I know that you are pretty excited to start your own online venture but we have to go slow in order to go fast.
First we need to analyze our Business and come with a business plan that is realistic.
We can’t just jump in without having any idea of what we are doing, right?
Therefore, in today’s lesson we will discuss about how to create the right business that is suited for you.
I know, I can hear it from you… You’re probably thinking how is someone so young gonna help me with choosing a business? What qualifications does he have?
Well, on this area I actually have two business certifications issued from University of Santa Clara, Chicago. Both of the courses had 15 complex sessions and I passed the first one with 9.56 and the second one with a 9.67 out of 10 mark.
Both courses were great and had plenty of information that I am going to share with you right now for free.
The main topics of this lesson are:
You will also receive a Homework at the end of this lesson. It is very important to complete it and under no circumstances you are not allowed to skip it and to move forward to the next lesson.
Deciding on a business
By far, the most common mistake that an Entrepreneur might make is that he will not choose the right business from the beginning.
Characteristics of a Successful Entrepreneur
Guts: A successful Entrepreneur is considered to have guts when he has an overwhelming desire to have his own business. By having guts it will increase his chances of commitment and by creating content on what he enjoys he will build his business faster.
Brain: I am not referring strictly to your school education. You should have previous knowledge about the topic of your business. You can make it about one of your hobbies like swimming, movies, food etc. or maybe a domain in which you might have prior work experience. Prudence, follow through and attention to detail are very important.
Capital: You will need to have enough money to survive until your business will produce some revenue. You will need this money mainly to cover your living costs in the transition period. You can still keep your job and to work at your website in part time. If you are low on cash, then I suggest you to take a look at my section of how to earn extra money from home.
Vision: Many people will argue here but I firmly believe that the vision is key element in order to succeed. Without a clear vision, you will only achieve the same level as your most silly competitors. You need to surpass them. More on this topic will be discussed in the Business expansion guide.
Decide if you really want to be in the business:
From now on you are going to face a lot of challenges that are waiting to bring you down. You will experience doubt, frustration and hopelessness at a level that you haven’t experienced before. You will need an iron will to keep moving forward so please proceed only if you are determined to change your life.
This is exactly where most people give up and choose the easier way and go back to their job where they will become a sheep once again.
You will also suffer from high stress levels since you won’t have a “boss” to guide you and tell you your step to step daily activity. Don’t worry, when this kicks in, make sure to contact me. I’ll be here for you, I promise.
Make sure that you are determined to continue your path, because this is the point of no turning back.
Decide whether you want to operate full-time or moonlight:
There are some interesting advantages and some pitfalls in operating as a moonlight business. (A moonlight business is a business that you start in your off hours while still working at your current job.) Often the advantages of starting as a moonlighter outweigh the risks:
- You avoid burning your bridges of earnings including retirement, health and fringe benefits and vacations.
- 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.
But there are also some pitfalls to consider in starting a moonlight business:
- There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances.
- Any kind of conflict with your regular work can jeopardize your job and your moonlight business.
- Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs.
My advice for you, from my own experience, is to avoid telling your loved ones about your online business. It is never a good idea to tell them about your plan until you can prove them that it works. They will start to discourage you by telling you that the only thing you are doing is to lose time. If you did this mistake try to be more stubborn than the wall. Don’t listen to them and work until your work pays off.
You can tell them after you earned your first income in order to destroy their arguments and to avoid starting unnecessary discussions.
Just believe in yourself and remember: If you need someone to talk to about your business, I am here. Also when you are in moments of doubt, make sure to check my page about Motivation.
Starting a wrong business it is the most frequent mistake of the Entrepreneurs. Therefore, here is a checklist of things you need to consider before you are choosing your business topic:
- If you have not yet selected a business, take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success.
- Don’t try to build an overly complicated business from start if you have no prior experience. You can start with a small business idea and see where that leads you. If you decide to host your websites at Wealthy Affiliate, you will be able to build two websites for free. Therefore, you can try and create one business, see what it’s about and then you can build the second website in less than 30 seconds based on a more complex topic.
- 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.”
- Businesses to avoid are “commodity” businesses where you must compete entirely on price and in which you must have the lowest prices to survive. As Mr. Buffett has said, “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. Your customers will be willing to pay a fair price for a better product or service.
- 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 or patent, keep these ideas in mind:
a. 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.
b. Be cautious about getting involved with firms that ask for up-front fees to market an invention.
c. No matter what you hope for, you will need a product to test, to show and to solicit feedback.
Things to Watch Out For
- Impatience. It won’t happen overnight. All those websites that claim that their special formula will help you earn over 5,000$ from the first month are a scam. Whenever you see something similar, run as hard as you can from it. It never works. However, if you decide and try it out and it works, contact me as soon as possible. Just kidding, it never works.
- Do not let overconfidence short-circuit you from analyzing your business carefully. You must not fear hearing the negative aspects; it is much better to be aware of them and face them early on. Set a day in every week in which you evaluate your business development and see what you are doing wrong. Ask someone you trust for feedback!
- The lure of high rewards. They will come if you have selected the right business and if you understand every aspect of the business before you open its doors.
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 music related websites, movie review websites, e-commerce websites, blogs, news, lifestyle etc.
Let’s assume you end up with three potential businesses: towing service, used car sales and auto repairs. 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. ssss
How to Evaluate the Business
Here are some questions to help clarify your thoughts:
- Is it something I will enjoy doing? As Harvey McKay has said, “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 times.
- My favorite activities are __________________________
- I like to serve people 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 close substitute? For example, in California, nobody comes close to See’s Candies.
- An entire session in my Business Expansion guide 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, if you have in mind marketing a line of furniture, you might consider outsourcing to a manufacturing vendor in China. Cost savings is often the prime objective, but you also free up your time and capital. The major risk is the performance of the vendor and your success in developing good relationships that provide mutual benefits.
- 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 market place. 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?
Top Do’s and Don’ts
THE TOP DO’S
- Learn your business by studying your competition first.
- Consider the benefits of starting a moonlight business.
- Objectively measure your skills and training against potential competition.
- Consider subcontracting to low-cost suppliers if you’re manufacturing a product.
- Test market your product or service before starting or expanding.
- Make a “for” and “against” list describing the business, you are in or considering.
- Talk to lots of people for feedback.
- Make a comparative analysis of all opportunities you are considering.
THE TOP DON’TS
- Quit your job before you have completed start-up plans.
- Consider operating a business in a field you do not enjoy.
- Be in a hurry to select a business. There is no penalty for missed opportunities.
- Select a business that is too high a risk or hurdle. Go for the 2-foot hurdle.
- Operate a business in which you must have the lowest price to succeed.
- Neglect to learn the negative aspects of an intended business.
- Permit entrepreneurial self-confidence to outweigh careful diligence.
- Allow the promise of a conceptual high reward to deter reality-testing first.
Download and complete the template below.
DON’T CHEAT AND SKIP IT. THERE ARE NO SHORTCUTS TO SUCCESS!