How do you choose the business to be in?

Good question. We are sometimes eying a myriad of opportunities and seeing several avenues we can go down in our search for building our business and not least in our quest to build a solid future.

So sometimes it can be difficult to make the choice.

What’s make it difficult also is that venturing down new roads often entails a level of risk and sometimes of costs.

So here are a few of the factors that I look at when I choose which business opportunity to engage in.

Believe

One of the first criteria is also one of the ultimate criteria and it’s the one of your belief in the proposed business. You have to believe that the business you are considering engaging in is viable and that you can make something of it. That means that you believe in the business and its model in itself, but also that you yourself will be capable of making it a good business for you to be in.

Your capacity in the business may differ from business to business and it is often also much dependent upon your situation.

For most people and most people who are starting up, money is somewhat a scarce resource which often means that your role is often tied in with making a business get started up and running and growing from there without the need of too much money put into it, which then usually means a greater dependency on yourself to make things happen and to make business take place. In other words most people starting up would have to rely on themselves and their time and labor input into the business as well as of course your skills and abilities to make things happen required for that exact business.

Nothing wrong with that and it’s probably how most of us would have to start up. But it is a different situation from someone who would have access to finances and could potentially be in a position of relying on other people, other people’s capacities, time, skills and expertise to go and make things happen.

But ultimately and regardless of what your situation may be, you must believe in the business. If you don’t believe in it, it wouldn’t make sense to go ahead with it and certainly your efforts would probably not be very noticeable either.

Minimize Risk Exposure

Somewhat correlated to your belief of the business you are considering is the need to minimize your risk exposure. I do believe that you have to be willing to accept risks in order to be able to get the potential of enjoying the benefits and rewards that can come of something. Without risks acceptance I don’t see how you could venture into anything and thus you would be standing still exactly at where you are at. So if you are really truly satisfied with where you are at and the level of income you have, the lifestyle that this can support and feel you have a sense of security for your future, well, then probably you would even need to engage yourself in new business ventures.

But if you are like me, you actually do enjoy a continuance of growth for yourself as a person and for the possibilities that lie ahead of you and thus you probably would continue to look at the opportunities to engage yourself in either new businesses or growing which ever business you may be in or indeed both.

Now, your willingness to accept risk may differ highly from my willingness and from that of the person next to you, including your spouse if you have one. But regardless of willingness to accept risks, you always should do some due diligence into the proposed business route you are considering.

So one of the ways of reducing risks that you can focus on, is to focus and concentrate your efforts on something that requires as little capital as possible to get started and to continue.

Low Investment

We actually already touched upon this, but to be clear, I love a business venture that can get started with very little (or at least relatively little) investment and which has the potential of relatively quickly be able to finance itself in the efforts of going forward. And yes, such businesses do exist. Now if indeed you had very amble finances in your war chest, then there might be businesses that could award you even greater returns if you were willing to risk large sums on getting it started. But most of us ultimately have a very finite amount of capital that we can afford investing in our start up, so this is where I will place most of my focus.

In addition, as I have stated elsewhere, I suffered huge losses in the year of 2008 (like most other people) and this curbed my willingness somewhat to go for investment and/or business opportunities that were very expensive to get up and running and it made me even more excited about seeking out the opportunities that could be scaled to noticeable results, but also could be commenced at relatively low investment sums.

Even with access to larger sums of money, I still like such business opportunities.

Low People or Technology Intensity

Businesses and industries differ greatly in the need of the intensity of people, technology, machinery, space and many other factors involved. Businesses that require a lot of machinery or technology often also requires a lot of capital. If the proposed business requires a lot of people, then that may too be capital intensive. However, there are certain circumstances in which a lot of people may not require a lot of capital “up front”, but only as the need would be tied to actual revenues being generated. To illustrate this I can give you the example of the limousine service company I ran in the past. I had to have a few full time staff members to operate the daily chores of the company, especially seeing that I couldn’t be present there myself since I was employed elsewhere. That was a necessary and somewhat costly part of the business. However, alongside the full time staff members I had a lot of free lance employees who were really only engaged when there was a need for them, which in other words was totally coincidental with chargeable revenues being generated. In other words no expenses unless revenues were involved too (and revenues exceeding the expenses naturally).

But there are other considerations to your choice of business type. So for instance, although I enjoy working with people and engaging with people, I must also admit that at times I also find this kind of work to be demanding and to be followed by a lot of extra administration and to be frank, headaches. And I know what I’m talking about. The car rental company I was CEO for had in excess of 200 employees and the limousine service company I ran had at times in excess also of 200 employees. In other words at times, I was ultimately managing in excess of 400 people – and that can be a mouthful.

We are all different, so you might enjoy such types of businesses more than, say, a business that’s very technology intensive or machinery intensive or other. But for me in my personal choices going forth, I rather wish to concentrate my energies on businesses that can become big without excessive need for the employees. Your choices and decisions may well differ.

Scalability

I briefly touch on scalability. I’m an ambitious person and I like the businesses that I engage in to have big potentials. Some people may not hold the same ambitions, which is fine I guess, but I would still encourage that you look for business and opportunities that can grow well in time. Let’s face it, when you eventually make more money, you just might be able to have more fun as the lifestyle of your choice becomes more accessible.

But scalability also refers to the next subject.

Time

How long will it take for you to make something tangible out of the opportunity you are considering? How long before your initial investment is back home safe with you? How long before the business will start to throw off some real results and some real money back at you and how long before you can start living the life of your dreams, even if this means using the money to make others lives better for instance through charitable actions and donations?

I like to see that the opportunity that I’m considering to invest my focus, time, money, effort etc into can commence giving back great results in a foreseeable future. Results beget results. When you are on a roll it just feeds a positive energy and you seem to be able to ride this to even further results and this can be very enjoyable indeed.

If the time frame is too long, it also means that you have to be willing to wait off longer for you to have the lifestyle you dream of. It also means that you will have to believe and not least motivate yourself for a longer period through low result periods which can be a lot more challenging for most people.

Businesses and industries can differ greatly in their abilities for producing real great results. The rewards too can differ greatly too and often there is a certain trade off. Take for instance the pharmaceutical industry. Often new drugs take 10 years or more in development before they even hit the market. That often also is associated with many millions of dollars that have to be invested in the interim to move it forward and then a lot of drugs eventually actually fail at providing the remedy that was hoped for or even possibly fail at getting approved. High risk. However, sometimes they can hit a real jackpot – just think of something like Viagra or certain insulin products to name two examples.

For most people and certainly for me, time is of essence and I like to be able to receive some results in as short a time period as possible.

Track Record

In my due diligence I include several factors, one of them of course looking for a track record. Thus if I’m investing in an opportunity that involves a person or several people, I would look at their past performance and results and make some judgement calls on what I believe they would be able to accomplish going forth with the proposed opportunity. If I’m considering doing something with an established company or product or service, I would search and investigate a bit in the track record till date and also make some judgement as to how the market for it seems to be responding presently which brings me to my next point.

Momentum

Sometimes you can gain a lot even when you come in at a later point in time because now the venture has gained momentum. If you can catch onto a momentum then you can catch a great ride and be off to results in a potentially speedy fashion.

So yes, I’m not saying here’s a Get Rich Quick Scheme, but yes, I would definitely be more enticed about going into an opportunity for which there is a momentum going on and especially if you can deem that that momentum is not going to run dry any time soon.

Do I Like It?

In the end one of your biggest success criteria may indeed be reliant on the fact of you liking the business, the product the service or whatever makes up the opportunity you are working with. If you read many success stories a lot of those who ended up with great monetary success never really set out to become rich, but they were so engaged with what they were doing that they eventually had so much success with it that it brought them great financial rewards. Sometimes I may personally may not necessarily totally love a product that I’m working with, but may really love the business involved with it. Naturally I enjoy every bit of it even more if I love the product, the business and the daily intricacies involved in working with the venture in concern, but you can get good results even if you sometimes have a few minor trade off in the interim. And often these are exactly just that: interim periods. Cause as you progress and great results start to appear you often turn the parts of the equation that you were not too happy about (e.g. a product quality or a level of service or something) into a better and improved version and then can end up loving it all.

Your Why

We have all heard it before. What’s your WHY? Your why will often determine your success? It will be the ultimate factor that will push you even when you get tired or lazy or distracted. If you Why is big enough, your results will become big enough too. We can discuss your Why a lot further in depth, but I will leave that discussion for another time. Fear not if you don’t have a definite why yet, it will come. A lot of you, quite possibly have the Why very solidly already, so make it work for you by propelling you to stick working and progressing that opportunity you decide on pursuing. Then your positive results are sure to find their way too.