What is a wannabee? For today’s discussion, it is a budding entrepreneur, someone who wants to be their own boss but is confused about this whole “business thing”. It seems that it must be simple to run a business because they know some pretty dumb people that also seem to be successful. What an enigma.
The Business Prism
Let’s look at a business through a business prism. When light passes through a prism it splits the light up into primary colors. Let’s see if we can use a prism analogy to find some of the primary elements of a business you need to understand.
Rule 1. Business is selling.
A business sells something. If you aren’t willing to sell, forget it.
Rule 2. Your time is an expendable asset.
A business can only sell two things, a product or a service. If you want to sell a product, your success depends upon (1) the difference between the cost of manufacturing or buying the product, and (2) the price you get when you sell it and how many sales you make. A service is “work performed by you for someone else”. Your time is your most important asset, but it is also an expendable asset. If you don’t sell your time it is lost forever.
Rule 3. A competitive marketplace requires knowledge, judgment, and an efficient organization.
Buying and reselling a product is a pretty simple idea. Doing it in a very competitive marketplace requires knowledge, judgment, and an efficient organization. If this is your choice then there are established ways to assess whether you have the knowledge, drive and funds to be successful. If you don’t have all of these ingredients, then you must be willing to do whatever is necessary to acquire them.
Rule 4. Selling a service usually requires you have a skill that businesses or consumers need.
Once again, you will have to compete with all of the other vendors already providing these services. Competition means you must be more effective than some of those people you believe are not too sharp. Watch out! You may learn a serious lesson here.
Rule 5. Look for opportunities to generate profits.
You could start a business that sells both products and services. Now you have compounded the complexity of your business. But perhaps you gave yourself a chance to generate more profitable sales.
Rule 6. Let SCORE Mentors help layout the learning curve.
Don’t dive into a business and put your personal assets at risk unnecessarily. Let SCORE Mentors help you layout the learning curve for your idea and then guide you to the point that you can make a sound risk analysis about starting the business. You can do all of this without spending a dime. That makes you a smart person and you have graduated from a wannabee to an early stage entrepreneur. Congratulations!