LEARN

Choose

The Right Business

For You

In this training, you'll learn how to inspect what you expect out of any business idea. Plus, you'll learn how to decide on the right business to maximize your skills, and most importantly, how to find the right business FOR YOU.

QUOTABLE

"Genius is 1% inspiration and 99% perspiration." 

 

-Thomas Edison

 

OBJECTIVE

The most critical mistake made by entrepreneurs is not choosing the right business from the very beginning. In this section, you’ll learn the tools needed to evaluate and decide on the right business for you.

CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS

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Vision

"Vision" is what makes entrepreneur’s dare: dare to explore, dare to challenge, dare to insist, dare to keep pushing, dare to have the determination to succeed. Vision is the energy that provides an entrepreneur and its organization with the ability to perform and succeed. Incidentally, devotion to your goal is much more likely if you have a love for your intended business.

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Brains

While appropriate educational credentials are important, entrepreneurial "brains" means more than educational achievements. To become a successful entrepreneur, you should have a working knowledge of the business you plan to create prior to launch. Common sense, combined with relevant experience, is currency to an entrepreneur.

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Capital

Every startup business needs resources by way of capital. Capital is wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company. Frequently, new entrepreneurs make the fatal mistake of miscalculating the capital requirements for a given startup. Miscalculating or failure to properly assess capital requirements is a key failure that has bankrupted and failed more businesses than you could imagine. Money isn't the only form of capital! 

Click here to learn the many forms of capital.

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Mindset

Mindset: While we saved this for last, mindset is the most important trait of successful entrepreneurs, as it’s the area you truly can control the most. While little to nothing is more fulfilling than creating a business (and life) where you get paid for selling something you truly love, it’s impossible to estimate the many challenges that await entrepreneurs. For this reason, we highly recommend you stop here and read How To Hack Your Mind For Success if you haven’t already. In this fantastic (and free) e-book you'll learn the #1 secret for success, mastering your mind. Proceed after you've read the short e-book.

STEP-BY-STEP APPROACH

Do you really want to be a business owner? (like really)

Do you have the passion to run a business? Do you have a higher purpose driving you to create this business? Do you have the grit to handle all tasks as it relates to your business, no matter how trivial they may seem? In the digital age, it’s easy to get sucked into the over-glamorized world of entrepreneurship as seen through the filter of social media. Don’t believe the hype. Successful entrepreneurs are raw, driven, and determined individuals who keep punching until they are literally and physically unable. This is not the world for the faint of heart, so be sure you set proper expectations for hard work and dedication out the gate, or stand a high probability of being disappointed along with the droves of failures who have come at the hand of those ill-prepared.  

Now, decide what business and where.

Once you are satisfied you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Selection strategy is covered later on in this session. Also, see our home-based business session for those considering operating a business from their home.

Decide whether to operate full-time or part-time (aka moonlighting)

There are some advantages and some pitfalls to moonlighting. (That is, a business you start in your off hours while still working at your regular job.) The right answer depends on the characteristics of your business and how well it translates to part time involvement, however, the decision must be made after due diligence. More often than not, the risk profile of starting on a part time basis outweigh the potential gains as a full-time operator:

  • You keep current income, retirement, health, and other benefits from current employer.

  • Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including compartmentalizing your job and business into completely separate worlds.

  • You can avoid conflict of interest with your job by choosing a business that translates well for part time work, such as online business, real estate, specialized food, e-commerce, direct marketing or family-run operations.

There are also some pitfalls to consider in moonlighting your startup.

  • There is a temptation to spend excessive time on your employer’s clock working on your new business. This can be tempting but should be avoided in an era where employers have more insight into the workday than ever. Going down this path without proper etiquette can range from declining performance to flat our burning bridges, so proceed with caution.

  • Will you be a competitor to your current employer? If you’re competing against your employer, do the right thing and inform your employer. If it means that you will be shown the door, which is the case in many industries, then be ready to launch prior to that happening.

  • Will dodging conflict negatively impact your business? You must tread lightly because any kind of conflict with your regular work can jeopardize your job and your business. You must decide on a case by case basis.

SELECTION STRATEGY

Starting the wrong business for you is a killer misstep. Many new entrepreneurs make the mistake of focusing too much energy on “can XYZ business be a success” and totally forget to ask the most important question, “Can XYZ business provide the lifestyle I crave?”

 

Here is a checklist to help evaluate your business:

  • If you have not yet selected a business, take your time to find a successful model that is a good fit for your lifestyle. What’s your passion? Create a business based on your passion and you won’t work a day in your life, in addition to creating exceptional value for your customers.

  • A common problem is not having much money to start a certain business. Surprisingly, there are a number of businesses that require little to no startup capital.

  • Don't tackle or pursue businesses you have no working knowledge of alone. Changing industries requires new tools, great hires, or partners to tackle successfully.

  • Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is."

  • A common mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you.

  • Keep in mind that as a general rule, specialists do better than non-specialists. In business today, niche businesses are the craze because clients prefer specialization over generality.

  • Operate a business that will address needs today and be flexible enough to scale tomorrow.

  • Avoid highly commoditized or price sensitive businesses. Businesses with high levels will struggle to churn profits until scale is achieved, which is daunting for startup prospects. Warren Buffit said it best, "In a commodity type business you're only as smart as your dumbest competitor."

  • Most service businesses have pricing power. Pricing power means that you will not need to have the lowest price in order to secure business because clients are more likely to pay a premium for quality service offerings.

  • Should you bet on a business you don't know when you can bet on a business you do know? Assess your skills and find a fit. Remember, going into a new industry with competitors who want to crush you without proper skills is a death sentence for all but a few entrepreneurs.

  • If you are manufacturing a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging.

  • If your business is based on marketing an invention - verify if patent protection is available:

  • First check to determine if there are any issued patents similar to your idea. You can secure information from the U.S. Patent office at www.uspto.gov.  

  • Be cautious about getting involved with firms that ask for up-front fees to market an invention.

 

No matter what you hope for, you will need a minimum viable product (MVP) to show, to test, and to solicit feedback. This doesn’t (and shouldn’t) be a fully completed product at this point. Don’t make assumptions. Test mvp’s with customers and make iterations (changes) based on viable customer feedback, not assumptions.

AVOID COMMON PITFALLS

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Impatience

Remember, even Apple started small (in a garage). Don't get hasty and start making bad decisions due to impatience. Sound judgement is the only driver of successful entrepreneurs, use it.

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Overconfidence

Don’t let over confidence short lead away you from analyzing your business with care. You must not fear hearing positive or negative aspects. For successful entrepreneurs, it’s not about positive or negative, it’s about right versus wrong.

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Unreal Expectations

As mentioned previously, you must temper your expectations. Businesses are not easy, markets are unpredictable, and bliss is blinding. Set realistic expectations to prove your concept and have bias for facts.

SUGGESTIONS FOR TRANSITIONING FROM EMPLOYEE TO ENTREPRENEUR

More people than ever are victims downsizing also known as "reduction in force," "made redundant," or "your job just went overseas." Scary questions begin to arise: Where do I go from here? How am I going to make my mortgage payment?

 

For a laid-off worker who doesn’t have a realistic path to the right career, there is a possibility not to be overlooked - Why not go into business for yourself? For those still in jobs but fearful of losing them (the signs are usually evident), there is the possibility of starting a part time business now while still working.

REQUIRED ACTIVITIES

It is worth repeating: The most common mistake new entrepreneurs make is not selecting the right business for them. This is the time for soul-searching…

IF YOU HAVE NOT YET DECIDED ON A BUSINESS, DO THIS:

  • On the top of a blank sheet of paper, write an activity you like to perform (make this the heading). Do a separate page for each activity or interest you have.

  • On those same sheets list as many businesses you can think of that are related to that activity.

  • On the same sheets, list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could perform.

  • Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawn shops, auto repairs, and fabric stores.

 

EXAMPLE

Let's assume you end up with three potential business ideas: towing service, used car sales, and auto repair shop. You can now make a comparative evaluation using the following checklist (or better still your own checklist) with a 1-10 scoring system. This kind of analysis can help you gain objectivity in selecting your business.

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HOW TO EVALUATE THE BUSINESS

Use these questions to clarify your thoughts:

  • Is it something I will enjoy doing? Harvey McKay said it best, "Find something you love to do and you'll never have to work a day in your life."

  • Also, if you're doing something you love, you're much more likely to stick with it through thick and thin.

  • My favorite activities are __________________________.

  • I like to serve others by ________________________________.

  • Will it serve an expanding need for which there is no close substitute?

  • Can I be so good at a specialized, targeted need that customers will think there is no true substitute?

  • Can I handle the capital requirements? In Session 11, Accounting and Cash Flow, you will learn a simple cash flow control method to forecast your future cash needs.

  • Can I learn the business by working for someone else first? Our favorite example: if you're planning to open a convenience store, for heaven's sake go to work for a national chain first!

  • One option for going into business is buying a business or a franchise. Valuable insights in evaluating both possibilities are included in our Session 9 Buying a Business or Franchise.

  • An entire session in our course Business Expansion is devoted to buying businesses. In many cases, buying a business is less risky than starting from scratch.

  • Could I operate as a hollow corporation, without a factory and with a minimum number of employees? For example, a small digital marketing firm can likely operate from home until staffing grows. Cost savings is often the prime objective, but you also free up your time and capital.

  • Is this a product or service that I can test first? Your concept of a successful product or service may not be in harmony with the reality of the marketplace. On a small scale, prove it out first. As Wolfgang Puck states: "I learned more from the one restaurant that didn't work than from all the ones that were successes."

  • Should I consider a partner who has complementary skills or who could help finance the business?

 

Use a "For" and "Against" list to evaluate your business.

Make a "for" and "against" list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the "fors" and on the other all the "againsts." Sometimes this will help clarify your thinking. We have provided a Template to Evaluate a Business for you to use.

While many entrepreneurs will access these traits looking at competition, we highly recommend this list be made with the competition in mind but the customer front and center. Assess and write down what is working well for customers in the “fors” and what is not going well for customers in the “against

 

Talk to several people in your intended business.

Don't be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls of your new business ideas — better now than after you open your doors.

Get completely qualified

 

Before you proceed further in your business, get qualified: 

Before you proceed further in your business, get qualified: The best way to become qualified is to go to work for a competitor. While working for a competitor is a good option, what if you have no competition in your area? It’s hard to match the convenience and quality from online training from peers who have paved the path before you. There’s nothing better than skipping hours (or years) worth of learning on the mediums you use most!

  • Attend all classes you can on the skills you need: for example, sales, accounting, etc.

  • Find a learn through relevant books, mentors, blogs, and trainings.

  • Don't be afraid to ask questions or seek help from the most successful people in your intended business.

TOP TEN DO'S AND DONT'S

DO THIS:

  1. Start small. Live frugally and begin saving up money early. Launching your minimal viable product (MVP) is the best approach.

  2. Learn your industry by working for someone else first.

  3. Consider the benefits of starting on a part time basis.

  4. Consider the advantages of operating a family business.

  5. Objectively measure your skills and knowledge against potential competition.

  6. Consider subcontracting to low-cost suppliers if you're manufacturing a product.

  7. Test advertising your product or service before starting or expanding.

  8. Make a "for" and "against" list describing the business, you are considering.

  9. Talk to lots of people for advice. Word of caution: Entrepreneurs are a rare bread, don’t expect friends, family, and others who pursue the tradition 9-5 lifestyle to support (or even understand) the risk aspects of starting a business. Many folks will have formed their opinion before hearing a word about the facts and these opinions should be taken with a grain of salt.

  10. Stack rank your opportunities and rate them head to head.

DON'T DO THIS:

  1. Launch without proving the market and lifestyle fit using your MVP. 

  2. Quit your job before launching your company.

  3. Consider operating a business in a field you do not enjoy.

  4. Risk substantially all the family assets. Limit your liabilities to a level which you (and your family) have agreed you’re willing to lose in total.

  5. Compete with your employer in a side hustle.

  6. Select a business with poor a disproportionate risk/reward profile.

  7. Operate a business in which you must have the lowest price to succeed.

  8. Neglect to learn the negative aspects of an intended business.

  9. Permit entrepreneurial self-confidence to outweigh careful diligence.

  10. Allow the promise of a conceptual high reward to deter reality-testing first.

MAKE YOUR DECISION

 

It’s decision time! If you don’t have the right idea for you, you will know that it’s time to reassess and pivot. If that’s not the case, have you found the right business that will provide the lifestyle you seek? Have you thoroughly vetted the potential of your idea? Have you confirmed that a substantial market need exists? Have you created social proof that there is a need for your product or service in the real world? Have you come to grips with the fact that starting a business will be challenging, but unimaginably fulfilling if done right?

Sometimes in life you have to be bold to create the fulfillment you crave the most. It will feel like you’re standing on the edge. You look up in amazement as the eagle’s soar above. You’ll look down and see a 1000ft fall with certain injury or death.

 

Truth be told, if you never take a leap you will never know what it’s like to soar. But that’s not who you are or you wouldn’t be reading this. If you do take the leap and stay persistent in your goals, you will likely still fall for several hundred feet and maybe even crash into some rocks on the way down. It will be scary, but eventually with persistence, you will learn to soar, and when this happens you will find your highest sense of self and purpose, flying with the eagles.

 

Great entrepreneurs are on a life journey to acquire experience and create value for others. No instance in time can ever replace a lifetime of purpose, as that is where true fulfillment lives.