What’s the business plan? What’s your revenue model? How do you get from point A to Point B? Can you scale this?
These are the questions people used to ask and lenders still probably ask to people audacious enough to start a business. I think they are the wrong questions today.
These are the questions I would ask today, after a lifetime of experience as a business owner and operator.
1) Do you believe in yourself as a business owner? If you cannot answer “yes” and believe in the “yes” you have very little chance, because you are going to get knocked off your pins almost immediately and numerous times after that. If you do not truly believe in yourself, you will be demolished by the first few hits.
2) Are you flexible enough to look at the evidence and switch course? Whatever plan you start with is imperfect. You have to accept that and mutate to accommodate the reality that reveals itself. The market will tell you of you’ve got it right if you can give it a little time and communicate clearly what you are about.
3) Never believe there is only one correct way to do things. There are always lots of ways to do things and many are better than the one you thought was “the only way” to do something. People used to think that the only way to bake a cookie was with wheat flour. Today a whole industry has sprouted around gluten-free baked goods.
Since 1990, Starbucks has defined what a coffee shop is, but in Palo Alto, California, the best coffee I’ve ever tasted is sold at Zombie Runner, a shop catering to marathon runners. People line up and pay premium prices for their amazing coffee and chocolates.
4) Does your idea keep you up at night? If you are not a little nuts and worried about starting something new and pursuing it like a wacko, you probably will not be successful, because somebody else will be crazier and more committed and eat you. This is the downside of entrepreneurship and the books and manuals tend to neglect it. From my experience, the really good deals (and after the really bad ones, too) are the ones that upset your gut, the ones that wake you at 3:00 a.m. to recheck your numbers. The good deals are usually the ones that you think you are overpaying for, or bidding too close for. But you are doing them because you know in your gut there is a way to make it work even if you don’t know what it is at that moment.
5) Starting a business is ridiculously easy but making it successful is incredibly hard. Don’t do it if you want a balanced life, whatever that is. Being an entrepreneur, at least at the beginning, is all about stupid imbalance. You and your loved ones must accept this for a while or you will be miserable with guilt and surrounded by anger. Unfortunately, your loved ones will also be unhappy if after all you put them though the enterprise still ends in failure, which is likely to happen.
Have a nice day.
Question: If you could choose between owning/running a business or being an employee with nice salary in a good work environment, which would you pick?