Step One: Don't go with your First Business Idea Until You Read this Blog.
Step Two: Read this Blog.
Imagine yourself like Caine, the dude from Kung Fu, wandering the earth with nothing more than your walking stick and your Kung Fu fighting skills. Imagine that you’d spent decades of your life with that walking stick, carving it, polishing it, sleeping beside it in your bedroll. How would it be if you had screwed up and picked a crappy piece of rotten pine, or a termite-infested chunk of alder? What would it be like to have a “soulmate” walking stick that was a piece of junk?
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You’ll want to put adequate care into picking your business, but at the same time, you don’t want to spend months agonizing over the decision. You want to get that baby launched. Fair enough. Here’s the quickest, most reliable method I know to winnow down your options and pick the best possible micro-business adventure.
ALERT: IF YOU ALREADY HAVE A BUSINESS IN MIND OR IF YOU’VE ALREADY CHOSEN A BUSINESS, YOU MAY BE LOVE-BLIND! TAKE A SECOND LOOK BEFORE YOU GET TOO FAR DOWN THE ROAD WITH YOUR BRAIN-CHILD.
If you already have a business idea, you probably love that idea. As you already know, once you fall in love, your brain turns to mush. You’re going to need your brain to get you through this decision-making process. Mush won’t help.
Play hard-to-get. Pretend you don’t love the idea. Turn your back on it, just a little. Just for a short while. While you’re playing hard-to-get, create a list of nine other, promising micro-businesses that you could pursue.
Top Ten List
The process of picking the right business will be carried along by a simple tool called the “Top Ten List.” As the cleverly-crafted name implies, you’ll be writing a list of ten favorite business options, then you’ll bust that list down to a Top Three and then down to Number One.
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Put all your favorites on the list, including your one, true love, but don’t choose a business until you’ve filled the list with ten good possibilities and you run that list through the Business Rate-o-matic and you pass the list by your Braintrust of friends and family. If you want to get an “A” in objectivity, you’ll put your favorite business idea not in the number one slot, but in the number five slot. Fill the list with other ideas, but remember that you’re probably love-blind every time you gaze at your favorite idea.
If you haven’t a clue what kind of business you’d like to launch, that’s great news! Starting from zero will vastly increase your powers of objectivity.
Keeping hammering at your Top Ten List until you’re convinced that you have ten, solid business ideas and that every one of them could be a winner. If you’re struggling to fill the Top Ten List with ten legitimate opportunities, here are a few things you can do to fill out a stellar list:
Get Clear on What You Know
While it’s not always the best idea to start a business based on a hobby, you should probably start a business in an area that’s familiar to you. If you don’t have any experience in precious gems, then going into the jewelry business would be a bad move. One of the greatest business investors of all time, Warren Buffet, counsels investors to invest in what they know. Each person has a “circle of competence” that includes a few industries that are familiar to that person. Those industries are good places to start investing money. The same applies to those who would like to invest their time and money in a micro-business. Invest in what you know.
If you know real estate, that might be a good place to start. If you’ve been working as an HVAC repairman, perhaps HVAC might be a good market to look at first. If you’ve been a motorcycle rider for the last ten years, then maybe a business that sells used Harley parts would be a good option for you.
As you write your Top Ten List, keep going back to the stuff that you’re already good at and knowledgeable about.
Grow your IQ
This is a big decision, and let’s face it, you’re not smart enough to make it. You’re going to spend the next so-many years of your life on this business so you need to be really smart about choosing the right thing. And, you’re just not smart enough. Don’t feel bad or get offended because I’m not smart enough either, and I’m writing the blog.
You’re going to need to grow your brain. You’ll have to get much, much smarter and twice as creative.
No problem. All you need are some friends and some listening skills.
If you’re a true brainiac – a statistical genius – your IQ will be somewhere in the neighborhood of 140. If you’re more average, your IQ will fall between 90 and 120. Einstein’s IQ was 163.
In order to choose your ideal micro-business, you’re going to need to gather all the smarts possible – all of the IQ points you can get your arms around. Of course, your IQ and mine don’t vary much with education or mental exercise. There’s not much we can do to crank up our actual, personal IQ.
But we can amass more IQ if we add the IQs of other people around us. For example, in ideal circumstances, if we put ten people in a room and came up with a collective IQ of 1,000 or more wouldn’t we be tons smarter than just you or me? It isn’t quite that simple, but the basic idea works. In the right environment you can grow your practical IQ by adding up the intelligence, the life experience and the perspectives of the people around you. Thing is, most of us never do that. We rarely ask, much less listen to other peoples’ opinions. Gathering input is something that most people avoid and that’s crazy because input is like adding FREE IQ POINTS to your own cranium! What could be cooler than that?
If you’d like to know more about how to gather smarts in ways that work wonders, check out my free primer on “Braintrusting” by clicking here.
Hire US!!
Another way to fill out an awesome Top Ten List is to pay me money! Among other things, I offer a spectacular coaching service for micro-businesspeople who want to increase their chances of micro-biz success. You can check it out at www.microbusinessfanatic.com and, hopefully, you’ll love what I’m doing and you’ll pay me some money to help you make lots more money. But that’s up to you. There are four mind-blowingly-cool services I offer that can be of critical assistance in picking your Top Ten:
Go Fishing in Strange Waters
Perhaps the last step in writing up your Top Ten List should be to go fishing. Go fishing for ideas in places you would’ve never thought to fish. Go online and check out all the business ideas that make it onto the show Shark Tank, or find a list of all of the challenges Donald Trump has given in every episode of The Apprentice. Look in the newspaper for interesting concepts, especially in the business section. Grab a copy of Inc. Magazine or Entrepreneur Magazine and see what they’re talking about this month. Yes, these are all dyed-in-the-wool purveyors of the Cult of Entrepreneurialism, but that doesn’t mean that you won’t find great ideas in their sullied pages.
Go back to industries that you already know and ask yourself questions like:
“If I had to redesign this whole industry from scratch, what would I do differently?’
“What’s the craziest thing I’ve ever seen anyone do in this industry and could I actually make that crazy idea work?”
“What’s the most boring aspect of going into business in this industry? What could I do to make it outrageously exciting?”
“What’s something that has to be done that nobody likes doing? How could I do that thing with excellence?”
“Has technology changed, somehow, in this industry? How can I blow the doors off the thing with technology?”
“How can the internet or social media be used to sink the biggest player in that market?”
Look for ideas in places where you might never have looked before and ask yourself off-the-wall questions. Your answers might surprise you.
Business Rate-o-matic
At this point, you should have your Top Ten List completed. When you look at your list, you should see ten, solid business ideas staring back at you. Make sure your final list is written neatly on one sheet of lined paper or typed on a single piece of paper. Look around the house and find a black, red and green pen before you sit down to do this exercise. Grab your Top Ten List and follow the steps below.
2. Which of the businesses on your list seem SEXY to you? “Sexy” means that they sound like a lot of fun. Of course, business is ALL fun, but these “sexy” industries would sound like fun to pretty much anyone. For example, if you are a roller-blader, then you may have placed “rollerblade sales” on your list of businesses that are familiar to you. At the same time, a business in rollerblading is relatively sexy – lots of people love rollerblading. That makes it a “sexy” business. However, sexy isn’t always a good thing. A sexy industry usually means a competitive industry. So, if any of the industries on your list are “sexy” then you should also underline them with the red pen. If a listing is already underlined once with the red pen because it was flooded, underline it again because now it’s not only flooded, it’s sexy. Here are a few examples of sexy businesses:
3. Which of the business ecosystems require a lot of investment money? Many businesses are great, but they require a bunch of money to get started. In these industries, you won’t have an idea of how good your concept is until you’ve sunk a bunch of cash into it. Starting a restaurant may sound intriguing, but you can’t just start a restaurant out of your home (or can you?) Starting a brick and mortar restaurant would cost big bucks and entail significant risk. You’re starting a micro-business. You can always convert it into a macro-business later if the micro-business thrives. I’m not a big fan of micro-businesses that require a lot of capital. If one or more businesses on your list require a lot of investment, circle each one that does with the red marker. Here are a few examples of capital-intensive businesses:
4. Which of the business ecosystems is MATURE? In other words, which industries have reached a point where only big players are doing much business? When a business ecosystem is fully matured, then there’s not usually a lot of opportunity for new players, unless the new players can take advantage of some critical mistakes being made by the big guys. For example, it was once a really good idea to jump into the cell phone business. Now, opening a new cell phone store would be a losing proposition because cell phones have become a commodity, they’re everywhere and cell phone stores are mostly owned by big business. That means entrepreneurs have to compete against giant companies selling basically the same thing. If one or more of your businesses listed above is MATURE, then circle the industry with your red pen. If the industry is already circled in red, circle it again. Here are a few examples of MATURE business areas:
5. Which of the business areas seem OPEN to you? In other words, which industries on your list don’t seem overly crowded? Perhaps there are a number of businesses in that area, but they seem to be leaving business on the table. When you or your friends think about that industry, you realize that it’s pretty hard to find someone good to serve you – or to find products that fit your need. These would be OPEN business areas. Go ahead and underline, with your green pen, any of the industries on your list that seem open to you. Here are a few examples. Again, these vary from location to location and change over time:
6. Which of the businesses on your list seem UGLY to you? In other words, which of the industries seem unattractive to the average person. Nobody ever dreamed about being a furniture repairman when they were a kid. If you were to tell ten friends that you’re starting a furniture repair business, probably none of them would clap their hands and say, “That sounds like fun!” But ugly businesses are beautiful when you factor in profitability. Most people avoid ugly businesses and ugly industries because, well. . . because they’re ugly. That means that some very attractive opportunities are hidden in ugly businesses. So, if one or more of your ideas on your list are UGLY, then underline them with your green pen.
7. Which of the businesses on your list can be done on a shoestring budget? In other words, which ideas on your list can be started, and maybe fully launched, with very little out-of-pocket investment? For example, it doesn’t cost much to start a business where you spray-paint house numbers on peoples’ curbs. You buy a can of white spray paint. You buy a can of black spray paint. You buy a set of stencils. Then you start knocking on doors. About $20 into this business and you’re making money. If one or more of the businesses you’re looking at is easy to get into without a bunch of investment money, then circle those businesses with your green pen.
8. Which of the businesses on you’re accompanied by an extraordinary marketing plan? You may have a good-sounding product or service, but do you have four or five spectacular ways to market that product or service? If you’re counting on advertising in the paper or making a radio spot, you’re going to have a rude awakening. You’ll need to be far more clever than that to successfully advertise your business, even if it’s the greatest thing in the world. If you have some really clever ideas of how to market the business, then put a big green star next to it. If you have some PROVEN, clever marketing ideas, put TWO green stars next to the business.
9. Turn to the Eight Myths of Entrepreneurialism (http://www.microbusinessfanatic.com/) and consider whether any of the myths played a role in your choosing that business idea. If you go down the list and you have something like “Invent a Glove Box Vacuum Cleaner,” then you’re deep in the territory described in Myth Number Two, about invention being the path to riches. If any of your ideas relate to one of the Eight Myths, you may want to downgrade those ideas. Take your red pen again and put a red “X” through any business idea that was founded, to one degree or another, on a Micro-business myth.
10. Finally, you should have a list of ten business ideas and they should be marked-up. Some will have lots of red. Some will have lots of green. Some will have both. Just glance over the list and see where there is more green than red. Are some business ideas looking more promising than others?
Distilling your Top Ten down to your Top Three
Of course, I have ulterior motives for saying this – because I’d love for you to hire me– but this is a really good time to enlist the help of a business coach. If you already have a great business coach, great. But if you’re out there looking for your business soulmate, I have the greatest coaches imaginable standing by. Again: www.microbusinessfanatic.com.
In any case, you need a couple sets of eyes to look over your marked-up Top Ten List. You need to truly see where your holes, and your best opportunities lie. Unless you have a sterling reason to ignore some of the red and green markings, choosing your top three should be a matter of promoting the three “greenest” ideas.
It’s rarely that simple, which is why you need a couple of sets of eyes on this part of the process. Find a good coach, or two, sit down, and discuss each idea. Start crossing off the obvious losers with the black pen. Keep talking and crossing off ideas until you get down to three. This process should take at least an hour. I’d be concerned if I did this process and it went lickety-split. Invest a little time.
There’s the possibility that ALL of your Top Ten List are dogs. It happens. Other than collecting smart opinions, following the Business Rate-o-matic and using a coach, I’m not sure how to ensure against it. If you have a sneaking suspicion that they’re all dogs, start over, Young Grasshopper.
Choosing your Number One Business Idea
Now that you have your Top Three List, it’s time to turn to a dozen friends and family (your “Braintrust.” For more on your Braintrust, visit http://www.microbusinessfanatic.com/ ) They’re going to help you find the best, single business within the Top Three. You may wonder why you didn’t use them to reduce your Top Ten down to your Top Three. It’s been my experience that choosing from so many options is hard on a Braintrust. Your typical Braintrust has such a wide variety of opinions on any given topic, that trying to take a list of ten down to a list of three takes either really good technology or way too much time. If you have the technology and you have a really gung-ho Braintrust, by all means, have them vote on your Top Ten. Beware, though: your Braintrust members probably haven’t read this book and they might get suckered into one or more of the Eight Myths (http://www.microbusinessfanatic.com/.)
Now that you’ve already accounted for the Eight Myths and for other factors such as a flooded market, a mature market, the ugliness of the business and starting on a shoestring budget, it’s a good time to deal in your Braintrust. Let’s say that you’ll be conducting your Braintrusting exercise via email. That’s a good approach because you can phrase your questions carefully and remove your personal bias. Your email can go something like this:
“Dear Friends,
I’m embarking on a new adventure in my life by starting a very small business. I’m keeping my day job, but I’m also interested in adding to my monthly income by moonlighting in my own business. Of course, it’s tough to choose what business will be the best, so I’m asking for your opinion. I hope you don’t mind giving me a little advice. I’ll tell you a bit about each of my three favorite business opportunities below, and I’m wondering if you’ll be so kind as to give me your opinion about the ideas. I’ll ask you about how each business rates, in your mind, in three ways. Thank you so much for helping me make this decision!”
Then, describe each of the three businesses as follows:
Business #1 (don’t supply a name. The name can create a bias.)
Quick description of business (what the business will do)
________________________________________________________________________
Quick description of how the business might be marketed
An idea of how much you might need to invest in the business
Thoughts about who your potential customers will be
How and how much you’re thinking you can charge
How much per month you think you can probably make with this business
Questions:
1. On a scale of one-to-ten, with one being “not at all interested” and ten being “extremely interested,” how interested do you think my potential customers will be in buying my product or service?
___________
2. On a scale of one-to-ten, with one being “not at all likely” and ten being “extremely likely,” how likely do you think it is that my marketing ideas will work?
___________
3. On a scale of one-to-ten, with one being “not at all likely” and ten being “extremely likely,” how likely do you think it’ll be for me to succeed in making the kind of money I’m hoping to make in this business?
___________
4. Any additional comments you would like to make about this business idea would be greatly appreciated.
_______________________________________________________________________
None of these sample questions are set-in-stone, but you get the idea. You ask a dozen or so of your friends and family – your Braintrust – for their opinions as to the likelihood of success of each micro-business idea. Don’t be surprised if you get more negative reaction than you had anticipated. After you try enough of these Braintrusting exercises, you’ll notice that people are much more critical of ideas than you originally imagined. That’s good. You don’t need to score high marks on your ideas. You just need to get a picture of which idea is better than the others. Don’t freak out if your favorite idea doesn’t score straight tens. Unless you’ve biased the Braintrusting process, there’s almost NO CHANCE that everyone will fall in love with what you consider to be your best idea.
It’s hard to tell if ALL your ideas stink. Again, people are usually pretty tough when it comes to giving their opinions and even good ideas will get trashed by some people. If you’re concerned because all of the scores are low (below a “6” average), then you may want to start over and come up with another Top Ten List that you can then break down to your Top Three and so on. Consult your coach for further advice if you’re concerned.
Here’s the beauty of it: you don’t need, or want, your Braintrust to agree on anything. It’s better if they all disagree and if you’re able to balance their opinions against one another. That’s why you use a numerical system of voting – from one-to-ten -- to wash out the personalities and get down to data.
Once you have all your answers, add up the total “score” to each question and divide that score by the number of people that answered. This will give you your average score. The average score is a fairly true measure of each business idea.
Don’t bother averaging all three questions about a single business. Keep them separate so that you can see the areas in which each business idea is weak and the areas in which each business idea is strong.
The comments are a little more challenging to digest. They can’t be scored and they can’t be measured against other peoples’ comments. They may give you good insight and great ideas, but you shouldn’t rely on the comments to make or break a business idea. Comments are just too hard to weigh. Someone might give you a really negative comment, or someone might give you a really positive comment, but you have no way of measuring those against the Braintrust’s full opinion, so it’s hard to factor the comments into your decision. They’re interesting, but not definitive.
Finally, as you look at your scores, you should be able to see a winner between the Top Three. Again, don’t feel troubled if some of your Braintrust absolutely hates your leading micro-business idea. You should never expect your Braintrust to agree on anything. But the numbers should show a solid front-runner. When you can see the front-runner, then you have your micro-business.
Rock and Roll
Now it’s time to stop messing around and get your business launched.
Don’t forget, though, that you’re the one who’s going to have to eat, sleep and drink this thing for a long time. It’s your Kung Fu walking stick. In the end, it’s your opinion that counts the most. You're on safer ground going with the Braintrust’s opinion, but you have to be happy with the choice too. If you’re not happy with the Braintrust’s pick, repeat the process. It won’t kill you to do this three or four times, if it means making the right pick. Just don’t spend more than a couple weeks hammering at this. This process can easily turn into a misguided attempt at procrastination.
Check in with your gut. Don’t over-analyze once you have your pick. Some part of you might be scared-to-death. Another part of you might be brimming over with excitement. This is a moment where you’re going to need to harvest a bumper crop of honesty with yourself: is this the business? If so, it’s time to rock and roll.{jcomments on}
