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Business is a pretty generic term. You can open a comic book store, consult to Fortune 500 companies, sell lingerie, deliver pizzas, walk dogs, or market information products on the Internet. Or any one of about a million other ideas. So there are a lot of things you can do to go into business.
I’m not interested in that . . . What I do want to talk about is the commonalities that would transcend any and all successful businesses. The things you want to look for when you buy a business, consider if you start a business, and know if you want to manage a profitable business.
And not just make money, however . . .
I believe for you to be successful in a successful business, it should be fun for you. You should want to work hard at something that often doesn’t seem like work.
About a month ago I got a chance to interview Nicholas Hayek, the founder of the Swatch companies, and the man who single-handedly rescued the entire Swiss watch industry. Nicholas is a brash, plain-speaking guy with a sharp mind for marketing, and a true entrepreneur. I’m not sure how old he is, but someone told me he is in his 80’s. Recently he was asked when he would be getting his gold Swatch and retiring. He replied, “Entrepreneurs are artists, and artists never retire.”
I certainly concur with Nicholas. I’m a serial entrepreneur, and I’m always looking for that next thing. I tried retirement when I was 40, and found it most certainly was not for me. I don’t define myself by my work, but my work definitely helps to define me. I’m one of those people who are psychologically unemployable, so the business of business has always held an allure for me.
Hopefully it does for you too. So let’s look at the components that make up a great business:
First off, as I mentioned, I think the business should be rewarding for you. That doesn’t mean it has to save the world, be a noble cause, or be something exotic. Your business might be a dog grooming shop. But if your dream is to build it into a nationwide or international chain, it could qualify.
What I mean by the above is that is gets you excited to get out of bed in the morning. As you get older, you will probably find that you are drawn to businesses that have a deeper meaning. But when you just start out, it need only be something that really gets you excited. Even if that excitement comes from making lots of money. But the real excitement believe it or not, is NOT the money. It’s the challenge of getting it. And that’s ok.
And speaking of making money, let’s look at component number two. Profitability.
There are some businesses that simply are not worth the work for most high level achievers like you. Starting any business takes lots of time, lots of resources, and lots of sweat. It’s not unusual to work 70 hours a week when you launch a business. So why do it for peanuts? The same amount of effort and resources in a different business could bring vastly greater rewards.
I turn down 90% of the deals I get offered for this reason. When they are evaluated against other methods of making money, they come up short. My friend Dale taught me something pretty simple, but pretty profound. He learned the philosophy, “How can we make the most amount of money, with the least amount of effort?”
Not that money is the be-all, end-all. It’s not. But if you are going to pour your life into a venture, why not make it something that can give you the rewards of financial security and a luxurious lifestyle?
A related part of this is whether your business is scalable. A hot dog stand can make you enough to pay the rent. But how big can you ramp it up? I like businesses that can be licensed, franchised or scaled up in other ways.
The next component is related to this. I look for leverage.
J. Paul Getty, one of the wealthiest men the world has ever known understood this well. He’s been quoted as saying, “I would rather have one percent of the efforts of a hundred people, than 100% of my own efforts.”
Leverage is the secret employed by the wealthiest people in the world. Look for a business you can employ this powerful concept. Do the job once and get paid forever.
Garth Brooks makes money every time someone buys one of his CDs, a radio station plays it, or someone buys his song on iTunes. Yet he only had to record the song once.
The stockholders of Disney profit every time Mickey Mouse is used on a t-shirt, mug, or hat. Every time he is used in a movie, cartoon or theme park. His name and image have been licensed so many times it’s astounding.
Do you realize that J.K. Rowling is likely the richest woman that has walked the earth? All she did was write six or eight books. But she has leveraged those books into a franchise.
The reason I love network marketing, real estate, and information marketing is because they allow you to employ the concept of leverage. As you evaluate a new business, or take a good look at your current one, look for the potential to leverage.
The next component to look for and this is a critical one – is the ability of the business to run without you working in it. Business strategist Michael Gerber advises people to work on their business not in it. It’s very sound advice indeed.
When you are immersed in the day-to-day operations of the business, you can rarely see the bigger market picture, conceptualize hot new strategies, or expand your vision of what is possible.
The other big consideration of this is the resale nature of the business. If you have a restaurant, but you are the head chef and work 80 hours a week in the kitchen, you’re going to scare off a lot of potential buyers. They will rightly fear their ability to run the profitability after you are no longer in the picture.
The more you can automate the business, the more lucrative it will be to sell. Or easier to pass on to your kids. Now let’s talk about what may be the most important element of a successful business: Marketability!
The fact that you are the world’s preeminent expert on moth migration does not necessarily mean that you should open a moth migration forecasting business. You have to be brutally honest when you evaluate any business opportunity and ask yourself if there really is a market for what you have to sell.
Most people do the opposite. They decide what they want to sell, then look for people to buy it. Savvy entrepreneurs do just the opposite. Now that raises the old cliché about, “find a need and fill it.”
Sometimes that is good advice, but not always. Usually the better advice is, “find a want and fill it.” That’s because people are often more motivated to get something they want, more than what they need. They need to pay the light bill. But they go to the movies instead.
When you see something that the public really likes and wants to do, have or accomplish, you have the makings of a monster business. The reason for this is that they don’t need to be educated on why they need the product or service, and they don’t need to be “sold”. They see what they want, and they react to get it.
The strategy I recommend for evaluating marketability is this. I look and see if there is a targeted niche. I prefer this over a broad-based product that applies to everyone. Because of the cost necessary to launch a campaign. A niche market is easy to target, and affordable to reach.
Next I look if the market is stable, growing, or decreasing. Obviously the best scenario for you is a market that is expanding. When you can find a tightly-targeted niche that is on the upswing, you have the potential for a very lucrative business.
One last thing. Something that isn’t a component in the marketing sense. But vital in terms of the anatomy of a successful business. People. More specifically, good people.
Every successful business knows the value of having the best people. They hire based on talent, not salary bargains. A successful business is built by successful people. And to get people like that, you have to reward them well. Offer a great benefits package. And keep them stimulated.
That means giving them responsibility, and staying out of their way. You give them the support they need, but you don’t spend all day looking over your shoulder.
A big reason for the success of my business is my assistant Lornette. I often go a month between actually seeing her. The rest of the time we communicate by email and phone. I give her a great deal of responsibility, and she knows what to do with it. She doesn’t need me checking up on everything.
I pay her well, and provide a nice package of benefits. She has lots of projects that stimulate and challenge her. And I let her do her job the way she needs to. Getting and keeping good people is the thing that will really put your business over the top.
Going into business is one of the most rewarding things you can do. The rewards are monetary of course, but a whole lot more. The thrill of being your own boss, the sense of accomplishment, and the growth it will cause in you cannot be found anywhere else.
--RG
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For more than 15 years, Randy Gage has been helping people transform self-limiting beliefs into self-fulfilling breakthroughs to achieve their dreams. Randy Gage is a modern day explorer in the field of body-mind development and personal growth. He is the author of over 40 works including “Accept Your Abundance” and “Prosperity Mind” and the best-selling audio album “Prosperity“ and is director of www.BreakthroughU.com . For more resources and to subscribe to Randy’s free ezine newsletters visit www.RandyGage.com
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CONTACT INFO: Randy is available for background information and interviews. He can be reached through Prime Concepts Group, Inc. at 1-800-946-7804 or (316) 942-1111. Rights to reprint and reproduce this article are granted as long as it includes the full last paragraph tag line complete with web links. For questions about this article contact Alicia Gregg at email agregg@primeconcepts.com or Prime Concepts Group at 316-942-1111.
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