Dow Theorist Richard Russell Describes "The Perfect Business"

Entrepreneurs who are looking to start a franchise start out by searching for the "Perfect Business".

One unlikely source that those considering a franchise should not overlook is Richard Russell's Dow Theory Letters. "Why" you ask? What does a "Dow Theorist" know about the "Perfect Business".

Richard Russell began publishing the Dow Theory Letters in 1958, and he has been writing the Letters ever since (in fact, he has never once even skipped a Letter). The Letters, published every three weeks, cover the US stock market, foreign markets, and every thing economic. And, Mr. Russell is highly sought after for his economic commentary.

However, Richard Russell has written one piece that is his most requested article. Funny thing is... it has absolutely nothing to do with the stock market!

Nope, this piece is where he defines "The Perfect Business" . Go figure.

Here are Mr. Russell's criteria for the "IDEAL BUSINESS"

1. The ideal business sells the world, rather than a single neighborhood or even a single city or state. In other words, it has an unlimited global market (and today this is more important than ever, since world markets have now opened up to an extent unparalleled in my lifetime). By the way, how many times have you seen a retail store that has been doing well for years -- then another bigger and better retail store moves nearby, and it's kaput for the first store.


2. The ideal business offers a product which enjoys an "inelastic" demand. Inelastic refers to a product that people need or desire -- almost regardless of price.


3. The ideal business sells a product which cannot be easily substituted or copied. This means that the product is an original or at least it's something that can be copyrighted or patented.


4. The ideal business has minimal labor requirements (the fewer personnel, the better). Today's example of this is the much-talked about "virtual corporation." The virtual corporation may consist of an office with three executives, where literally all manufacturing and services are farmed out to other companies.


5. The ideal business enjoys low overhead. It does not need an expensive location; it does not need large amounts of electricity, advertising, legal advice, high-priced employees, large inventory, etc.


6. The ideal business does not require big cash outlays or major investments in equipment. In other words, it does not tie up your capital (incidentally, one of the major reasons for new-business failure is under-capitalization).


7. The ideal business enjoys cash billings. In other words, it does not tie up your capital with lengthy or complex credit terms.


8. The ideal business is relatively free of all kinds of government and industry regulations and strictures (and if you're now in your own business, you most definitely know what I mean with this one).


9. The ideal business is portable or easily moveable. This means that you can take your business (and yourself) anywhere you want -- Nevada, Florida, Texas, Washington, S. Dakota (none have state income taxes) or hey, maybe even Monte Carlo or Switzerland or the south of France.


10. Here's a crucial one that's often overlooked; the ideal business satisfies your intellectual (and often emotional) needs. There's nothing like being fascinated with what you're doing. When that happens, you're not working, you're having fun.


11. The ideal business leaves you with free time. In other words, it doesn't require your labor and attention 12, 16 or 18 hours a day (my lawyer wife, who leaves the house at 6:30 AM and comes home at 6:30 PM and often later, has been well aware of this one).


12. Super-important: the ideal business is one in which your income is not limited by your personal output (lawyers and doctors have this problem). No, in the ideal business you can sell 10,000 customers as easily as you sell one (publishing is an example).

Now, the really interesting thing is that in Mr. Russell's article, he states that "the ideal business doesn't exist, and probably never will".

On that point, I think I have to disagree with Mr. Russell :-) There is a business that meets every single one of Mr. Russells' requirements of the "Perfect Business"

1. Clients in the US, Canada, Great Britain, New Zealand, Australia, South Africa, Europe, Japan and India. OK, I'll admit that's not the WHOLE world, but it definitely would meet most folk's idea of a Global Business


2. Products are marketing training and financial education. Pretty much demand there.


3. Products were created by Mr. Kip Herriage, a Wall Street Prodigy who became a VP at one of the the World's 5 Investment firms at age 28 . This company offers a uniq combination of Estate Planning, Debt Reduction, Tax Strategies, and Investment Knowledge. There is not another, single, product like this in the business. So that about covers Mr. Russells' #3.


4. This business requires a grand total of ONE employee. Oh yeah, some folks do choose to have a virtual assistant, and outsource various jobs.


5. The "location" is usually your home. So, this means you actually get to take a percentage of your household electricity as a tax deduction! No extra expense there. The virtual assistant costs a whopping $4/hr, and there is absolutey no inventory involved. All orders are direct shipped from the corporate office.


6. Equipment consists of one or two computers and a cell phone. OK, the laptop can be a bit pricey, if you chose to opt for a beautiful 17" macbook pro.


7. All terms of this business are via credit card or wire transfer. Payment for product purchases are usually the same day as the sale. Can't get much quicker than that.


8. Of course, you do have to pay taxes. But, other than taxes, there are no government forms to file, or regulations to follow.


9. Sales can be made from home, while in Budapest at a conference, and while on vacations in Oregon and Sedona, or anywhere that has internet connectivity. All from a laptop. All quite portable.


10. The only problem with this type of business is that sometimes it's too engaging. Marketing can become an "addiction", so sometimes it's actually difficult to turn off and enjoy the freedom provided by this type of business.


11. Other than your mind constantly being flooded with marketing ideas, this business can be done in 3-4 hours a day.


12. And, finally, even though this business is Direct Sales, it also offers leverage on several different fronts. For one thing, it is Internet based, so your websites, and ads driving traffic to your websites, can be producing revenue simultaneously. Plus, this business provides have the ability to build a team - and make 40% of your team sales. Quite nice.

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Mari Ann Lisenbe

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