“Hitch Your Wagon To A Star,” Ralph Waldo Emerson
“What business should I start?” I see this question asked a lot on the web. In fact, this phrase is used as a search term on Google about 18,000 times a month in the US.
It’s exciting to dream about independence, freedom, wealth. It’s thrilling to read about entrepreneurs who have put everything on the line to start their own business and actually make it a success. It’s necessary to dream it. If you can’t see it, you probably won’t get it, as they say.
“Follow your passion.” This is the mantra of Inc. Magazine and it’s heroes. Richard Branson seems to say this about once a week. I like to say, “Hitch your wagon to a star” because it combines the implication of hard work with the power of the dream.
Too many people didn’t ask the question you are asking, the one that brought you to this article: “What business should I start?”
That’s a nice philosophical question and I applaud you for asking it. You may be searching for a hot franchise, a work-from-home-in-your-pajamas business, or a path to your first million while you’re still in your twenties. I applaud you for that too.
As you progress in your search you will come across the sad history of failure that’s prevalent in this whole arena of starting your own business. You’ll read that about half of all small businesses fail within five years. About 70 percent fail within 10 years.
But you’ll ignore these facts. You’re probably certain you can do better. And I’m sure you can. You’re already asking the right questions. It is a matter of what “should” be done, as opposed to simply doing what one thinks is a good idea. It’s only a good idea if it allows you to thrive.
So the question becomes, “How can I start a business that allows me to thrive, to avoid being like the 70 percent that either go bankrupt or just hang on by the skin of their credit cards?”
1. Start A Business That Needs To Be Started
Make sure the business you start needs to be started. Sounds obvious, but this is where most mistakes are made. Most people don’t do a good job understanding the target marketing fundamentals.
Does it solve a problem for a large number of people in a unique way? Does it produce a unique product that thrills people?
You must have a target market large enough to produce the results you’re looking for. Market potential means the number of customers you can realistically expect to pay you for your product and service each year.
Can you really motivate about 10 percent of your market to buy your product or service every single year, and will that amount of business enable you to thrive?
One of the most common mistakes of the small business founder is to overestimate how much of the market they can win. Don’t estimate over 10 percent, as that is considered an out-of-the-park home run. And don’t plan on reaching 10 percent in your first few years.
Are you opening a local market business. Then how many potential customers reside in your five mile radius? Let’s say you get 10 percent of them to buy from you, is that enough for your business to thrive? How often will they return? How often must they return?
For regional and national target markets, can you afford to reach your potential customers to make them aware? Interest and entice them? Motivate only a maximum of 10 percent of those you’ve made aware, interested and enticed to buy from you?
In large market zones you can’t estimate selling to 10 percent of the total market. You will only sell to the 10 percent you can actually reach and move through the sales cycle.
If you’re considering starting a franchise, pay little attention to the “potential customers” number the franchisor will show you. You’ll only win about 10 percent of this number, even with a huge success. Plan on one percent in year one. Can you thrive on that?
2. Start A Business That Has A Star Product Or Service
Hitch your wagon to a star product or service and focus on a market that you can reach and develop. You must be able to win a critical mass of enough customers that rave about you to their friends and families. This applies to local, regional and national markets.
Your customers must become your advertisers. Word-of-mouth is critical. Now we call it “going viral.” Do you have a product or service that needs to be offered, and that thrills people when they see it?
If it doesn’t thrill people after their first experience with you, you should read the ancient Greek myth of Sisyphus before going any further. Because you will be trudging to work every day with the task of rolling a heavy boulder uphill only to see it roll back to the bottom of the hill every evening.
Don’t deceive yourself and don’t be like Sisyphus. But we already know you won’t, because you’re asking the right questions.
3. Start A Business After You’ve Had Your Passion Examined
As Sir Richard says, “Follow your passion.” But do you really have passion for the work this business entails? Consider the implications for this word so often used for business founders.
Passion is used to describe the suffering and death of Christ. It is used to describe irrational behavior such as a “crime of passion.” It often implies that the passionate person is out of their minds. Are you out of your mind?
At the least, passion requires devotion and surrender to the cause. Are you ready for this? Is your partner ready for this? Your children?
Success Can Happen To You
The beauty of this passion that starts a business is that sometimes it leads to success. It can happen. It can happen to you! I hope you will diligently understand the marketing fundamentals that will control your success. Understand Target Marketing. Put some passion into understanding the fundamentals of your customers, competitors and the overall business environment.
Do this and you will be well on your way to success.
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