Building a Prosperous Business – Decision Elements
This is the first of a 5 part ezine series that have been developed to help people understand the elements (business and personal) that should be in place to drive the maximum success out of the opportunity they want to pursue – Straightforward, jargon free how tos from setup to taxes. There are no guarantees but what’s clear is that those people that are more prepared, have a plan and then take action are more likely to win by a WIDE margin.
START A BUSINESS NOW? – ARE YOU ON DRUGS?
If you are looking at a home based/internet business or really any sole proprietorship- the very first thing you need to do is spend some time determining “why”. I know you’ve probably heard other people say this but I don’t mean dreamy, spacey or “Do what you love” or anything like that. First, I don’t know what that means – I love mowing the grass to be honest, it’s therapeutic, I don’t have to think and when I’m done I get this feeling of accomplishment but is there a market and can I make $10,000 a month at it? Don’t think so.
So – why do you want to own a business? Certainly being “realistic” says that we’re in an extremely challenging economic climate and this may not be the best time to “rock the boat”. But check a little history – Ford, Carnegie, Roosevelt, Kennedy, Bush and even Google Founder Brin, made their money in times of economic weakness or depression – they saw an opportunity. Conventional wisdom keeps poor people poor, middle class people constantly stressed and squeezed and rich people richer. So follow the principles outlined in these sections one by one and get the attitude that change is possible for you.
This may sound simple but when the winds blow, as they will in any business, if you’ve built a house of cards, your business will be less than the success you wanted. Start with the BIG picture and work your way down – don’t start small and work your way up. Reason – you will let your preconceptions / assumptions about your capabilities shrink your possibilities at EXACTLY the time when you need to be open. Your “why” is the capstone or the umbrella under which everything you do operates. Whatever it is for you is great because it is yours – that’s why you can’t compare it to your neighbors and vice versa.
Quick note – simple things NOT complex things are the hardest. EVERYTHING is part of or connected to something else and you can go into a serious meltdown if you let it get to you. Like one of those Russian dolls within dolls or the internet where you can click from one site to another forever and find nothing or even like one of my more nightmarish dreams. People make things complex in their brains, get overwhelmed and shut down. Complexity means that you haven’t taken the time to break the thing down into manageable pieces, sort them out and decide how to take action. Simplicity on the other hand is tougher because it often deals with basics. So people shy away from simple questions because they require thought or commitment or personal risk. So the simplicity of “why do you want to own a business now?” actually makes you delve into what you value, what your goals, priorities are, etc. BUT by going through this process I can help you get the business side sorted out.
To find out if something is right for you – take some time – listen and learn the basics and be alert for anything that sounds too good to be true (i.e., guaranteed 15% on some hedge fund or Nigerian money). Do not be misled by “internet research” – where you read, usually the garbage, of other people’s opinions. Are they you? Do they have your goals, your life circumstances, your drive and determination? When doing any research always go to fact based sources. Take the time you need, use the principles here BUT make sure you don’t suffer from “the paralysis of analysis” and never do anything!
WHY DO I WANT TO OWN A BUSINESS?
When determining your “Why”? Don’t go through a big philosophical debate – keep it simple. Maybe it’s as simple as “I want to stay home with my kids” or “I need pay off the car loan” but it’s clear – no ambiguity and it has a value that can be measured. It will change and grow over time but it becomes the basis for driving your attitude toward your business. It will drive how you value your business – example, if your kids are the reason you want to do a business then when your business causes you to be late for dinner or miss a baseball game – you will understand and be more comfortable with the value of the tradeoff.
After you find a good “Why” – People normally want to own a business for three reasons:
- You may want to take control of your own future – to be your own boss because you know you’ll never get rich working for someone else and you know that your hard work right now continues to make wealthy individuals wealthier while you may struggle to make ends meet. In these challenging economic times
- you may want to create new income because your current job could be at risk, you may need to bridge the gap between what you make and what you spend or perhaps you are just planning for your future.
- Third, maybe you’d like to start a home based business as a way to lower your taxes by taking advantage of the phenomenal deductions available to small business operators. Could be like most of us – all three. Whichever it is for you – that’s great.
BUSINESS DECISION ELEMENTS
Now that you’ve built a “value proposition” for yourself – a “why” that drives your desire to own a business….”You can stay home with your kids and generate some extra money”. Whatever this is normally has a number that falls out from it – what are you making at work now or how much does day care cost or what do the extra things I want cost? Having a financial goal tied to your why is very important – it enables you to measure your progress and understand how / what opportunity may be a better fit.
When you’re taking a look at opportunities look for 3 things – if anyone tries to tell you anything else – throw up a red flag. Some people say I’m an analytical guy or a technical guy or a detail guy and most of that may be true but most of all I’m a simple guy – I like things to flow and be connected and for me to see how the dots are connected and get a clear picture – not get lost in a maze.
The three things you want to feel comfortable with in order of importance are the market, your supplier and the support systems. Everything cascades from here.
Knowing the market is the MOST important thing in starting / maintaining a business. I’m not talking about a detailed understanding of everything but a clear general knowledge that the market you’re operating in is large, growing and has the momentum to sustain new players. You could have the best product in the world but if nobody wants to buy it – you don’t have a business. I’ve seen people advertising to get into the candle business for free and make money. Does this make sense in general – what’s the size of the market, is it exploding, can you sustain a viable income stream?
In general, look for a business that is supported by demographic trends and offers a consumable product. This way you are operating in a market that is expanding rapidly and as the pie grows you can grow a business with it. In addition, with consumable products customers come back to you and you can develop referrals – lowering your costs. There are lots of major trends – we are all part of them normally. Wellness is one of those demographic shifts. It starts with two explosive trends – First – a growing and expanding population that is seeking to maintain or better their quality of life – second, an aging population that is expected to live and be active 15 to 20 years longer than previous generations. These trends together are creating a tidal wave of people all looking for products and services to maintain their health and active lifestyles – this is a huge multi-generational demographic mega trend.
In this challenging economic time – you want to be working with the trends and not bucking them, so this is probably not the right time to start a real estate or a car business from scratch.