I was at a small gathering last week with a few friends whom I have not seen for several years now. Sipping our ice-cold mango-peach ice tea on the covered veranda, we had a great time reminiscing our younger days – both the stupid and the “genius” things that we did.
Now that we are older (and thinking “wiser”) we only want to experience the “genius” moments and ponder upon “what’s next”. They were curious about starting a new venture and since they know that I do business coaching, they had several questions on how to go about starting a business.
Roselee was the first to use the advantage of getting a “free” consult. (You know, like if you meet a doctor at a party, and you have a medical question, something like “do you think this little bump on my face cancerous?” we tend to jump at the opportunity to get free advice, sometimes without even noticing what we are doing)
Rosalee said, “I have a business in mind that I am passionate about that I think will be a profitable business, but I don’t know much about this business? Should I still pursue it?”
Short answer, no.
Firstly, passion is not the only thing that is required when creating a business. Secondly, why do you think that this business idea will be profitable? Have you done a proper validation for this business idea? If you had and the answer is still “it is profitable”, then the answer is still “NO”.
Although you do not need to know everything about the business you intend to start, it would be beneficial if you spend enough time learning it before you start.
My advice to her and to those who have a similar question is – before you embark on your chosen business model, have a read below and determine if the business you are thinking is a good fit for you.
Five Steps to determine if you and your chosen business are a good fit.
1. Find a mentor.
A mentor is someone who is knowledgeable about the business, and preferably who have been working in the industry that you are planning to enter.
I am not suggesting that you hire a highly paid mentor to guide you, although eventually when you find the right business and want it to grow faster, hiring a business coach would be an option.
In the beginning, I suggest finding a mentor who will give you as much information you need to help you understand the workings of the business.
2. Find work in the same industry.
Do the same focused learning that you did when you validated your chosen business model as you would have with a mentor even without pay. I know, a lot of people balked at the thought of working without pay, but the best way to learn the business is by experience.
I remember Neil Patel, in one or his webinars, mentioned someone who insisted and convinced Neil to hire him without pay because he wanted to work closely with him as a mentor. I will not mention the name of the mentoree, but he is very successful on his own right today.
This step will add some time in your preparation and will delay your launch. But, it is better to wait than to start with blinders on, so to speak.
It is preferable to seek a business where you will not be competing with them for the same customer in the same location or niche. Most small business owners are helpful people and they will gladly teach you what they know if they are confident that you are not a direct competitor.
3. Evaluate your feelings toward your work.
Do you enjoy the work? Do you wake up in the morning happy to be back at work? Do you feel you have the necessary skills to be good at it?
If you answered a resounding “NO” to any or all of these questions, find a different business.
Starting a business is like riding a roller coaster. There will be ups and downs. If you don’t like the work, it is unlikely that you will have the perseverance to continue once your fledgling business hits a bump on the way.
If you think that you will stick to your chosen business because you enjoyed that type of work, go to the next step.
4. Evaluate if it is profitable.
Now that you have hands-on experience, you have a better grasp of your income stream – the costs and the revenues from the business. Thus, you can use better financial data in your simplified business plan and determine if the business will earn a profit.
As a side note: A simplified business plan is way different than the traditional “big deal” business plan taught to us, MBA grads years ago. I am not saying that the “big deal” business plan is useless and should not be used.
It definitely is useful and required if you are seeking big outside funding, such as lenders or venture capitalist, for your business. For start-ups, a simplified one is more appropriate.
5. Evaluate the degree of risk in you chosen business.
Some businesses are riskier than others or more vulnerable to competition.
For example, the following businesses have higher than average failure rates: restaurants, gas stations, florists, groceries, dry cleaners and so on.
You might hold off with the business idea or be more careful and critical with the numbers you will be using when preparing your simplified business plan to get a better glimpsed if the profitability trumps the risk.
These five steps are great for someone who already has a business idea. But, how about if you do not have a business idea, yet. How will you go about finding one?
If these questions run through your mind, I invite you to download my free mini-course, “Idea Generation Blueprint Bundle”.
Let me know if that minicourse helped you, especially if you are a woman at midlife or older who are planning to create your own business.