There are several excellent company ideas available, but how can you choose the best one for you?
It's difficult enough to get the confidence to launch a business, but that's only the beginning. You must now determine what business to start, which is not as simple as doing what appears obvious. For example, a college acquaintance of mine learned how to create websites. When he wanted to establish a business, he reasoned, "I know how to design websites, I guess I'll start a website design business." Others have started specific sorts of enterprises as a pastime, because they heard it was a good way to earn money, or because they were pulled into it by someone else.
Sometimes these decisions work out, but most of the time they don't, which is unfortunate because starting a firm will likely absorb several years of your life. The following questions will help you determine whether you're launching the correct business for you:
What exactly is my goal?
Why do you want to establish your own company? It appears to be an easy question, but if you ask various entrepreneurs, you will receive diverse responses, if you dig deep enough. Most entrepreneurs will claim they want to improve the world or make money, but many use their enterprises as a laboratory to experiment and learn, some are driven by a psychological need, and still others are attempting to satisfy someone else. What inspires you?
Noam T. Wasserman, dean of Yeshiva University's Sy Syms School of Business and former professor of clinical entrepreneurship at the University of Southern California, classified beginning entrepreneurs into two groups depending on their goals in his book, The Founder's Dilemmas. One sort of founder seeks money, while the other seeks power. It's a helpful activity to determine your personality type and how it relates to your other motives.
Will it be profitable?
Too many business owners question, "Will it make money?" They may mean "profit" when they say "money," but it's better to be explicit. Almost any firm will produce money, but without profits, it cannot exist, prosper, or expand. Will your company concept be profitable? How much is it? How quickly? Are you sure this is the proper business for you if you can't answer those questions?
Is demand increasing?
Almost every male in the United States possessed at least one, if not several, formal hats a century ago. Men wore them whenever they went outside, even to work and on dates. Then all the hats vanished, and today you'd be hard-pressed to find a single man wearing anything other than a ball cap, if they're wearing a hat at all. Consider all of the hat makers and merchants who went out of business when hats fell out of favor, not to mention the suppliers of raw materials used to construct hats.
When the internet began to take off in the late 1990s, many entrepreneurs saw the fundamental upheaval this new technology would bring to society and hopped on board. Companies that rely entirely on the internet, such as Alphabet, Meta, and Amazon, are now among the world's largest.
How can you tell whether demand is increasing? Fortunately, the internet equips today's founders with tools to address this issue in ways our forefathers could never have anticipated. "Using search query data, we can detect breakout trends in different markets to identify rising consumer needs so we can meet them with a solution," says Mulenga Agley, CEO of Growthcurve, whose company assists entrepreneurs in identifying and validating new business ideas before assisting them in scaling. Agley claims that Glimpse is used to collect and analyze data from Google Trends, Google's own search trend tracking tool, in order to assist clients "discover trends before they're trending."
"With the rapid advancements in machine learning, this technology will become ever more reliable and is one of the best ways to find new business ideas out there." Agley concludes.
Is it possible for me to succeed?
You may have the tenacity and passion to succeed as an entrepreneur, but do you have the necessary experience, talents, and drive for the exact business you want to start?
"After my first exit, I looked back at the experience running my first company Bikewagon to see what made me tick, and how I added value," says Dale Majors, an investor in many companies and the founder of Venture Anyway, a mastermind group for entrepreneurs. "That experience helped me in my next business to know what problems I wanted to solve, the ones I felt best suited for."
Some lessons can only be learned via experience, but one shortcut is to choose a business you want to operate, then talk to people who run that sort of business and ask them what it takes. The responses you receive may point you in a new direction or cement your idea. You're in a lot better position in any case.
Do I have the proper people on my team?
When a venture capitalist is sold a concept, one of the first things they'll ask is, "Who's on your team, and have they done this before?" A VC's objective is to maximize profits while minimizing risk, and a team that has done it before has a strong chance of doing it again.
Whether you want to seek funds or not, you should ask yourself, "Who's on my team, and are they the right team to bring my vision to reality?" One red sign to look out for is team members who have never founded or ran a business, much alone the type of firm you intend to create. Another red flag is when a co-founder demands a wage comparable to that of an established firm. Another example is the co-founder who lacks instantly valuable abilities that are crucial to the firm.
There are too many warning signals to mention them all, but if you evaluate just a few of them, you'll be better off than the entrepreneur who doesn't think twice and hires co-founders because they're pals or appear "smart."
Starting a new business is difficult, but it can also be rewarding. To improve your odds, don't be afraid to ask yourself difficult questions. The most difficult questions to answer may hold the secret to your success.
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