I’ve heard a ton of business ideas. I’ve listened to and read many business plans. And the one thing that always strikes me is how little most people think about the viability, profitability and end goals of their small business. Is the goal to become a millionaire? Is the goal to just make a living? Is the goal to just do something fun?
Perhaps this explains why in just the past year alone, I’ve seen many brick and mortar businesses open up their doors only to close down just a short while later. Perhaps this is why I know of several acquaintances who are in limbo with their business. They don’t make much profit yet they are literally working their butts off for the equivalent of minimum wage.
Granted, a lot of this might have to do with the current economy and the fact that people aren’t spending as much money but more realistically, the problem is probably fundamental. Either the market is not there or the business idea is just too costly to implement. So how do you avoid creating a dead end business? How do you create a business that meets your own personal goals? Not everyone is out there trying to make a billion dollars. How much business is going to satisfy your needs?
Think About Profitability First And Foremost
The single most important factor leading to the success of any business is profitability. You have to focus your planning on how you are going to make money. Duh! Seems like a really obvious concept but you would be surprised at how many people decide to throw up a business just for the heck of it.
For example, a go-kart racing place near my place of work closed down within a year of opening. And I’m sure the guys who decided to start it were thinking to themselves, “Wouldn’t it be cool to run a go kart racing track?”
But I’ll bet that once they opened, they quickly realized that the amount of business couldn’t support all of the overhead of maintaining the gokarts, the racetrack and a full staff of people. And it was probably too late at that point because they spent a whole wad of cash on the facility already.
Just because you think that something is cool doesn’t mean you should start a business around it. Just because no one else has implemented your business idea doesn’t mean it’s going to be successful. Chances are that if you don’t have competitors, your target market is not that large to begin with.
The only way to know for sure is to do research and do some testing. Thanks to the internet, performing experiments is relatively easy to do. If you want to sell something, throw it up on Ebay or a similar website first. Want to know what people are looking for? Use Google’s keyword search tool. Whatever you decide to do, just make sure that your business is viable first.
How Much Do You Want To Make?
The second question that most people forget to ask themselves is how much they want to make in order to be happy. And you’d be surprised by how many business owners have no idea what this number is. Do you want to make six figures a year? Do you want to make millions? Billions?
Knowing how much you want is important in order to set your expectations. If you throw up a business without an end profit goal, you could be in for a world of hurt when it comes time to make key decisions regarding how to spend your time and money.
For example, with our wedding linens business, we have no intention of turning it into some multi-million dollar business. Obviously, if it happens, then that’s fine with us but all of our decisions are based on making a solid mid six figure a year salary.
Our goal is not to make millions of dollars. Instead, I want my family to just be comfortable. I want my wife to stay at home and spend most of her time playing and raising our kids and not on running and overseeing a business.
Knowing our goals allows us to make decisions more efficiently. Now that we’re pretty close to where we want to be, we can turn down extra business and pain in the butt customers without flinching. After all, why should we waste our time dealing with people that we don’t enjoy dealing with? Why should we waste precious time and energy on customers that aren’t inline with our business goals?
If you are having problems figuring out your “number” or the amount of money you want to make with your business, then consider this. Your magic number or profit goal should be the amount of money in which you can comfortably say “F&!^ off” to your customers. It’s really that simple.
Just Working Hard Is Not Going To Cut It
You’ve probably heard this one before but just working hard is not going to get you anywhere. You have to spend your time where you think you can make the most impact.
Let’s face it. There are only 24 hours in a day and there’s only so much you can juggle at once. If you can’t accomplish everything on your plate, then you need to work smarter. Leverage automation and computers. Learn how to do some basic programming. Don’t be afraid. Suck it up and learn or find someone to help you.
I remember one time my wife had to take on a double role at her former employer because someone had abruptly left the company. Instead of working twice as hard to fill two jobs, she noticed that much of work of the former employee was extremely manual and repetitive.
Despite a tight deadline, she decided to invest her time writing a series of small scripts to automate the task. In the end, they decided not to hire anyone to replace the former employee because my wife’s scripts pretty much automated his job.
Whatever you choose to pursue, make sure you leverage the web for your business! Your server is always on and you can automate many things if you take the time to learn. Your computer server is like an employee that works 24/7. Do I sound like a broken record yet? Don’t be afraid of technology or you are going to fail!
Running your business is all about balance and being true to yourself. If you just want to start a business for fun, then focus on having fun. But if your primary goal is to make money, then profitability should be the top priority. Knowing what you want to get out of your business will reduce stress and make it an enjoyable and rewarding experience.
- Entrepreneurship Doesn’t Have To Be About The Next Big Thing
- Starting A Business: Convincing Yourself To Take Action And The Key To Behavioral Change
- Dropshipping Vs Carrying Inventory – An Inside Look At The Financials Of Two Live Online Shops
- How Much It Costs To Start An Online Store And Should I Dropship Or Carry Inventory
- How Long Does It Take To Make Good Money With An Online Business?
Have you read these?
- Why Our Online Store Profits Are Up 46% Year Over Year And Still Growing – Our Mid Year Report
- Despite The Downturn, I Feel Wealthier Than Ever
- How To Become Less Busy And More Productive
- 3 Ways To Design A Mobile Optimized Ecommerce Website And The Tradeoffs That You Must Make
- How to Deal With Vendors Effectively