It is painful to start a new business for the wrong reasons. As a mentor for future entrepreneurs, one of my challenges is to make sure their idea suits them. For example, I have a friend who is a self-proclaimed "greedy" who wants to create a restaurant, but who has really no interest or skill in the business field. Loving food does not necessarily lead to a happy affair.
Of course, one solution is to find a partner who has the skills you are missing. In fact, I worked with Bill Gates at the beginning of the PC, and I am convinced that Microsoft may not have been able to grow without his partner Steve Ballmer. Bill Gates led the technical exhibition, but Steve Ballmer, a business educator at Procter & Gamble, focused on the marketing and financial side of the equation.
Many technical entrepreneurs still tend to believe that their technology and passion represent ninety percent of the equation, and that the business will occur by default. In my opinion, this mismatch of interests compared to the main drivers of activity is the main reason why the majority of new businesses eventually fail. Here are some key questions I ask you to start on the right track:
- Is there a real business need for your proposed solution? A business need involves customers with money to spend, which have an existing problem painful. Remember that customers buy solutions, not technology, and they rarely pay for "nice to have". Your passion alone, for your food or your product, will probably not change the world.
- Are you well informed and comfortable in this area? Do not enter an arena that you do not know, just because it sounds fun or easy. Match the company to your comfort level, such as franchising, multi-level marketing (MLM), freelancing, or a new product. Do not forget that all types of business require management skills and execution.
- Is your intention to maximize profit or maximize social impact? The commercial implications and expectations are quite different for non-profit organizations as opposed to for-profit entities. For example, I often find social entrepreneurs looking for investors. You may not interest investors if you do not intend to make a profit. Non-profit organizations need donations and philanthropists.
- Are you primarily motivated by the expectations of family or peers? Do not try to be a business owner just to prove something to a loved one, friend or brother or sister. There are no types of businesses that I would recommend here, except perhaps an existing family business that is already successful. If you have to continue, choose at least something you like.
- Do you have money for the bootstrap or do you need financing? If you really want to run a business in your own way without a boss or a professional investor dominating you, then start small, fund himself or friends and family, and grow it organically. Banks and investors expect a proven business model and a certain dynamism, so be realistic.
- What is your sustainable competitive advantage? Working harder for less margin is not sustainable. A successful business needs value-creating products, processes and services that can not compete with competitors now, with a plan to maintain that position. It is not funny for me to mentor business owners who are suffering continuously.
- Do you work alone or with an experienced team? Many budding business owners prefer to work alone and avoid the problems of partners, investors and large teams. There are business models for these, including consulting and freelance, that can simplify your life and limit your risk, but also have limited growth and upside potential.
So, you see that there are new types of businesses and new approaches for every personal motivation and every lifestyle. In any case, do not expect the job to be automatically easier or more satisfying than a business job. Success in any business requires a serious commitment and learning failures. Changing the business model is not a shortcut to success and happiness.
I often recommend aspiring business leaders to accept a job in another company in the same field that they envision, to have a practical overview of the challenges, to establish contacts and to learn more about their own motivations. Then, take the big step of starting your own business, with fewer surprises, good relationships and probably more savings accumulated.
Overall, it is important to remember that happiness breeds success more often than success breeds happiness. Every aspiring business owner should play on his strengths and interests, rather than listen to the well – meaning advice of friends and experts. For long-term satisfaction, be sure to drive your business, rather than letting business guide you.