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Step Two - What Will my Business Do?

At this stage many people have a notion that they want to ‘go it alone’ but do not always know what their business will do.

In some cases people already have an idea that they wish to explore. In any case, it is sensible before marching off in any specific direction, to check that your idea is sound and that it will make a good business.

A business must serve a need or solve a problem. Ideas often relate to our passion for something that we do or for which we have a natural ability. There is a catch here. What you enjoy and do well for others on a personal basis, may not necessarily make a good business.

Your idea may simply not fulfill the needs of a wider audience. It may not be the right time for your idea for commercial or other reasons. There may be insufficient demand to satisfy your desired income. Your idea or skill may meet a need but nonetheless, it may work best for you as a trades-person, a consultant or a self-employed person - it may not be scalable or sustainable.

What is a business? A very contentious question indeed but here is one good answer. A business is something that satisfies the customer’s needs, its owner’s needs and is sustainable, with or without the owner’s direct involvement. This book is about helping you create such an entity.

Many people make a good living from doing what they enjoy. That’s just fine. But is it a business? If you are already up and running, ask yourself the following. Can you have a long deserved vacation without your income falling? Can you work to hours of your choice to keep it alive or does it demand more? Will you still earn money when you are sick or, heaven forbid, run over? Can you sustain the level of income you really need into retirement? Could you sell it?

If the answers to the above are a resounding ‘No’ then you need to read this book. You are probably making money and serving your customers well, which is to be commended but you may be missing out on the most precious jewel and well-deserved reward, a saleable asset - a pension for when you can no longer sustain your enthusiasm and effort.

So what are the desirable characteristics of a business? It should:

 Provide value - a product or service that your target customer needs and is considered to be of value, else it is pointless,

 not merely involve you and your time,

 become a financial asset. In the future somebody will want to buy it,

 conform with your jurisdiction’s company law, commercial and tax laws,

 be scalable; it is capable of profitable growth without breaking,

 be sustainable; it isn’t a fluke of short-term conditions or resources, environmental, legal or other economic driver that will fizzle out or become outlawed,

 provide a competitive return to shareholders, the people who risk their money investing in your business (probably includes you),

 and be inclusive; rewards, nurtures and sustains all stakeholders.

If you have a business now and it does not do all the above then you have some work to do. Ask yourself this simple question? Could I sell it to somebody, using a lawyer, thus testing legality, to exchange terms without any problem?

A business then, must first be capable of delivering perceived value to fulfil a need.

Ideas are Free

We know what makes a good business but what constitutes a good idea? It is a common mistake to assume your idea needs to be somehow ground-breaking, innovative or just cheaper than the competition.

What is the well-trodden path? How can you increase your chances of success? To get you started, let’s consider from where you might draw inspiration.

Buy a franchise of something, anything you know you can do. It is a great way to learn how to run a business properly and a good start in your new career as a business owner.

If you are already running a successful one-person business and you have sufficient income, happy customers and a growing market, consider growing it into a valuable asset. This book will help you think in a more structured way so you can achieve that.

Buy a business from somebody else. This is tricky unless you really know what you are doing, so not for beginners but in many cases it is quicker to recover or takeover a turn-key business (if you know what you are doing) than start a new one. Perhaps something for the future though.

If you have a real talent for something that others appreciate, it could be a good basis for starting a business. The idea needs to be tested on a wider audience.

The majority of new businesses are simply copies or more often, step improvements of another. Sometimes the owners don’t even improve it, they just ‘spin’ it differently. Good marketing can be transformational but you must be able to deliver on the resulting demand.

There is nothing wrong with copying. It is a free market and competition is a good thing. It keeps people on their toes, keeps prices fair and customers generally benefit. So don’t feel cheated when somebody else starts a copy of your business - take it as a compliment but be careful to protect your intellectual property (IP) as we discuss later.

A Franchise is the ultimate copy, you have a great head-start because all of the operational detail and much of the sales and marketing is predefined for you. Trust us, that is worth paying for, as you will find out.

biz-wisdom: Steer clear of saturated ‘price-war’ markets. They can be very destructive and small businesses or lesser funded companies most often lose in that game. Same applies to ‘get rich quick’ schemes that arrive in your in-box. It is important to be in control, so test your idea for yourself.

In general, the key to ‘cloning’ another business is to experience as many of your competition as possible. Become a customer and test out their customer service and sales skills. Most importantly, use their product or service. Analyse their business model, work out what they do and why, how they sell it and how they deliver it. Work out how you can improve upon this. Once you are in business this can become instinctive and addictive. You will find yourself analysing every company you buy from and those you don’t.

If you are risk averse, inventive and creative, why not innovate? Innovation is the most exciting, ‘buzzy’ human endeavour. It drives the economic and social progress of Homo Sapiens.

What is ‘innovation’? One answer is that innovation involves disruptive change in an industry, sector, product or service. This is powerful ‘medicine’ - it can take down giants! It involves looking at a market in a completely different way. It may be a new enabling technology or a supply chain, distribution, sales or marketing concept. Whatever the ‘big idea’, it disrupts the way your competitors do business or creates a whole new market or both.

There are famous recent examples in the field of mobile technology and music in particular. If you want to learn about innovation and disruptive behaviour then we recommend reading the biographies of the key players. These are the kind of ideas we don’t talk so openly about because they have such enormous potential value, so contact us if you wish to partner up on something and we will do it properly and ensure that you protect your intellectual property first.

Often the best new ideas come when we are just ‘living’. Very Zen but actually the best way to do this is to travel wide and frequently and look for things that don’t exist in your home country. Also for things that can be imported or exported, things that simply haven’t been thought of at home or wherever your target market is.

Migrating conventional services to the internet is very profitable if you get it right. There is a big structural shift occurring right now with many people doing this. You will have experienced this for yourself, no doubt. This demonstrates the real value of the internet - it was never about websites, rather services of convenience and potentially global reach. That is why not all businesses benefit from a web presence but people sell them one anyway.

Nature provides great inspiration for new business ideas and certainly technologies. Look at nature, how it solves problems. There are many examples of products that have sprung to mind whilst sitting on a park bench observing wildlife. Look at how nature interacts if you want services or how it works if you want technology products. Learn from nature, it has been innovating far longer than us.

Problem solving is often a good source for a new business idea. The world is full of people suffering and having problems. Observe the deficits in your own comfort, your everyday private and business life. What could help?

Target a specific type of person, business or social group that you have an affinity with and ask them what they need? What are their unsolved problems? What would be their ideal service or product?

biz-wisdom: Remember, ideas are free. It is the enormous energy, passion, hard graft, money, risk and stress it takes to execute that contribute to success. Unless your idea is world-disruptively innovative, share your idea with other people. Don’t fear them stealing it, the real skill is in the execution of the idea; they can’t steal that from you. We are here to help you execute your idea and transform it into a living profitable and valuable asset.