Whatever the circumstances that have brought you to this point, the first question you need to ask yourself is, "Is owning a business right for me?" Are you cut out for entrepreneurship? Not everybody is. The rewards can be great, but so are the risks. And it will change your lifestyle in ways that you may not be prepared for. If you haven't explored this question yet, take a few minutes to review some of the resources in the Becoming an Entrepreneur section.
Once you've decided to walk the entrepreneurial path, the next question to ask yourself is, "What type of business do I want to start?" There are, of course, thousands of choices. Even things you might think are out of your reach may not be. Short of something like pharmaceuticals that requires enormous research & development budgets, there are virtually no limits: automobile manufacturing, food products, import/export, and many others are open to even the individual entrepreneur. With an infinity of choices, how are you going to decide?
The Traditional Approach
The traditional approach to entrepreneurship is a methodical, scientific process. Generally speaking, the approach consists of researching the market, identifying a need, and creating a business to fill it. More specifically, the steps of the process are:
- Select the industry you're interested in working in.
- Research the kinds of businesses and various business models within that industry.
- Perform market research to see where there is an unmet need -- geographically, pricewise, complementary products and services, etc.
- Analyze the competition.
- Develop a preliminary business plan for a business to meet that need.
- Do some more market research to assess the realistic market potential for your business. Will people buy it?
- Revise the business plan and determine your funding requirements.
- If needed, seek out lenders or investors.
- Start the business.
The other problem is that you may very well end up realizing far too late that you're doing something you really don't want to be doing, just because you figured you could make some decent money at it. Even when you're the boss, you can still end up feeling stuck and unfulfilled.
Do What You Love, and the Money Will Follow
In recent years, this philosophy has become increasingly popular following the success of the book Do What You Love, The Money Will Follow by Marsha Sinetar. While the approach sounds great, as career coach Dr. Marty Nemko puts it, "Millions of people have followed their passion and still haven't earned enough money to even pay back their student loans, let alone make even a bare middle-class living doing what they love."
It's not the book's fault. In fact, it's a very fine book that will take you through a number of exercises to help you discover your true life purpose and find a number of different ways in which you can fulfill that purpose in your work. It will teach you to distinguish the true inner voice from the flash-in-the-pan ideas that constantly run through your head. And maybe it will help you be one of the few to beat the odds and pursue your dream career.
The problem is that most people don't read the book and go through the intensive self-discovery exercises it prescribes. And when it gets boiled down to a mere slogan, it's more likely to become, "Do what you love until you go broke and can't do it any more."
Some of the common scenarios include:
- No one wants to buy it. You're passionate about it, but apparently no one else is. You can't sell people something they don't want to buy.
- Someone else already thought of it. You have a great idea, but it's a niche market, and someone's already beat you to it. And if they're better funded, they may be doing it better/faster/cheaper. (It happened to my first company - a mistake I won't repeat!)
- A lot of people already thought of it. Highly competitive markets are no fun. I don't care how much you love the business you're in, if you're constantly having to go head-to-head with competitors, it will get old very quickly.
- There's more to it than you realized. You underestimated the costs, or the development time, or the incubation period for the marketing to take effect, or the amount of energy required, or the toll it would take on your personal life.