Low Income Area

[Cardinal]

Hi, very new to this forum. My question is if anyone has any ideas for a good business to start in a relatively poorer area. This really interest me. A business designed to do well in low income areas

[JustinSkinner]

Low income means no spending money for luxuries, so focus on their needs. What do people need?

Let's brainstorm!


Food
Water
Sex
Sleep
Sense of security (home safety, job employment)


Build from there! Add to the list, break each one down with ideas to solve their needs, pick one you think you could pull off and get going :)

[Freelancier]

There's a huge gulf between making a lot of money and doing good works. Basically, if you're looking to do good works, you'll have trouble wanting to make a lot of money off people who can't afford it. The other path is to make a lot of money and use that money in a separate project to do good works in poorer communities.

So what's your real goal here?

[Paul]

Sometimes poorer areas and neihborhoods and ethnicities value certain commodities differently than more affluent areas. Sneakers, certain clothing articles, certain types of accessories and jewelry, hair styles can become an important 'status" symbol for the younger crowd.

On the other hand parents need to clothe kids so might look at closeout, seconds on shoes and clothing for little kids. Also, maybe some form of entertainment hang out place, video games, pool hall, something that doesn't cost too mmuch to kill a couple hours.

You can make money in poorer areas but obviously you have to do it a few bucks at a time....volume.

[billbenson]

Or, you go online. It doesn't matter where you live and you can make a California buck from a poverty stricken town. We need more info on what you are trying to do.

[webdesignphx]

We Buy Gold, Pawn Shops, and Liquor Stores. But I feel this is a strange question... haha

[Harold Mansfield]

2 things low income neighborhoods never have enough of:

1. Supermarkets: Most brand name stores won't do business in low income areas which leaves over priced small markets (who rarely have a decent selection of fresh foods, fruits and vegetables) with limited selection to get all of the business.
2. Laundromats: Most low income housing and rentals don't have washer driers, and building facilities generally suck. People will go a few extra blocks for a nice laundromat with plenty of machines. Especially over sized machines for large items or big loads.

You'll notice that Banks don't do business in the hood either, which is why there are so many Pay Day loan and check cashing places that charge 3% or higher just to do a simple financial transaction.

The bottom line is that the people need the services and are paying more for the only thing available, than most of us pay at our neighborhood stores and banks.

[David Hunter]

I'm with Harold about the Laundromats. They seem to be real money makers.

[billbenson]

2 things low income neighborhoods never have enough of:

1. Supermarkets: Most brand name stores won't do business in low income areas which leaves over priced small markets (who rarely have a decent selection of fresh foods, fruits and vegetables) with limited selection to get all of the business.
2. Laundromats: Most low income housing and rentals don't have washer driers, and building facilities generally suck. People will go a few extra blocks for a nice laundromat with plenty of machines. Especially over sized machines for large items or big loads.

You'll notice that Banks don't do business in the hood either, which is why there are so many Pay Day loan and check cashing places that charge 3% or higher just to do a simple financial transaction.

The bottom line is that the people need the services and are paying more for the only thing available, than most of us pay at our neighborhood stores and banks.

This makes a lot of sense. On the other hand, we have a lot of Latinos in the bad part of town. I'm married to one, so this isn't a prejudicial statement. We have two specialty supermarkets there that sell specialty Latino food. They sell fresh tortilla's cow's heads, and everything in between. I go in there reasonably frequently for the tortilla's and other things that regular grocery stores don't carry. So ya, there is a market there. But expect a higher level of crime as well.

[cdweaver333]

I would spend time in the area. Offer people $5 to fill out a survey or to ask them 5 questions. You will have a line out the door....

[huggytree]

i avoid poor customers.....i dont think you will ever become rich serving them....the best you can hope for is just to survive and make a normal workers wage....why be in business just to make a normal wage?

I prefer customers who have the extra $ to spend on a higher end product

i would rethink your plan

laundromat is a good idea......something that the customer handles themselves.....expect vandalism though and include a couple hundred a month in your budget for it...or hiring a security guard

[billbenson]

i avoid poor customers.....i dont think you will ever become rich serving them....the best you can hope for is just to survive and make a normal workers wage....why be in business just to make a normal wage?

I prefer customers who have the extra $ to spend on a higher end product

i would rethink your plan

laundromat is a good idea......something that the customer handles themselves.....expect vandalism though and include a couple hundred a month in your budget for it...or hiring a security guard

I agree Huggy. I also cater to people with money - like the oil industry, Navy, etc., but....

It would be naive to think you can't make money catering to the poor.

[Harold Mansfield]

i avoid poor customers.....i dont think you will ever become rich serving them....the best you can hope for is just to survive and make a normal workers wage....why be in business just to make a normal wage?

I prefer customers who have the extra $ to spend on a higher end product

i would rethink your plan

laundromat is a good idea......something that the customer handles themselves.....expect vandalism though and include a couple hundred a month in your budget for it...or hiring a security guard

Not necessarily true. Look at businesses like Pay Day Loans, and Pre-Paid Debit Cards. They service a demographic that everyone else wrote off. Sure, they pretty much rape you with fees, but they are highly successful. How much more money could B of A make charging 5% to cash a paycheck?

I probably wouldn't be a budget plumber in those areas, but don't think there's not money there. Those people need services just like everyone else. Yes, the good people are combined with the dirt bags and criminals, but poor or low income is not a determiner of being a dirt bag. Just look at my tribulations with that lawyer. Being a dirt bag doesn't have an income level, or race or geographic location.

[huggytree]

Not necessarily true. Look at businesses like Pay Day Loans, and Pre-Paid Debit Cards. They service a demographic that everyone else wrote off. Sure, they pretty much rape you with fees, but they are highly successful. How much more money could B of A make charging 5% to cash a paycheck?

I probably wouldn't be a budget plumber in those areas, but don't think there's not money there. Those people need services just like everyone else. Yes, the good people are combined with the dirt bags and criminals, but poor or low income is not a determiner of being a dirt bag. Just look at my tribulations with that lawyer. Being a dirt bag doesn't have an income level, or race or geographic location.

there will be a much higher % of dirt bags in poor area's...probably 1000% more.....so if its a physical business you will have to put extra into security and theft.....dirt bags are everywhere...i find 1 or 2 a year in my business.....2 of my worst were among the richest customers ive had.....over all i find the rich to be great customers.......ive worked in poor area's....someone robs your van and when the police come the neighbors who have been sitting on their porches all day long suddenly get up and go in their houses instead of helping the honest man........ive seen this both times vans have been robbed

im sure there are businesses that can be successful....things like pay day loans which prey upon the poor is one example.....sure if you screw desperate people you can make money. picking a business like this would bother me ethically.........but if you want to be rich working in these area's you may have to get into somethings that some would consider unethical.....

[billbenson]

but if you want to be rich working in these area's you may have to get into somethings that some would consider unethical.

While you can do something you consider unethical, you don't have to. I have no evidence to back this up, but I suspect poorer neighborhoods have certain ethnic concentrations. As I mentioned or implied above, you cater to the local population. Walmart does an incredible job of this. If you go to a Walmart with a certain demographic you will have different products than other Wallmarts in other demographics.

You will have additional expenses because of security etc. So prices will be higher. That's not really taking advantage of someone, but keeping your margins at a decent level.

My wife worked in one of these neighborhoods for a Western Union kind of place. The company specialized in sending money for illegal immigrants. The company treated employees like garbage, but the customers were being charged less than Moneygram, "Western Union etc. This industry doesn't necessarily screw over the customers in the poorer areas. It still comes down to a supply and demand sort of thing for the demographic. If one company is raping their customers, someone else may see an opportunity to open another business that is profitable but with fair prices.

[irisyang]

Make a market survey would be the first thing you should bdfore deciding which products you will sell