A few months ago I went to a seminar on Lean Startups which was aimed at tech firms looking for some startup ideas etc. While there the speaker threw out the phrase "Make what you can sell, don't sell what you can make". And this got me thinking (when I got to grips with what he actually meant).
You see, one of the biggest curses when you're an entrepreneur is that you're normally flooded with ideas for projects and products. I always have more ideas than I could possibly implement in amongst all that I'm currently working on. If you're in business you may be able to relate to this.
So, I'd like to tell you a bit of a story with this in mind.
A few years ago I ran a training business. We offered a variety of training products and I was doing a lot of talks at business networking groups to highlight how good we were etc.
One of my talk topics was 'Low-cost and no-cost marketing techniques for small businesses' and it was very popular.
So, based on that, we developed an e-product of the same name. It was an e-book and MP3 seminar. And, as you could imagine, I was really excited about it. We spent nearly a whole week putting this thing together. We did loads of research into useful stuff that would benefit the intended buyers.
The problem was: I had no idea if anyone would be interested in buying it. In my naive enthusiasm I made the assumption that because the talk was popular then it's obvious that my target market wouldn't mind spending £20 buying something along the same lines.
We put loads of effort into the product, spent time and effort on email marketing and promoting it at events and we sold just one copy. 'Make what you can sell, don't sell what you can make' didn't even come into my consciousness. And, because of the failure of our efforts, we lost heart and dropped the product.
The big mistake was that we spent no time at all thinking about whether anyone would actually buy the new product. The audience that wanted low-cost and no-cost really wanted 'no-cost'.
And if you launch a product or service that nobody wants to buy then it's been a thorough waste of time, effort and money.
Another mistake was to rely on only 2 real marketing channels but we'll get onto that in another article.
But what should you do about this kind of thing? What should you do with these great ideas? How can you strive to 'Make what you can sell'?
In my view, the first thing is to ask yourself: "Despite the fact that I'm excited about this idea, will I be able to get other people excited enough to buy it?"
This means starting with a bit of research in your target market. Why not ask a handful of folks you know in the target market if they think it's a good idea and (more importantly) whether they'd be inc lined to buy it. You could also write a blog post on your website about the planned product and post it out on Twitter to try and get some feedback (Twitter didn't exist when we launched our doomed product).
You also need to look at whether anyone else is successfully selling such a thing. If they are then it means that there is a market. You could then examine how your competition approaches the market and emulate some of what they do. Don't copy them but if they have a good idea then look ways to adapt it to your own style and approach.
It could be possible that there is a gap in the market and your research then becomes ever more important since you'll be blazing a trail for other entrants if they latch onto this gap when you've stepped into it.
I hope that help but a huge caveat with this is that you shouldn't spend too long researching. If the feedback shows that the idea is good then get on and launch it and do it quickly. It's better to fail quickly for reasons we'll discuss elsewhere.
If you have thoughts on this or have similar experiences then we'd love to hear about it in the comments below.
One of the biggest challenges that many of us in business have is the sheer number of potentially good business ideas or potentially profit-making concepts that we tend to generate.
Now I say that's a problem because very few of us have the resources available to have someone else do some digging to work out if the idea is feasible. Just because you might think it's going to be the next sun-dried tomato concept doesn't instantly mean that the market is going to open its wallet and let you in.
So let me explain some of my thoughts on how to recognise a potentially good business ideas and maybe it'll help you.
At the time of writing I'm working on couple of ideas that are likely to lead to profit. One of them I can do on my own and the other I will need help with. And these are just 2 of many business ideas I've had lately.
But how have I decided that these two ideas are worth pursuing?
Well I have a little process for checking out whether business ideas might be right for me and also the market. And it starts with just 2 simple questions:
- Does the idea keep me awake with excitement?
- Have I checked with trusted business buddies about whether there is potential in the market for the idea?
So let's have a think about the first question: Does the idea excite me?
Most of the ideas I generate are just that; ideas. They are thoughts for where I might take the business to add profit streams or completely new business concepts that have little to do with what I'm involved with at the minute.
I often write down the ideas to see if they weigh on my mind at all. And if they do then I'll do a little digging about whether it's something I could legitimately fit into what's going on now and within the near future.
But the one thing that goes through my mind at this stage is whether I'm excited about the idea at all. Do I find myself sharing the concept with people? Have I mentally begun to write the business and marketing plan? Does the idea give me a buzz? Does it keep me awake at night?
If I can't see any of these things happening around an idea then I often dismiss it. And this is because I know from experience that any business idea will need lots of work to make it a success. I'll need to put time, effort and money into it and if I can't see myself continuing to be excited about it when things get tough (and they normally do at some point) then I'll likely lose enthusiasm and this increases the chances of me giving up.
That's not to say that the idea as a bad idea. I just have to recognise that it's not necessarily right for me.
The next question is about the market: is there potential in the market?
This is a little more tricky in many ways because sometimes you could be bringing an unknown product or service into the market and will have to create demand for it.
Thankfully most of my business ideas relate to existing markets and could be considered a favourable variation on an existing theme.
These days I tend to look for ideas where the potential market could be huge if tapped in the right way. Not easy, since many people want big markets, but it certainly cuts out trying to get attention in crowded niches.
When I've worked out the idea a little I'll then share the thought with a few trusted business colleagues to get their responses. I belong to a business group that I trust to give me honest feedback (both bad and good) that I can take away and consider.
If the feedback is mostly positive then I can move forward with more detailed feasibility study about the market and how to take the idea into market. Again, I often ask the same group of people.
So, that tells you a little more about how to recognise potentially good business ideas and if you've any further thoughts then please share them in the comments box below.
OK, so this is part 5 in my series of articles on 'How to assess a business opportunity'.
This time we're looking at (cue uplifting music and training montage...) motivation
Motivation is best described as the reason or reasons that anyone does anything.
But let me expand on that just a little: Always bear in mind that 'nobody does anything for no reason', there is always a reason for what people do.
Strong motivation is absolutely vital when you run a business, you need to be very very clear as to why you are doing what you do. Without this you will seriously struggle, end of story.
This means that you need to know very clearly the reason or reasons behind the effort that you make. Especially when things are not going as well as you would like, and I can tell you now that there will be plenty of those times.
So what are the key reasons that people get into business? Many people get into business to make money (in some cases lots of money), some folks get into business because they see it as a way of avoiding working for someone else (to some extent this is my motivation), many people run businesses because they enjoy the freedom of making their own decisions and doing what they want and enjoy.
The thing is, you need to be very clear early on what your motivation is. Why do it? Why put in those long hours? Why work so hard?
Without this clarity you will feel as though you are working for no good reason. When you start a new business you will have to work very hard, you will usually work long hours, and you will often face many challenges that those in employment will never face.
So having a clear reason for doing it all gives you the ability to look beyond the challenges you have in front of you right now and also to understand that the most worthwhile things are often the most difficult.
Now, I've often been accused of being an inspiring and motivational person. This is because I always encourage people I meet who are in business or looking to start a business to really go for it. When you run your own business you begin to realise that your success or failure is often in your hands. This can be very liberating, especially when you wake up to the amazing possibilities open to you in business, but it can also be quite terrifying to those who have never experienced this before. And this is one of the many reasons why many people don't start businesses.
The thing is; when you run your own business there are no excuses, you are the boss, you make the decisions, and you have to be responsible for the action necessary to make your business work. It will be the clarity of your “reasons why” that will help you take the necessary action.
This means that, more than anyone else, you have to be self-motivated. You absolutely have to know what you're doing and why you're doing it.
The importance of this to success is why a whole industry has been developed over the last 100 years purely dealing with motivation. There is half a library of motivational books and recordings available to you to help this.
And bear this in mind: you have to take responsibility for your motivation. Nobody else is going to give it to you. But, as mentioned in the previous article on expertise, this is something that can be learned. Your first tentative steps in business will rely heavily on your level of motivation which has to come from you.
Another important thing to bear in mind is that if your motivation revolves around somebody else then at some point you are likely to come unstuck. I know from my own research that one of the reasons why failure rates on diets are so high is because the person on the diet is trying to lose weight and look better for someone else's sake. It is vital that you have your own reasons.
You have to do it for your reasons and nobody else's. Even if you start a business to feed your family you need a personal reason to do it (and the well-being of family is, for many, the strongest reason).
Interestingly enough, this morning I was at a business event and one of the speakers said that she had started her business not because of any high-minded ambition but simply because she was skint and needed to make some money quickly. As a single mother, I'm sure her motivation was very strong indeed. Now that she's been in business a while (2 years) she's woken up to the possibilities out there from having a business and this provides her with different motivations to develop her business into other areas.
So, think long and hard about why you do what you do. You need to have a very clear and very strong motivation for starting a business. Take it from me, running a business is the best thing you could possibly do in your career but it also far from an easy option.
The previous posts in this series can be found here:How to assess a business opportunity, part 4 - Experience
How to assess a business opportunity, part 3 - Money
How to assess a business opportunity part 2 - Interest
How to assess a business opportunity part 1: Time
I'd love to hear your thoughts on motivation when starting and running a business or for when looking at how to assess a business opportunity so please write them in the comments box below.
Since beginning this series on 'how to assess a business opportunity' I've realised that writing just 4 or 5 articles was simply not going to be enough. In fact I could write a dozen articles and something else might occur to me for consideration.
However, this time we're going to look at 'Experience' or 'Expertise'.
It's absolutely vital to any new new business idea that you give serious thought to what kind of expertise you can bring into the mix. And your conclusions may well surprise you.
So, for this exercise, ask yourself this fundamental question:
Do you have an prior knowledge or expertise in the business you're assessing that will help you to get started?
You see, most of us have a wide variety of skills and knowledge that can be applied to a business. Maybe you've worked in sales or customer service, you might have some useful IT skills, maybe you know something about the product or service you're offering. The list could go on. So try and compile a list of your skills so you can look for ways to apply them immediately into your business operation..
A lot of people are being made redundant right now and becoming freelance at what their old job was. So there seems to be a growing army of HR, marketing, health and safety, project management and PR consultants in the small business world.
There's nothing wrong with that but only a small number of them had any experience in being self-employed or running a small business. And that presents a problem for them, in that many of the skills needed for self-employed are very different to those required for working for someone else.
But all is not lost if you have limited experience, there's very little that can't be picked up if you're willing to put some time into learning and application. And it certainly pays to be a very fast learner when you start a business.
However, your self-education must be constant. In business there is never nothing to learn. Just when you begin to think that you know what you're doing and that there is little more to learn, you put yourself in a very precarious business position. Someone else may come along and steal your market share because they have a new approach or a different and more exciting way of doing things or marketing and promoting business.So, please don't rest on any laurels.
One of the best things about many network marketing opportunities is that constant development and training is usually provided and often very comprehensive. However, it's usually a good idea to try and examine the costs involved in such training to make sure that you've taken this into account in your financial planning/projections.
Having said all of that, there are plenty of books, CDs, videos, and websites available for almost any business learning that you require. A useful place to start is YouTube where thousands of people in business have shared their expertise and their experiences and this gives you the opportunity to learn very quickly.. And it's often a very good idea to try and learn specifics, so you can pick up relevant and directly applicable skills and knowledge as quickly as possible
A useful thing to bear in mind is that any money you spend on training or learning materials such as books or DVDs are necessary business expenses and can help to reduce your tax bill (please talk with a tax adviser on this to make sure you're on the right track).
From my own experience; one of the most important lessons to learn as soon as possible is all about successful sales and marketing. I'm normally quite amazed by the number of people who start their own small business and don't spend serious time and money investing in selling and marketing skills.
I'm probably going to write a broad overview of a marketing plan at some point in the near future but take it from me that it's absolutely essential that you understand who is in your target market, what messages you're going to send to them and how you're going to reach them. Without this information/knowledge/skill you will struggle to gain new customers quickly and this could frustrate your efforts early on.
So, plenty of food for thought in this article on how to assess a business opportunity but my advice is to start learning as early and as much as possible. This way you will (hopefully) have picked up some useful knowledge and skills before you even start in business.
If you've any thoughts or ideas on this I'd be happy to hear them. Please feel free to write your comments in the box below.
The third part of this series is a very important part of 'how to assess a business opportunity' and it's all to do with money.
You see, despite what many people say, money is incredibly important. In fact, some folks even go so far as to say that it's almost as important as oxygen in that it's very difficult to live without it.
Most people know that any business needs money to start off with and should ultimately make more money than what was invested. However, what many people overlook is the fact that businesses also need money to run its normal day to day operations, this usually known as working capital.
You see, many have business opportunities, such as network marketing, require a start-up investment of a few hundred dollars or pounds just to join the scheme. In the UK this is capped at £200.
But you'll also need money to keep the business going before you start to see any kind of return on your investment. Your business has ongoing costs such as travel (fuel), telephone, postage, networking meetings, premises, professional memberships (maybe), subscriptions to journals, your own self-education and various others. And all this before you even get to turning over into profit.
When I was involved in a network marketing business in the mid-90s, the business Kit cost me have just under £100. There was also an ongoing education system which cost me an additional £30 a month, I had telephone costs of around £10 a month, travel costs of anywhere up to £40 a month, as well as the cost of marketing and promotion materials. So before I even started the business was costing me around £100 a month. This means I would have needed to make a profit or £1100 or more in the first year just to make back my investment.
To many people this can seem like a bit of a tall order. If you are on a low income or don't have spare cash or spare ongoing income to cover this then you would need to examine very carefully how much the business will really cost you month in month out until you start turning a profit.
However, many people use money as an excuse for not succeeding. Let me tell you a story which will help you understand what I mean by this.
Imagine I came to you one day and said I have a Ferrari which is worth £100,000 but because I'm desperate for cash I will sell it to you for £20,000 if you can get the money by lunchtime tomorrow.
In most cases most people would instantly see the profit potential in this deal, even if you didn't keep the car you could certainly sell it on for an almost instant (and substantial) profit.
So, ask yourself this question, would you do what ever it took and work all night just to get your hands on £20,000 by tomorrow lunchtime? I know I certainly would.
But herein lies a bit of a problem; many business opportunities take much less money than buying a used Ferrari but the return on investment takes a lot longer to materialise. In other words it's going to take you longer than to the following day to make some money. But at least you're not going to have two scramble to raise tens of thousands of pounds.
So, the main thing to consider is whether you not only have the start-up required to get the business off the ground but also can find enough money to keep the business going. Very few businesses have the situation where you just put money in right at the start to buy into the opportunity and then don't have to put more money into the operation of the ongoing business.
I know I've talked a lot about network marketing in this particular post thus far, obviously that's not the only type of business available to you if you're looking for a spare time business opportunity.
There are some businesses where buying a little bit of stock and selling it on will quickly turn around a small profit. You can also make your own goods, I know a handful of people who make their own jewellery and sell them online through websites such as eBay and Amazon.
You could also set up a part-time writing business where you take on freelance writing projects for organisations that don't have the capacity to write for themselves. A good example of this are those who write blog posts for corporate websites. The benefit of this kind of business is that you can get a free website set up to offer your service, you can use your mobile phone as your contact phone, and the financial cost of producing the goods is nearly nil.
So, hopefully you've learned a little about the money involved in starting and running a business when you come to assess a business opportunity.
If you have any thoughts or experience (good or bad) on the money side of 'how to assess a business opportunity' then please feel free to write them in the comments section below, I'd love to hear from you.