February 11, 2010
As I’ve gone through my analysis of three business opportunities, my mentors have all separately given me the same advice. Shoot higher (see lesson #3) and just do it.
The business I’m closest to pursuing is now moving in the direction of being the least likely I will establish. It’ll need a fair bit of capital from me and will likely take three to four years to build up. Then, it’s questionable whether the business will be worth that much (not that I build to sell, I build to the best in the market) or provide a return commensurate with the risk.
Although I haven’t yet made a final decision, I am a bit disappointed because I think my mentors are probably correct. I can do this business, I can do it well and can likely grow it into the market leader. Whether it’s best use of my time is another matter.
When it came to starting my first two businesses I “just did it”. Very little planning, very little thought of risk and very little concern about the business fundamentals. As I get older, I’m finding that I think a lot more about the risks, the prospective returns, the required investment or the opportunity cost. Now I take in far more advice.
Some entrepreneurial friends would likely be critical of this rigorous approach. But, it’s the approach I’ve chosen to take and it’s working for me. Although, I’m reaching a point where I’m anxious to get started on something.
Stay tuned. 2010 will be interesting.
January 23, 2009
“Let our advance worrying become advance thinking and planning.” – Sir Winston Churchill
For those of you who do not know me, I have started, managed and sold two start up businesses. My first was a restaurant which grew to about $4 million in revenue, was profitable and employed about forty people. My second business was a computer services firm which grew to $1.5 million in revenue and ten employees.
I sold my restaurant when I was 24 years old and felt like I had the “midas touch”. It was successful out of the gates, was very popular in our community and grew beyond my expectations. That first success had me convinced that I could do it again without much effort. Boy was I wrong. I made a ton of mistakes in my second business and paid for them.
While I could probably fill many blog posts just listing my mistakes, I think my fundamental error was not developing a well thought out plan. I am convinced that, had I put some thoughts on paper before starting my second business, it’s doubtful that I would have ever founded it. This is not because it was a bad business, but more because it was the wrong business for me and what I wanted to accomplish.
More on my second business in another post.
I often tell budding entrepreneurs that, knowing what I know today, I wouldn’t have invested in myself when I started the second business. Instead of researching a market, identifying a problem, designing a solution, understanding how I was going to make money and assembling the right team I just “went for it”. I’m convinced I did this because I had already been successful once, why not a second time?
Since selling the last business I have come full circle and am now a fervent believer in planning. A business plan doesn’t need to be complex, it just needs to answer a few fundamental questions:
(1) What is the problem?
(2) What is your solution?
(3) How are you going to make money?
(4) Who are you?
I decided to post on this topic because of a recent email exchange with my sister-in-law. For sometime now she has been convinced that an opportunity exists for her to develop a patient advocacy consulting practice. I won’t butcher her business concept here, but suffice it so say that I agree with her (and have recent experience to bolster my point of view) and think she should do it. But, I don’t think she should do it without a plan.
In our most recent exchange she wrote that she was, “at an absolute standstill.” She thought it was because she didn’t know how to market the concept (although there are two physicians who have already agreed she has an interesting business in mind and one specialist has gone so far to offer to help market her business through his web presence). But, in my view, she’s at a standstill because she hasn’t answered the four questions appended above.
She’s going to write the plan and I have offered to act as her sounding board. The hardest part of planning is getting the first words on the paper, so much like she plans to be a patient advocate, I will be her “planning advocate.” I will post on her progress here and hope to be able to announce the launch of her business in the not-too-distant future!
January 21, 2009
As some of you know, I am consulting to the University of British Columbia in the formation of a campus wide program in entrepreneurship. It’s been eight years since I owned my own business, so while I can’t consider myself a current entrepreneur, I certainly have the bruises to prove that I am entrepreneurial (stay tuned for the results of my current business pursuit).
I’ll post on our program as it evolves over the course of the next several months, but in the interim let me plug a terrific group of UBC students who are putting together Canada’s premier student run business plan competition.
Enterprize Canada (www.enterprizecanada.org) is a Canadian national business plan competition that provides students from across this country an opportunity to have their business concepts and plans vetted, critiqued and submitted for all sorts of prizes and accolades. I know one of the organizers (Boris Remes) and if his method of operating is any indication of the quality of this event it will be a incredible buffet of entrepreneurial excitement!
As I go through the process of forming UBC’s entrepreneurship program, I’m constantly invigorated by this university’s entrepreneurial talent. Whether it’s the 2nd year Applied Science student who has a growing business and is struggling to decide whether to finish his degree, or the young alumna who is building the next great web 2.0 business – these young entrepreneurs are incredible.
If you’re a business person who wants a look at the next generation of business leaders, an investor looking for the next great thing, a mentor give something back to today’s young entrepreneurs or even an entrepreneur looking for mentorship, skills development, money or profile then check out this event.