Featured image by Charles Forerunner.
Businesses fail at a high rate. We’ve all heard the hard to believe statistics. However, people take on the challenge to defy these staggering odds all the time. So, how do you choose a business that has a chance of winning?
Why start a business to begin with?
We start businesses because we want to be our own boss. Or we want to create something. Or we know it is the only way we will get life satisfaction.
At the end of the day, I think we look to build a business for two reasons.
Firstly, we want to build the type of work place we dream about and do the type of work we want to do, so that we ‘never work a day in our lives’. We dream of creating a machine that lets us live the inspirational life of being innovative pioneers and entrepreneurs.
On the other hand, we build a business because we look to make as much money as we can, so that we can live like kings and queens and do whatever we want.
Whichever way motivates the innovative entrepreneur, it is still a risky and incredibly tough road from initial decision, to taking on the challenges, to the eventual moment of business success.
Given these difficulties, how do we chose a business right for us?
How do we take on the challenge, and ensure we are on the right path and have a fighting chance of success?
There may be no definitive answer, but read on to find out my study of the subject and the path I’ve chosen to follow going forward.
My Business History
Last year I started out on a path to success.
My wife and I had a mission that we wanted to become financially free. We were tired of having no control over our time. We wanted to have the time to feel good, to spend for our family, and to do the things we want to do.
So we set out on our path to success. (See where we began here.)
This led us to investing. We learned the way to get free was to save and invest and multiply our money until we could build a money machine that paid us an acceptable passive income. (Learn more about investing here.)
We poured our money into the stock market in good safe stocks and we’ve ridden the highs and lows. Now we’re learning how it all works and we know how to trade to expand our money.
However, given we’re on a fixed income, we can only invest so much every month. Therefore, there is a limit to our growth. Especially if we want to stay safe. And at the current rate, we’re looking at many years until we can reach the magic number we need for freedom.
At the same time, I have been devouring all the personal improvement material I can and am beginning to feel I am a much more capable, confident and effective individual.
So, this limitation met with my new positive and proactive mentality, and I decided it’s time to look at building a business.
Business is the Solution:
If investing is limited and my current cash flow is holding it up, then I need to develop a way to get more.
This is nothing new to me. I actually tried before – however, it wasn’t all that successful. (Read all about it here.)
But learning those lessons, I realized that I really was never destined to win in that business.
However, I have no regrets. It was a very valuable experience. I learned a lot about areas that I can use going forward and I have become a lot more switched on since then.
So how do we choose the right business for us?
6 steps to choosing a business
1) Understand Business and our personal context
First of all, you need to understand what business is and what is needed to be a successful entrepreneur.
The Harvard Business Review defines entrepreneurship as follows:
“[Understanding] a problem, [grasping] its full context, [connecting] previously unconnected dots, and [having] the vision, courage, resourcefulness, and persistence to see the solution through to fruition.” (Harvard Business Review Pg. 12) ( indicate a simple change of tense to fit the text.)
So, a business is essentially a solution to a problem. Someone needs something, and the business is the solution to that need, or that problem.
However, for the business to be successful, it needs to grasp the full context of the problem. That means, it needs to do more than just see the problem and then offer a product or service. The venture needs to understand the customer, understand the need, know how to truly fulfil that need and how to deliver satisfaction.
The enterprise also needs to know how to operate within an industry that involves many conventions of operation and legalities that will influence and limit the business.
The business owner
The business owner must also have the qualities needed. They must have a vision, and have courage and resourcefulness and persistence.
These are essential. Because a business is more than just a document or one person working. It is an organisation with machinery and logistics and it needs leadership to enable employees to solve the problem it set out to solve.
These skills can obviously be harnessed and taught and enhanced, but essentially, not everyone wants to be that kind of person. If you aren’t prepared to be that person, then you should be aware and accept that limitation.
I’m still not sure I am that person. But I can see a way of developing the skills step by step and I want to grow from this challenge. We’ll see how far I get. But I figure it’s worth the challenge.
Beyond base qualities:
“… to launch a successful venture, you must also make other people see the merits of your idea and invest in it … Your ability to lead, persuade, take feedback, and build a network will determine whether you’ll actually be able to bring your idea to fruition.” (Harvard Business Review Pg. 12)
Add to these higher level skills, several issues about style of leadership and so on, and you need to decide if you are the type of person to build a business.
I’m assuming you have made the decision. I’m dedicated to try and I’m going to assume you are too.
So step one is to ask, what kind of person are you?
What skills do you have and what can you develop going forward?
In which business contexts do you have expert knowledge, or experience, or are willing to learn and commit to?
What are your limitations?
I asked myself these questions.
At 37, I’m not going to be able to compete in industries where I need to start from scratch. I have to accept that I don’t have any experience in big industry, or cutting edge technology, or medicines, and so on and so on.
It’s clear my main area of strength is teaching. I know about education, and the education industry and I know how to teach.
Further to this, I can claim to have experience in customer service, online teaching and now blogging. So I guess I know a bit about customers, online education and marketing.
I also know about creative writing and I’m dedicated enough to learn about publishing.
These are the contexts I know and I guess these are what I have to stick too.
Skills and Limitations:
I know my areas of skill and my limitations.
I have already outlined my areas of skill. However, my great weaknesses include networking, sales, leadership and many more vital skills of business.
So, given these limitations I’m going to start small time and gradually build.
Starting right here with this blog, offering content to people who are looking for these kinds of lessons, is a great place for me to start to develop my ideas.
This is essentially a good place for me to learn and for me to work out just what kind of education people want.
2) Step 2 Start with Passion
Following on from my lessons, it seems the best place for me to start is to find my passion.
As Evan Carmichael says, “You must love what you do.” (YouTube – 3 Steps to Startup.)
He argues that it needs to be about more than making money. You need to find a mission, a passion, or a calling to change something in the world. You need to have a big driving force that will push you through every barrier. Otherwise it gets too hard.
But how do you find your passion?
For me, I like the idea of finding something you’d do even if you didn’t get paid to do it.
It took me a while to think about this. At the beginning, everything I thought of was work. And I didn’t want to just work.
But then it struck me, I love writing. Studying and writing seem to be two things that I really am inspired by. Once upon a time, I even dreamed of getting a PHD, but I gave up on it because I was sick of being a poor student.
However, now I began thinking, if I could do one thing that would keep me satisfied for a lifetime, even if I wasn’t getting paid to do it, it would be studying and writing. It inspires me.
So I started writing a novel. It started as a co-curricular activity at school with a group of after school students. I thought it would be a ‘nothing’ short story in the beginning. But then, as I started to develop a business approach to life, all of a sudden this little hobby activity turned into 300 pages of an almost completed novel.
Also, this blog, that I thought would last a few months has lasted over a year and now no matter what is happening in my life I’m always thinking, ‘what’s the next topic’. Now I’m starting to take it a bit more seriously as well and trying to learn how to actually turn this part time study into a business in its own right.
So if you don’t know what your passion is, you should take time to ask yourself, what would I do even if I didn’t get paid to do it?
What do you love? What do you want to achieve in your life?
This last question helps me all the time.
I imagine myself at the end of my life and imagining what will I regret not doing?
When I ask myself this question, I imagine myself on the death bed thinking, why did I never try to write that novel? Could I have made it as a blogger if I followed my inner voice and my ideas?
If I had just had the courage, what could I do?
I suggest you try asking these questions and see what you start to think about.
Big Change in Mindset
Until I started this mission for success ,I never really thought writing or blogging could be a business or a career for me. So I never pursued them. Instead I gave up on academia, and I gave up on creative writing, because I felt like I wasn’t good enough to make them pay.
I took up teaching, because I knew I could earn a living from teaching.
So, I guess I have to admit my passion is learning, and writing, and my real skill is teaching. If I put that together, then I’ll have a business that I can succeed at and I can enjoy for the rest of my life.
For now, the first step will be to continue learning through writing this blog, but ultimately trying to make it pay. I will also need to learn more about publishing and learning how to market my soon to be finished novel.
At the end of the day, I might not have the goods to succeed at these things, but it is the only option I can see where I have the skills, the knowledge, the context and the passion to try and to keep trying until I have a chance of success.
Now I have a vague idea, Evan Carmichael’s advice gave me a few more keys.
3) Get Experience
Before starting out on the tough road of owning your own business, you should look to get experience working for other businesses within the industry you want to enter.
Work in the industry. See how others run their company. This is important advice. It is great to get paid to make mistakes and to get an education while you learn the industry you are in.
So if you are considering building a business, and you have considered your areas of skill and what you could possibly do. And you’ve started to know what your passion is, then it’s a great first step to get a job in that industry.
I know for many of you, you will want to skip the education and go right to being a super star entrepreneur. Or you might feel the stress of needing to start before you miss out. But I think this is the best piece of advice.
If you just have an idea and a passion, you don’t know what you are doing. You need to learn your customers and learn your industry.
This advice is lovely for me. I’m too old and not in a position to bounce around and take jobs for experience. However, I have a job in education and years of experience. I have skills as a teacher and I know how schools are run and I’ve worked in language centres and I’ve done on-line tutoring.
Given these experiences, I know students, and I know how transactions are done in education. I know the expectations of the players and I can work out the needs and the wants of my customers. I also see the competition and I see the niches and expert problems that I can make my own and solve.
So knowing education, I have an advantage on anyone who doesn’t have experience. And having experience in teaching and even doing online teaching and working in schools and various different models, I now have the knowledge to develop my own model to teach.
But, I’m still getting more experience. Every day I’m learning new things about different types of students. I’m gaining experiences with new styles of teaching. I’m interactiong with new technology and learning new skills.
I now need to look at my limitations – leadership, networking, sales, persuasion and marketing, and so on, and use this time as a way of learning.
Leadership is certainly something that schools offer and networking, given I’m set on this industry, will be essential for me to succeed.
And so my learning continues.
4) Start on the side.
Evan Carmichael’s third piece of advice is to start on the side.
Once you’ve worked out what you can do, you’ve established your passion and you are getting experience, it’s time to see if your idea floats or sinks by testing it.
His advice is to get one customer. From there you keep building to the point you can quit your job. While you do that, you continue to get connections in the industry and you develop your business as you go.
Great ideas always change. As you go from one customer, to two, to ten, to however many, you learn what the market wants and you change your approach to deliver what the market needs.
This is a safe way to build and it costs very little.
So to start, we should go part time and begin to build a brand and test the ideas.
This is the stage I’m currently in now.
I am working a full time job and on the side I am writing a novel and writing a blog. As I start to learn what I’m doing, I start to see what the market wants and I start to develop my content and my style and potential future services to what the market wants.
At this stage I’m not so interested in making a lot of money. I’m trying to give excellence, and to give it for free, and trying to become an expert. Hopefully I’m doing some of the right things, but if not I’ll learn as I go on.
To go beyond this, to what I would see as a genuine business – something that could be scaled and be a full time venture of value – what do we need?
5) Solve a problem
“In 2004, leading expert on entrepreneurship Jeffry Timmons described a business opportunity primarily as a product or service that creates significant value for customers and offers significant profit potential to the entrepreneur. Increasingly, entrepreneurs and those who study entrepreneurship are focusing on what creates that value to begin with, on defining and refining the problem that needs to be solved for customers and users.” (Harvard Pg. 24)
Many other entrepreneurs echo these sentiments. They argue it comes down to finding a problem that needs to be solved and giving value to those who need the solution.
So what is the problem you can solve?
I believe we need to follow the steps above. I can’t simply say, the problem is global warming, I’ll make an electric scooter company to solve it. That’s not my area, I know nothing about it, and I don’t have the real passion for scooters or world transport that it would take to build that solution.
You need to find the problem that you can solve. The problem that you understand and you are passionate enough to try to solve.
Once you know your problem, then you need to ask the following questions:
What is the problem?
How many people have the problem? What is the size of the market?
Is that market stable or growing?
How will the solution benefit customers?
What percentage of the market can be captured?
What is the competition?
Who exactly are the potential customers?
How can you reach the potential customers and make a transaction?
How does the utility of the product or service compare with substitutes? (Harvard Business Review Pg. 26)
For me, the problem is what we teach.
I’ve spent the last six years or so listening to complaints of every kind from teachers, students and parents about what is wrong with education.
As Jack Ma often says, “when you hear people complaining, that’s the opportunity.” (YouTube)
There you have a whole mountain of problems worth solving and not many people stepping up to solve them.
Well, not to solve the big problems.
The big problems:
Some of the big problems I’ve heard include:
- Schools treat children like factory products.
- Schools teach mountains of information, to many students who will never use it. But they don’t teach them about real life necessities like money, or how to budget, and so on.
- They are becoming outdated. The jobs they are preparing students for will no longer exist in the next 20 years.
- They are not entertaining or engaging.
- Schools tend to tune out creativity.
- Schools do not inspire students to see the world with confidence – they don’t actively teach a success mindset.
- We don’t teach life skills or character or how to be effective.
- We don’t teach leadership or relationships or these higher level qualities in any explicit manner.
Schools generally teach academics and they try to instil some of the rest in implicit ways.
These are the problems I hear people complaining about.
So maybe one of those could be my problem, or the whole thing could be one massive problem, that I can work on trying to develop a solution.
So if I can envision a way to overcome these problems, then I can teach students how to be successful, and thereby provide awesome value.
I haven’t got it all worked out, but these are some big problems that I can bring valuable solutions to. And if I can get the solution and build it into a package that can communicate with parents, students and hopefully teachers, then I can provide massive value and disrupt the industry.
Try to think, what are the problems that you can solve?
What is the valuable contribution that you can make to an industry or area that you understand?
Once you can answer that, then you’ll have a good idea of what business you might be able to choose.
6) Sinek – Find Your Why
If we want to go further than just building a business, to developing a service and product that has true branding potential, we need to find a why.
Effectively, the great businesses build movements, not just business models.
Why you need to find your why.
Simon Sinek argues that a company shouldn’t be about making money. He says money fuels the business to help them to achieve the cause. The importance of this is purpose, passion and fulfilment. These are obviously great motivators. Also, it’s very rewarding to do something that fulfils a cause or a mission, not just grinding to make money for money’s sake.
He also shows the benefits. Great companies have and know their why. This is the Golden Circle.
The Golden Circle
The graphic, along with the explanation, shows that every business knows what they do. They sell a product or they provide a service.
Some companies know how they do it; they have a special or unique system or recipe or formula for providing something special to the customer.
However, very few businesses know why they do it.
By why, he means what is their purpose, what is their ultimate goal. And the ultimate goal shouldn’t be to sell a product or just to make money.
It should be more than that. You should be in the business because you believe in it.
Now don’t get me wrong, I’m sure there are plenty of businesses that succeed focus on sales and making money. But they are not the truly great stand out companies. The companies like Coke, Nike, Apple and on and on, that have true power, influence, longevity and mega profitability, are the ones that have a why.
We will stick to Simon’s favourite example. He often quotes Apple, as he says because it is easy.
What do they produce? They produce computer products.
How do they produce it? They produce well designed and easy to use products.
Why do they produce it? They very clearly state, and it is the heart of their message to all their customers, that: everything they do is about challenging the status quo. They believe in the power of technology to open up the world to everyone.
It is their why that makes them more than just a computer company. And it is this why that draws so many people to join the movement and buy Apple products, regardless of price or competitor quality.
A company worth building and one that can truly engages with customers is one that has a why.
So for me, what on earth is my why?
Building on developed skills, passion, context, ability, to my path and to the problems I have just outlined, I think I can build up to a why.
In fact I think I knew my why a long time ago, but I had to give it up.
When I first went into teaching, in fact on my very first teaching resume, I put down my mission.
My mission was to enlighten, inspire and empower students to become the best they can be, to enrich their lives and make the world a better place.
Now given all the problems with teaching that I outlined above, that mission was quickly forgotten in the name of firstly surviving, then adapting to make compromises for the system and the needs and wants of its variously interested parties.
But if we strip it back – what do my customers, students off all ages, need? and how can I provide it?
Or, what is my why?
My why is to make people inspired, enlightened and empowered. My why is to help make the world a better place.
So why do people want what I’m trying to provide?:
a. Education can give you the life you really want.
b. Because the current education system is ineffective and inefficient.
c. Because people need to overcome their fear of the future.
d. Because people need to be confident about the future.
e. Because we need smart people to go out positively and make the world a better place.
We believe education is the key to success for you, your friends and family and the human race!
Well, this is what I’m moving forward with now. Since I started this journey to success, I have become so much more positive, confident and effective. I have a mission and a purpose and everyday I feel I am growing stronger and more closer to becoming the person I always wanted to be. I believe this is being brought about through these lessons I’ve being learning. These success lessons, that I was never taught in school. And I believe this is something I can continue to develop into content, into products and into services that can bring tremendous value to the lives of the people I am able to reach.
And why do I want to reach them?
Because my biggest person complaint is that we don’t teach this stuff in school. And I think society will be so much better for me, for you and for everybody else, if we did.
Think about what is your why.
What would you change if you could change anything?
Think of the biggest problem you want to see solved.
Imagine the solutions that you can bring to help change the world for the better.
What can you do to make your life, and our lives and the world a better place?
What is your why?
So, the 6 steps to choosing your business
1. Understand business and your personal context
2. Develop Your Passion
3. Learn from experiences
4. Start on the side
5. Find the problem that you can solve
6. Learn your why and go big time
At the end of the day, starting a business is not for everyone, it might not even be for me. But I want to live an epic life. I want to live without regret. I want to go for the things that I value and the things that I want. So I’m going to try.
I figure these are the safe steps towards me having a chance to build that business that not only sets me free, but also gives me the wealth I need to do what I want and also the rewards of chasing a fulfilling mission that I will be inspired to do for my whole life.
That’s what I call a path to success and it’s worth striving for.
Please comment below and let me know what you think about the ideas above. I’d really love to hear what you think and your feedback will be super helpful.
If you liked this, please check out more ideas about business here.
And as always, thankyou for allowing me to share and for yourselves, never stop striving for success.
Live inspired, get enlightened and become empowered to have the life you always dreamed about but never really believed you could have. It’s worth trying, striving and fighting for.