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 can we choose a business idea that has a chance of winning?
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 here’s my study of the subject and the path I’ve chosen to follow going forward.
The 6 steps to choosing you business idea
- Understand Business: what it means and who you need to become?
- Start with Passion: what do you love doing enough to struggle for.
- Get Experience: start by learning in your chosen field.
- Start Part Time: Take time for your idea to develop while you’re still ‘on-the-job’.
- Solve a Problem: Find what the big problem in your area is and find the solution you can provide for your specific customer.
- Find your ‘Why’: really establish the core vision. Why do you really want to do this and why do people really need/want it?
These are 6 basic steps that I followed to come up with my business idea. It’s still a work in progress, but I believe by following these steps I’m on the way to building something I can be truly proud of, and something that will have great value.
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6 Steps to your Million Dollar Business Idea
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 business needs to understand the customer, understand the need, know how to truly fullfil that need and how to deliver satisfaction. The business 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 qualities
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 organization 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 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.
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 issues about style of leadership and so on, and you need to decide if you are the type of person to build a business.
- So step one is to ask, what kind of person are you?
2. What skills do you have and what can you develop going forward?
3. What business contexts do you know, or have experience in, or are willing to learn and commit to?
4. What are your limitations?
2) Step 2 Start with Passion
The next step is to find your passion.
As Evan Carmichael says, “You must love what you do.” (Youtube)
He argues that it needs to be about more than making money. You need to find a mission, a passion, 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. As Simon Sinek states, this is useless advice. If it was so easy, we’d all be doing it.
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 work.
But then it struck me, I love writing. I love studying and I love writing. I even dreamed of getting a PHD at one time, but I gave up on it because I was sick of being a poor student. But 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 guess I have to admit my passion is learning, and writing, and my real skill is teaching. I now have years of experience at that.
If I put those together, then I’ll have a business that I may be able to succeed at and I can enjoy for the rest of my life.
So you need to find something that you have a passion for. Something that will drive you through the tough times. A mission that will pull you through and keep you striving. And it should also intersect with your skills, what you know you are competent at doing.
Now we have a vague idea of what it takes and what we are passionate about, Evan Carmichael’s advice gave me a few more keys.
3) Get Experience
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 centers and I’ve done tutoring.
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 interacting 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 changes. 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. As Gary V says, give away your best content and leverage that against your brand. So I’m trying to give excellence, and to give it for free and to trying to become an expert. Hopefully I’m doing some of the right things, but if not I’ll learn as I go on. As I’m doing my passion, I’m not in a rush to do anything.
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 Business Review, Pg. 24)
Jack Ma, along with 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.
So, you need to find a problem that you know and you understand. For, me I know of a few little problems in the education industry that could use fixing.
Once you know your problem, then you need to ask the following questions:
- What is the problem?
2. How many people have the problem? Size of the market?
3. Is that market stable or growing?
4. How will solution benefit customers?
5. What percentage of market can be captured?
6. What is the competition?
7. Who exactly are the potential customers?
8. How can you reach the potential customers and make a transaction?
9. How does the utility of the product or service compare with substitutes? (Harvard Business Review, Pg 26)
For me, there are many problems in education.
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.
There you have a whole mountain of problems worth solving and not many people stepping up to solve them.
I haven’t got it all worked out, but that is my area to focus on. And if I can get a solution and build it into a package that can communicate with parents, students and hopefully teachers, then I can provide massive value to the industry.
6) Lastly Find Your Why — Simon Sinek
If we want to go further than building a brand, to offering a service, to developing a service and product for a problem, 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 fullfilment. These are obviously great motivators. It’s very rewarding to do something that fullfils 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
Simon Sinek’s Golden Circle:
The graphic is not too clear, but basically it 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 that 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 favorite 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 products that are easy to use and inspiring.
Why do they produce it? Everything they do is about challenging the status quo to finding new ways of doing things.
Sinek argues that we don’t buy Apple because they are the best computer company. We buy Apple because we believe in what they believe in. We buy their why.
A company worth building and one that can truly engage 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 problem I have already established, 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.
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 achieve their potential and to become the best they can be to enrich their lives and make the world a better place.
Now given all the problems with education, 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? How can I provide it?
These questions will lead to my why.
My why is to make people inspired, enlightened and empowered. My why is to help make the world a better place.
Specifically, at this stage, I believe that by educating my students and readers about how to achieve success, directly and explicitly, will help with many of the issues of the education system. And I will do this because I believe in empowering people to achieve their best, for themselves, their families and for us all.
So, the 6 steps to choosing your business idea
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
Of course, I always recommend you find your own path, but for me this makes perfect sense, and I’m happy to endorse it to those who need to follow a limited path.
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.
Thank you 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.
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