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Small Business Blog

Place where you can learn about business building and actually talk to someone about it.

Basics

15 October 2021

Basics Basics

2. Basics. Why this, why me, why now

Welcome to our first chapter! 

We will discuss the basics of building your successful Business Baby.  

Before going into any business venture, each of us has to ask ourselves a question, why?

  • Why this idea? 
  • Why me? 
  • Why now?

Each of those Why’s is equally important, because there will be time when things get hard and you will face their counter questions: 

  • Is this really worth it? 
  • Should I keep doing this? 
  • This is a bad time for me, should I quit?

 

We all have times when we think of something and ask ourselves, “Why doesn't anyone come up with this?” Or something like, “I can totally do this better.” Or even better one: “My friend does this cool thing and he is super successful. I can do it too and also be successful.”

While coming up with these questions doesn't mean you should or should not start a business, I've seen it countless times when people jump into a venture, quit their job, sacrifice friends and family time and their entire savings to go back to their job a year or two later. 

Excitement of the new venture that could make you independent and successful is a great and powerful feeling, that often can deceive even the best of us. I’ve made that mistake many times before. We always hope for the best and often overlook the important reality, some very key details, why this idea, why me, and why now?

Building a successful business is one of the most exciting and rewarding things, and let’s make sure, we do it the right way, and most of all, it should make money..

Let’s dig into each of these points deeper.

Question 1:

Why this idea? Or what is your thesis for the business.:

  • Is it already being done by someone in the present or past?
  • If it hasn’t been done before, perhaps there is no demand or market for it?
  • If it already exists, does it have a large competition or oversupply?

Let’s do the Homework:

You must research other businesses that exist in that field( or physical area, if it relies on local customers). It’s possible you haven’t looked yet or haven’t done a good research. Every single idea or business exists in some shape or form. Some interesting data on ideas comes from venture capital firms, an average VC firm looks at over hundred of business or startup submissions every single day, most of those submissions get automatically filtered since they mimic something that already exists.

If you see an opening in the market, perhaps it’s a local retail business that's not being served well in a specific area and there is a need for it or perhaps an industry that you are in, keeps growing, opening more demand for it. Those are a good signs to look for.

Jeff Bezos, founder of Amazon, noticed that Internet was growing at an insane rate year after year, and that people were slowly starting to shop online too, so he decided to start selling things, he started with books. The rest is history.

Question 2:

Why me? Or What is your competitive advantage?

  • Are you an expert in the field?
  • Can you do it better than others?

Let’s do the Homework:

If you are well funded, and experienced in the type of business you are opening, it is much easier to get your BizBaby successful. However if you are not an expert and don’t have a very long runway to become one, or don’t have a potential partner who can cover some of these weak spots, perhaps it’s not the best idea to jump into it right away. I would suggest to get experience in the field first, understand all ins and outs and the economics of running that type business first.

Lara Merriken, founder of Larabar, didn’t know anything about making energy bars and selling them. So she got a job at Wholefoods instead, and while she was working there, she was observing what was selling the most, she was trying different recipes with her friends and co-workers and eventually she had enough to propose her product to a WholeFoods buyer. The rest is history.

Question 3:

Why now? Or is this really the best time?

  • Is the market and demand growing?
  • Is this a good time for YOU to jump into a business venture?
  • Is there a specific change in the industry that’s being overlooked?

Let’s do the Homework:

Many businesses were started out of boredom with the current job or lifestyle. That doesn't mean it’s a good idea to start a business. Feelings change, personal situations change too, however businesses require time and money to be built. It’s considered a rule of a thumb to have at least 2 years of runway before business can continue on it’s own cashflow. Make sure you are in a very good financial situation to start something.

Industries change too, you need to watch out for “too good to be true” proposals or opportunities. Perhaps there is a shop that is for sale cheap, or space with low rent that is extremely attractive to pass on. Successful businesses that make money don’t sell for cheap. Perhaps there is an underlying reason why it’s affordable, don’t assume it’s a coincidence. Double and triple check everything and ask for experts to look into it, perhaps there is someone you know who has experience in the field.

Right now, dry cleaning industry is changing at an increasing rate. Less and less people are required to wear uniform or business attire to work, and more and more people are starting to work remotely. So this would be a BAD idea, to jump into a dry cleaning business! 

However, the remote work and shared office space trend was caught by Adam Newman when he and his friend decided to start WeWork, as we know, WeWork today is a multibillion dollar company with close to a thousand locations worldwide.

 

Now that you’ve learned the basics and the power of 3 why’s, you are ready to get started with homework before building your own BizBaby.

 

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