If you're looking at getting into a new business, first make sure it suits your needs. Here's how.
When asked
their reasons for wanting to strike out on their own and start a business,
people seldom say, "More money." Most of the time I've heard,
"More time with the family," "more flexibility during the
day," or some other unfulfilled quality of life desire.
Granted,
money certainly plays a key role in their making a "go" or "no
go" decision, especially in a slow economy. But becoming an entrepreneur,
whether you're starting from scratch or buying into a franchise or existing business,
requires you to look beyond simple financial returns.
You may
already be earning a good living. But other than making money, maybe you just
can't find another compelling reason to go to work in the morning.
Money alone
is not enough to keep most people fulfilled. I recommend evaluating a business
opportunity against the following five factors to make sure once the newness
wears off, you will still feel content with your decision:
- Is there a financial fit?
Run three financial scenarios – best case, average case (or
best guess) and worst case. Shoot for the best case, but make sure your
decision is based on the average case scenario. Also, make sure you can survive
the worst case. If the house takes your poker chips, make sure you have the
necessary cab fare home.
- Does the job match your personality?
What does the business owner
do each day? Will you find that work meaningful and satisfying? Will you be
good at it? One of the most effective ways to answer these questions is to
contact people you've worked with in the past, and ask for honest opinions.
Past performance reviews can help, too.
- Will you fit in with the culture and environment?
Go out and meet many of the people you will be potentially
working with. If it's a franchise operation, meet the franchisor's leadership
and support staff. If you are acquiring a business, talk to the employees,
customers and vendors. Are these people you can build rock-solid relationships
with, or are they going to suck out your life force through your eyeballs?
- Is there a compelling value proposition?
Make sure you have high belief and confidence in what
you're selling. Does the product or service add more value than it costs? Does
it have staying power in the marketplace, or will it be replaced by something
new? For instance, Indian Online customers once loved the "ebay" shopping
experience. Then Homeshop18 and mydeal came along and offered the same products
at a more affordable cost through more convenient venues. Customers voted with
their products that convenience was more valuable to them than shopping
experience, which eventually led to the demise of hundreds of Online stores.
- Is this calling you to a higher purpose?
I'v consulted for Sudha Ice Cream, which sells much
more than ice cream. The business exists to provide "innovative ways to
improve the quality of life locally, nationally and internationally."
Google seeks to "organize the world's information and make it universally accessible
and useful." Do most successful business people tap into their sense of
purpose? No, but all the fulfilled ones do. You need to look into the future
and ask what makes your feet hit the floor every morning.
Most of all,
I encourage you think beyond the here and now when deciding whether to leap
into a business venture. Think about your legacy. When the time comes to sell
the business or retire, is this going to be something worth being remembered
for?
Manish Kumar
Mansa Venture
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