7 Steps To Find The Right Business For You (whether you plan to start or buy one)
Posted by Dennis Lowery on July 2, 2008 in Business Start Up Advice [ 0 Comments ]
If you are reading this, chances are that you are looking to make a change. Perhaps you are looking for a business to start or perhaps to buy … something to create a better lifestyle, with more opportunity and more money for you.
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For many people it’s the money that drives them. But being passionate about making money can drive you to take on things or get into ventures with only the thought of the money driving your decision.
Is the money important? Absolutely!
Is how you make it important? Yes, if making your life more comfortable is also one of your goals!
This factors in because if you started or bought a business that is capital intensive and/or heavily regulated and competitive you could find out that the business became the worst high-pressure job you ever had.
You do want to choose an industry that is growing but any industry or market that is growing fast is probably also a highly competitive one (and may become increasingly so). Unless you have a lot of money behind you it is better to think tactically than strategically about entering such a market.
The same can be said for starting or buying a business that you are unsuited for.
If you are not a “people” person then you may not want to buy or start a business that calls for you to interact frequently with people. If you are not comfortable in a sales role then do not start or buy a business where your success is tied to your personal sales efforts. One thing to keep in mind here; as a business owner you are always going to have to perform some level of “salesmanship” for your business. So understand this going in so that you are prepared to accept that as part of owning your business.
I tell clients and people that I talk with about starting or buying a business to be methodical in how they approach either one. Don’t jump ship, leave your job and pin all your hopes on something (the business you plan to start or business you buy) trusting that all will be well. Sometimes they aren’t.
I’ve been successful in several businesses (from writing, publishing, manufacturing to business services) but have also had flops. That’s normal experience for someone who’s been an entrepreneur for 26 years. Often you learn more from your failures than you do the successes. Odd but true.
Here’s how to learn from those things that don’t work out and use them to find the right business for you:
Take the elements of the things you have tried in the past that you spent time and money in exploring as business opportunities but that did not work out (and do this also for your current job).
On a sheet of paper draw a line down the middle of it. On the left at the top of the page write “Bad” and on the right top write “Good”.
For each thing you have tried and your job, list out the bad and the good aspects of it; the bad will constitute the determinants of why it did not work out for you or why it did not make you happy or fill you with any passion. The good are the positive elements that helped offset the bad but did not carry enough weight to make it work for you.
Once you have done that look at what you’ve written. Take a new sheet of paper and transfer all the good things to that page. This becomes a profile of the things that were positive that you need to look for in a business or opportunity that may present the most attractive and suitable scenario for you.
Now with your “Good” profile in front of you, take the market or industry that interests you, think about how you can utilize those good aspects in a business of your own serving that specific market or industry. Make notes about the different businesses that you can start or buy that have those good aspects to them. Those should be your focus.
Once you’ve done that calculate what I call your Personal Economic Burden (all your monthly personal expenses that you need to pay to live: mortgage, rent, insurance, food, utilities, car payments, etc.). Total that up and add 20% to it (10% for miscellaneous and at least 10% for savings). Take that total amount multiply by 12 and divide by 365. That is the daily amount your business must generate for you to be “comfortable”. We’ll call that the “Comfort Number”. That’s not making you rich but if you achieve it; it will give you a solid foundation to build on so that you can make even more money.
When you have that daily number and with it in mind, review your notes from number 5 above and research to determine if you feel that business can generate what you need to meet your Comfort Number. If so, then that is a business you should focus on starting or in finding to buy.
Take some time to think things through – never jump blindly or go off on a path that you’re not reasonably sure is going to lead you to where you want to go. The above steps will help you.
Good luck and best fortune to you (and fortune favors the prepared)!