I got a message this morning from a guy in London who wanted my advice on setting up a peer-to-peer taxi service to rival Uber and Lyft. He reckoned he had a USP, but I was already walking away from this assignment.
I explained that he’d broken one of the basic rules of goal-setting. The one about reality.
Uber raised over $12bn to get where they are, Lyft around $2bn so far. My loner in his home office might manage that, but chances are he won’t. Ever.
Of course, he also might win the lottery. All he has to do is buy a ticket, right?
I like to be brutally honest with my clients. More to redirect than demoralize of course, so here are 5 ways to test if your well-meaning idea might never create a successful business.
Reason 1: Barriers to entry
Many industries require big investment in machinery, technology and people just to get started. That’s a barrier to entry if you’ve got limited access to funds.
Other barriers could be the need to obtain licences, authorisation or qualifications before you’re able to trade. The most common barrier though, is the cost of being heard.
Do you have a viable route to market at a price you can afford?
If you don’t, then find a different idea.
Reason 2: Misaligned skills
You’re an accounts assistant looking to escape the grind of the company you’re working for. Setting up your own bookkeeping firm might be a realistic goal.
On the other hand, deciding to launch a children’s nursery just because you have a child of your own isn’t an indicator of success by itself. Learning ABOUT your business whilst also learning how to run it might just be a stretch too far.
Think “I am able to do this” rather than a loose “I would like to do this”.
Reason 3: Poor goal-setting
It’s been said many times, many ways that goals need to be specific, measurable and realistic. Beyond that, your goals need to inspire you.
Goals are not just about numbers. You have to really WANT to achieve them. You have to live and breathe your goals. Missing them has to feel like dying.
Can you quantify goals that mean the world to you?
Reason 4: Me-too!
It’s tempting and even inspiring to look at a successful business and think “I could do that”. Maybe you could, but here’s the news: they already did it.
The market for anything can only take a certain supply before it’s saturated. New entrants then face an uphill struggle to be heard, and a downhill race to the bottom as they attempt to compete on price.
Try this instead: do something new and better.
Reason 5: No market
I had a friend who had a hunch. Actually, more an itch he had to scratch.
Based on his experience of fixing his mother’s washing machine (and thereby saving her the perceived cost of replacement), he reckoned he could start his own domestic appliance repair business.
He had a van and some tools, right?
Wrong. Nobody fixes their white goods anymore, as he found out too late.
Cost of replacement is low, products are generally reliable and extended warranties abound. As the TV Dragons might say: Congratulations, you’ve found a solution to a problem that doesn’t exist!
Don’t waste your precious life trying to polish a poo.
Every successful business starts with a great idea.
Find yours, and connect to it.
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Author: Jonny Cooper
I’m a lifelong entrepreneur, having launched over 20 businesses and been involved in hundreds more as a coach and mentor. I built a financial empire from zero to eight figures, before selling in 2003 to a stock-market listed corporation. Now a full-time educator, I am creating a membership platform for extraordinary success called The Success Party.