partner” a bum… I know you don’t mean any harm by it, but it may be hard to gain mutual trust without respect by both sides.

      Reply
    15. Anonymous

      If your partner has any brains, this thought will come to him:

      Why do I need Nev? At first I needed him to purchase the product, but now that I have my own capital, I don’t need Nev.

      Reply
    16. Zarathustra's Son

      If Barry quits he will have proven worthy of his hire.

      Just remember: you can afford a price war. Barry cannot.

      Reply

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