This content originally appeared in the Gwinnett Business Journal.
How to choose the right type of business
Why first-time entrepreneurs should take a good look in the mirror
by Louie Bernstein
December 2008
"Everyone enjoys doing the kind of work for which he is best suited." – Napoleon Hill
What are you good at?
The easiest business to start is in a field where you have expertise. Notice how I said, "easiest"? You are definitely not limited to starting a business where you are the expert or have a new or better way to do something. However, your chances of success are greatly increased if you stick with something you know well.
The most successful investor ever, Warren Buffet, said he only invests in businesses he understands. If this advice is good enough for the "Oracle of Omaha" it should be good enough for you and your business.
More than likely, even if your expertise is in manufacturing a product, you will have to start out selling a service; probably your expertise. You will not have the capital to buy expensive manufacturing equipment. This is not to say you couldn't offer a consulting service related to a particular field where you are an expert on how particular products are manufactured. Unless someone gives the money to rent a facility and buy manufacturing equipment, I am going to assume you do not yet have the money. Moreover, if this is your first business, you do not want to invest in equipment and inventory until you have some measure of success. That could lead to a quick financial catastrophe.
You may learn new skills as your business grows. When I started, I was a mediocre writer and really didn't like writing much. However, writing about your business is an essential skill you must posses. Now, I enjoy writing and supplement my income with sales copywriting.
Nobody will know as much about your business as you. You need to communicate via written word the features and benefits of your product. It's a good idea to have at least one other person review your copy for readability, typos, etc, but you need to be the one to put it down first.
What are you passionate about?
Close your eyes and ask yourself this question: If money were not an issue, and I could do any job I wanted, but I had to work, what would I do? There is a good chance this is what you are passionate about. When you are passionate about something, time and work do not matter. The price you pay in practicing and honing your skill is a labor of love, and time flies by.
You may say, "I am not passionate about anything." I don't buy it. You just might not want to admit out loud or to yourself because it just sounds like a hobby or an interest you have. That's your source for your best ideas. When you have a strong interest in an area, you know it. You read the magazines and journals dedicated to that interest, and you could talk for hours about it. That's passion. It will provide energy and motivation for your business.
I am not saying you have to be passionate to start a business. But it helps. You are going to spend a lot of your waking (and dreaming) hours in your business. It will be much more enjoyable if those hours are spent doing something you like. And if you're good at what you are passionate about, you are way ahead of the game.
Get leverage
This is very important and is really a theme throughout my eBook. I'm assuming you have little money and few personnel resources. You need to use what little of each you have to your biggest advantage. That's leverage.
When I started my business in 1986, I started as a manufacturer's rep. I found a company that wanted to sell their product in a market where I had customers and contacts from my previous employers. I worked out a non-recoverable draw against commission agreement with them to represent their products. It gave me a cushion to start developing other, unique products for my business, while having cash come in.
From the very start look for opportunities to help companies succeed with your expertise and try to set up a medium term agreement (maybe six months) with as much flexibility as possible. This might not be in complete alignment with what you want your business to be eventually. But, it will generate cash quickly. Treat that client right. Give him the attention he deserves; after all, he's paying for it. Do your best to bring them business. They are helping to launch your dreams.
Another area to get leverage is with the internet. Obviously, your website can make you look professional and appear to be a much bigger organization than you really are. But beyond that, there are tons of resources at your fingertips. If you aren't already, you need to become internet savvy. Consider it an important business skill that you need to invest time in.
I don't need to preach the unbelievable advantages the internet has given the small business person. You can find products, services, people, resources and ideas easily. But, it's up to you to learn how to do so quickly - and to translate the things you find into your advantage.
Louie Bernstein is the CEO of MindIQ, a Norcross-based technology company he founded in 1986. He has released a new interactive eBook, "How To Start A Business From Scratch…Without Having Any," which is available at www.sales-getter.com.
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