A DEEPER LOOK AT WHO YOU ARE: MYERS-BRIGGS

Another of today’s most respected and well-known personality tests is called the Myers-Briggs Type Indicator assessment. Developed in the 1940s by Isabel Myers and her mother, Katharine Cook Briggs, the test is continually updated, and more than 2 million people take it every year.

The Myers & Briggs Foundation (www.myersbriggs.org) instructs people interested in taking the test to find a certified career or coun seling center so that a certified administrator can give you the test and review the results with you.

In the meantime, however, the following is an overview of what the test will identify, mainly the dominant factors in your personality, your natural tendencies, and how you process information and make decisions. These are all aspects of our personality that emerge on a daily basis in business.

Definitions of Personality
In the four pairings below, you will find descriptions from Wikipedia of two opposing personality traits. Each of us favors one over the other in each pairing, and the test reveals which of the two suits you more. The extrovert’s flow of energy is directed outward toward people and objects, and the introvert’s is directed inward toward concepts and ideas. Extroverts are action-oriented and desire breadth, while introverts are thought-oriented and seek depth.

Sensing and intuition are the information-gathering functions. Individuals who prefer sensing are more likely to trust information that is tangible and concrete. They prefer to look for details and facts. On the other hand, those who prefer intuition tend to trust information that is more abstract—those flashes of insight that seem to bubble up from the unconscious.

Thinking and feeling are the decision-making functions. The thinking and feeling functions are both used to make rational decisions. Those who prefer thinking tend to decide things from a more detached standpoint, measuring the decision by what seems reasonable, logical, consistent, and matches a given set of rules. Those who prefer feeling tend to come to decisions by associating or empathizing with the situation, looking at it from another angle, and weighing the situation to achieve the greatest harmony, considering the needs of the people involved.

Judging (thinking or feeling) or perceiving (sensing or intuition) functions describe how we relate to the outside world. People who are “judging” types prefer to “have matters settled,” and those who are “perceiving” types prefer to “keep decisions open.”

So what does all this mean? Do you have to take any of these tests in order to start a business?

Not necessarily. However, among my goals for this book is helping entrepreneurs increase their chances of success. Risks must be considered when you’re deciding whether to launch a business and what type to launch. While there are numerous considerations to take into account in making these decisions, identifying a business and role for oneself that is compatible with one’s personality can only enhance your chances of success and satisfaction. Further, this awareness can increase the likelihood of your success in the ongoing management of the company. This knowledge is a hidden and powerful opportunity, one that will serve you well both in choosing a business that fits your style and building a business that works for you.

PERSONALITY AND ENTREPRENEURSHIP

Although there are proven personality tests that have been around for decades (which we’ll discuss later in this section), Bill Wagner’s book, The Entrepreneur Next Door, is a tremendous tool because it directly focuses on the relationship between personality and entrepreneurship. Wagner believes that personality does have a significant influence on how you perform as a business owner and that the secret to success is choosing a venture that fits one’s entrepreneurial personality. In a recent article by Wagner entitled “What’s Your Entrepreneurial Personality Type?” he explains:

Successful entrepreneurs share a number of common personality traits, and these traits are the predominant indicators of their success—outweighing education, family ties, skills, and experience. Moreover, people who choose business ventures that are in sync with their true personalities tend to experience the greatest level of success and fulfillment.

Wagner identifies seven broad personality types. Generalists, who are more strategic or leadership-oriented, include the Trailblazer, the Go-Getter, the Manager, and the Motivator. There are also three Specialist personality types, who are more tactical in their behavior; these are the true “experts” who enjoy the details and are typically very good at them. He calls these three types the Authority, the Collaborator, and the Diplomat. For a brief summary of the seven types, visit his Web site, The Entrepreneur Next Door (www.theentre preneurnextdoor.com), to find out which best describes you.

There are other tests that can help inform you about how to approach business, how you process information, how you interact with others, and how you make decisions. One of these was developed by Dr. David W. Merrill and Roger Reid back in the 1960s and is still in use today for achieving success in sales and management careers. The Social Style Model divides people into four Styles: Driving, Expressive, Amiable, and Analytical.

Driving Style. These people thrive on the thrill of the challenge and the internal motivation to succeed. Driving Style people are practical folks who focus on getting results. Words that describe them include action oriented, problem solving, direct, assertive, risk taking, and independent.

Expressive Style. These people are very outgoing and enthusiastic, with a high energy level. They are also great idea generators but usually do not have the ability to see the idea through to completion. Words that describe them include verbal, motivating, convincing, impulsive, influential, charming, and confident.

Amiable Style. They are dependable, loyal, and easygoing. They like things that are nonthreatening and friendly. Words that describe them include patient, loyal, sympathetic, team oriented, relaxed, and trusting.

Analytical Style. Analytical people are known for being systematic, well organized, and deliberate. Words that describe them include controlled, orderly, precise, disciplined, cautious, and logical.

Knowing who you are in relation to others is important. If you are Driving (which I happen to be) and the person you are speaking with is Amiable, you need to alter your way of communicating or the two of you will most likely clash. The relaxed Amiable Style may be put off by your action-oriented Driving Style. You may be seen as demanding, impatient, and forceful, which would instantly conflict with his or her easygoing and patient Amiable Style. However, if you can quickly assess that this person approaches things from an Amiable Style, then you can tone down your focus on results and instead recognize that this communication would be much more effective if you adjust and connect in a more personal and nonthreatening way, allowing time for things to unfold. On the other hand, if an Amiable person wishes to connect with you, he or she will need to adjust his or her own behavior to get right to the point.

One mistake common among business owners is the expectation that everyone is—or should be—just like them, and that these people should accommodate the owner’s communication needs, rather than the other way around. For example, I recently spoke with a businesswoman (Amiable) who hired a financial planner (Analytical) to help her figure out her next steps. She said that although he is offering sound advice, she finds herself drained of energy in his presence and resistant to his recommendations—so much so that neither of them wants to continue working together. We had a brief discussion about Social Styles. As an Amiable person, she felt the need to make tough decisions in a relaxed, friendly environment, with time to process the information. As an Analytical Style, his approach is, “Here are the facts, now make your decision.” However, armed with this new recognition, she realized how the two could work together and that she could, in fact, get her needs met. She came to understand that she does need his expertise and that she cannot take his style personally. She has adjusted how she interacts with him so that she now takes the information he provides home, which gives her ample time to digest it and make critical business decisions on her own terms and in her own time.

You can determine where your personality fits in this framework through books, career coaches, or Internet sites, but the originator is the TRACOM Group, which offers a variety of Social Style tests and books at www.socialstyle.com. The advantage of going directly to the source is that they provide comprehensive results that can clearly articulate your findings.

WHAT ROLE DOES YOUR PERSONALITY PLAY?

There are many tools and assets we bring to the table when starting a business. None is more important than you. Each of us is wired differently, and to some extent this wiring will play a role in determining what we will be best at, enjoy most, and find most challenging. With that in mind, I want to share insights and research that will prove useful in understanding personality and what role it plays as you begin to formulate your business idea and, eventually, your plan. Turning inward for a little self-evaluation is the first step in making money your way.

YOUR DREAM AND YOUR PERSONALITY

Business experts have long known the importance personality plays in business success, which is why some of the world’s biggest and most successful companies train their managers to do personality assessments for potential and current employees.

When starting your own business, you begin with a blank slate: you are free to design it to fit your needs, your lifestyle, and exactly who you are. But what specific impact does your personality type have on selecting the “right” business for you? And what role does your personality type play in your business success? In this section, we will explore several different kinds of personality tests and how they might affect your thinking about your prospective or current business. By examining your personality in depth, you will be able to answer questions like: What kind of business suits my personality? What type of role am I drawn to naturally? What traits do I need to compensate for? This knowledge can be a powerful tool. If you are like most people, certain tendencies and preferences may suddenly make more sense to you and quickly clarify the approach that is most likely to meet your needs and goals.

This knowledge can also lead to a deeper understanding of those around you, such as customers, clients, vendors, and potential partners, which can help you adjust your own communication to bring more positive results. I have taken many of these tests myself and can therefore verify that they’re a terrific way to better understand yourself and how your personality relates to your own business. While we’re all made up of many traits (some that may even appear to conflict), these personality assessments will help us gauge which traits are dominant, revealing both our strengths and those areas that require a bit more attention.

BUSINESS DEFINITIONS DEFINED

There are several ways people describe the type of business they are in, and in most cases more than one description will apply. While there are hundreds of categories that get very specific, for our purpose here, which is to help with the process of finding your niche, let’s review the most popular categories:

• Service business. A person (or more than one person) delivers a service, such as housecleaning, massage, or tax preparation.
• Product business. The business is based on the offer of a specific product, such as a household gadget, software program, or children’s toy.
• Retail food service. A business that directly provides food products (e.g., a pizza parlor).
• Food business. A business that offers a food product that is prepared for sale, direct to consumer or wholesale (e.g., your own jarred tomato sauce).
• Professional. A firm that provides professional services (e.g., a law firm, accountancy firm, detective agency, or computer support company).
  
• Technology. A company in the tech field, which can include anything from software development to the sale of mobile devices.
• Media. A business that focuses on some aspect of media, such as publishing, content production, public relations, or advertising.

Other classifications are based on the target customer. Who is your customer?

• B2B (“business-to-business”). A business that sells to other businesses. A printing company or medical device manufacturer are good examples.
  
• B2C (“business-to-consumer”). A business that sells to end consumers. A retail shop or eBay PowerSeller are examples.
  

SOLVE A PROBLEM: THE PROS The Creativity Is Boundless

When you create a business that fills an existing gap in the marketplace, being creative is not just possible, it’s essential. It is completely up to you to open up your creative channels and to take chances experimenting with your ideas. It requires a willingness to explore your options, read everything, look at the examples of others, and then allow yourself to put your own twist on things. It relies heavily on trusting your intuition.

You May Have Little or No Competition

When you find a clear market opening, there may be little or no competition, at least in the beginning. This is an incredible opportunity to create a new space in the market. If your idea is a good one, competition will eventually come on your heels, but you will already have paved the way and still have the opportunity to lead or to sell your business to those who want to enter the market.

You Have No Rulebook

The best part of creating a business from scratch in a clear market space is that there is no prescribed corporate structure, process, or requirements. You make it up as you go. Although it can be a daunting task at times to create the system, at least it is your system, and you have complete freedom and flexibility to make the necessary adjustments as you move forward.

SOLVE A PROBLEM: THE CONS
You Have No Rulebook

It’s both a pro and a con. You have to make up the rules as you go along, and you may travel down many blind alleys before you find the rules that lead to your success.

Your Risk Is High and Unknown

Not only don’t you have a rulebook, you don’t have a road map either.
Creating a brand-new product or service is not like buying a franchise,on your own. You must rely on your own vision of the gap in the market and create the business out of thin air. There is no “right” way to do it. It’s nice to have this freedom; however, the risks of failure are high. No matter how much you research the space and how hard you work, you are venturing into uncharted territory. You will earn the respect of some, but the passion and belief in your vision will need to come from you, especially when things don’t go as you had planned.

You Have a Large Learning Curve

Learn from the mistakes of others. You can’t live long enough to make them all yourself. —Eleanor Roosevelt

When you start a new company from scratch, every aspect of your business needs to be created. This is an enormous task that requires a tremendous amount of learning, patience, and skill acquisition—or the knowledge to do what you know and outsource what you don’t. You will make mistakes. It’s inevitable. What’s important is that you try to make as few of them as possible, and learn from the ones you do make.

Most Start-Up Businesses Fail

As you probably already know, most small businesses fail within the first three years. However, if entrepreneurs dwelled on this statistic, new businesses would never be created. Start by devoting substantial time and effort developing and critiquing your plan. Focus on what you can do and what will work. Let go of ideas that aren’t working quickly. There is no place for an ego in this process. When I can see that an entrepreneur is so in love with his idea that he can’t see the glaring warning signs before him or hear the messages that people are telling him, things will fall apart quickly. Be willing to let go and move on. I have seen many inventions that were fantastic in concept. However, that does not mean they should all be taken to market. The business case must be scrutinized.

THE THIRD APPROACH TO ENTREPRENEURSHIP: SOLVE A PROBLEM

Life is either a daring adventure or nothing.—Helen Keller

It’s something you probably say to yourself regularly: “If only a product or service existed that would solve problem X.” Usually this type of thought comes naturally within the course of a day—while you’re cooking, cleaning, driving, taking care of the kids, golfing. Whatever your activity, opportunities to solve challenges regularly present themselves. If you’re creative, you probably come up with new ideas frequently.

The third approach to entrepreneurship taps into this type of creativity, which aims to identify a problem and solve it. What could be improved or made more efficient? What is missing from the marketplace that could make life easier/better/more convenient? While the solution could be a product invention or a variation of an existing product, it might also be a service that could improve peoples’ lives or address a specific need. In some cases, the “solution” is actually creating a new market. Even so, whether consumers were asking for it or not, a need exists and the solution gains demand.

This approach can represent both the greatest monetary risk and the greatest potential for creative and financial reward. Even if you have knowledge related to a new venture, because it is truly novel there are simply many unknowns. And, unlike the second approach, there is no proven market, so your sales forecasts are hypothetical, or, as an investor once said to me, “pure fiction.”

The “solve a problem” approach requires the highest learning curve and can require significant investment. Also, it is not uncommon for powerful competitors to enter your space just as you begin to gain momentum.

Because the minority of people who attempt this approach overcome these barriers and achieve success, the rewards can be extraordinary. If successful, you can earn hundreds of thousands of dollars—perhaps millions. And these are the kinds of companies that can be sold to larger corporations for sizable sums. Further, there are few things more satisfying and fun than to see something you have conceived all the way through to fruition.

When it comes to this approach, I can speak from personal experience: I created my business in response to a market need I observed and then met. It began when my toddler-age daughter found great entertainment unraveling the roll of family toilet paper. Cute, yes—until she clogged the toilet. When I went to the store to purchase the gadget that would prevent this, it didn’t exist, and there came my inspiration. I reached out to other parents to find out if this was a challenge for them too, and when I found out it was, I went through the process of inventing and launching the TP Saver® into the marketplace. Seven years later, it is being sold through retailers across the country.

Throughout the invention process, I met many people along the way who helped me, and I realized that after going through the process I was in a position to help others. That’s when I conceived of my first business, Mom Inventors, Inc. Today, the company helps other moms bring their products to market by offering them information and support and by licensing, manufacturing, distributing, and selling products invented by moms under my internationally trademarked Mom Invented® brand.

HOW TO FIND A FRANCHISE THAT FITS

Buying a franchise requires lots of research. First, you’ll want to choose a brand you feel good about and an industry that fits with your interests and personality (there are at least 80 industries, so chances are good there’s a field you’ll be drawn to). It doesn’t need to be a big franchise to be worthwhile, and there are many options that enable even cash-strapped entrepreneurs to enter the marketplace.

A good place to start researching all franchise opportunities is the International Franchise Association (www.franchise.org). Other independent franchise lists are available on sites like Entrepreneur.com (www.entrepreneur.com/franchises/franchise500/index.html),Franchise Direct (www.franchisedirect.com), Franchise.com (www.franchise.com), or Franchise Gator (www.franchisegator.com).

Once you’ve targeted your options, more research is crucial, from reading the FDD (franchise disclosure document) to brushing up on your business basics so you can manage your new venture properly. Look for a franchise that offers substantial training so you’re comfortable from day one, and make sure you’ll get the support you need from the franchisor, whether it’s setting up your store, training your firsttime staff, or having the proper tools to manage your finances. It’s also a good idea to contact current franchisees and those who have recently left the system to learn about their experiences.

STARTING A FRANCHISE: THE CONS

It Can Be Costly

Buying a franchise can be a daunting experience. The barriers to entry tend to be high, with buy-ins ranging from several thousand dollars to more than a hundred thousand dollars. The up-front capital costs will vary depending on the franchise you choose, but expect to invest money at the outset to purchase the rights to become part of just about any franchise. While you’d need to invest money in any start-up, if you go it alone, there is the option to grow organically and at your own financial pace. When it’s a franchise, there are set fees, up-front investments, and capital reserve requirements you are obligated to meet right away.

Your Turf May Be Limited

When you buy into a franchise, you are generally given an existing territory in which to operate and market your product or services. You can’t reach out beyond your defined territory (other than by buying additional franchises, if allowed), even if you see a great opportunity. This can be very frustrating.

It is important to have a clear understanding of the extent of your territory, the rules of competition between fellow franchisees, and your franchisor’s level of commitment to limiting the number of potential new franchisees in or near your territory.

The Rules of Engagement Are Firm

With franchises, the rules are the rules, and there is little flexibility within the franchise structure. The franchisor has established a model for success and does not want you to change the formula. Therefore, creativity is often discouraged or even forbidden. Even if you have great ideas and an ability to see new opportunities, the franchisor is invested in building the brand their way, and they will not encourage individuality. If you view entrepreneurship as a way to set free your creativity in how you do things, where you do them, and how much money you can make, a franchise may not be right for you. Likewise, if you find that you like a particular market and a particular business model but don’t like the constraints of a franchise, you can always open a business in the same industry that competes with a franchise. You will have some initial disadvantages, which are outlined above, but you will also have some advantages, including flexibility in your approach, unlimited territory, and freedom from fees or commissions to the franchisor.

Your Income May Be Limited

In some cases there is a cap on how much money a single franchise can earn within a limited territory. Make sure that you know the full extent of your revenue potential (and any potential cap) before you invest in a franchise. You’ll want to make sure that the financial cap is consistent with the money you expect to make and that that number fits with your personal financial goals. For more information, interview current and past owners of the particular franchise that interests you.

There’s Competition at Your Back

Franchises often grow within competitive fields and new, hotter franchises can come along to compete with you. With limited flexibility to be creative due to franchise rules, dealing with outside competition can be challenging, unless, of course, you are the “new competition.”

STARTING A FRANCHISE: THE PROS

It’s All Been Figured Out

Instead of starting your business from scratch, opening a franchise allows you to look at many existing models in other territories, and to see precisely the risks and rewards. One of the strongest advantages that a franchise offers is an established business model and training. As I have alluded to earlier in this chapter, creating a brand that consumers know, trust, and recognize is an uphill, expensive task. Therefore, starting with a well-known brand can be a major advantage when starting a business; for example, compare starting your own ice cream shop to opening a Ben & Jerry’s franchise. Most people recognize and think favorably of Ben & Jerry’s based on years of branding, retailing, and advertising, so the moment you hang your shingle you’ll have loyal customers who already know which of your flavors they love. Compare this to years of marketing and building a business for a new, more unfamiliar venture.

Your Competition Is Controlled

With franchises, another advantage is that competition within your franchise is controlled (in theory). It’s in the best interest of the franchise owners to help you succeed. For this reason, the corporate office will often limit the number of branches in each territory so that you are not competing directly with another franchisee. Their growth will be greater by having one successful franchisee in a territory than by having two struggling franchisees in the same territory. It should be mentioned that this is worth careful analysis when considering a particular franchise.

The Business Model Is Proven

Part of the challenge of starting your own business is establishing not only your brand but your method of doing business. For example, if you’re selling jewelry, you need to decide whether you’ll sell to retailers or directly to consumers; whether you’ll sell via the Web, open a store, or work through other existing sales channels; and how you’ll handle additional issues such as pricing, distribution, marketing, and fulfillment. Plus, before selling you a franchise, the franchisor will typically do market research to ensure your area has sufficient demand for its product/service. The franchisor will offer ongoing support including national/regional advertising, which can drive more customers to your business. You also get resources from the franchisor for your own local marketing campaigns.

In addition, for many businesses, technology is important. Often franchisors will provide a custom software package specially designed to support the nuances of the business. This alone could make the difference between success or failure. With franchises, you get all of this in a model that’s already been proven in other markets. That means much of the work and many of the decisions that can feel overwhelming on your own have already been researched, tested, and proven elsewhere.

DO WHAT OTHERS DO: POINTS TO CONSIDER

Franchises

When you’re choosing a business based on research and data, buying a franchise can be an advantageous approach. First, a definition: a franchise is a company you buy into that offers a predesigned system for business. You commonly get to use the company’s trademarked brands and other proprietary materials, and you benefit from its marketing programs, systems of doing business, and ongoing support. In return for all these systems and expertise, you usually pay an initial franchise fee followed by ongoing royalties to the franchisor. Franchisors are licensed and regulated, so there’s some degree of oversight as to how they do business.

There are additional reasons to look into franchising. First, by looking into the various franchises available (and there are thousands), you can get many ideas for businesses in proven markets, whether you choose to do it on your own or buy into a franchise. Second, while a franchise business has its own set of cons, by opening a franchise, you will instantly overcome many of these challenges. For instance, anyone could open his or her own housekeeping service. However, they would do so without the benefit of an established brand, pricing, or any ready-made marketing materials. On the other hand, by buying and opening a Merry Maids franchise, you can present the impression of being part of a large, wellestablished, and trusted business, which could be important for a service that involves strangers roaming around customers’ homes.

CONSIDERING A FRANCHISE

Obvious examples of franchises are companies like McDonald’s and Subway, but there are many lesser-known franchises in countless product or service areas that may interest you. These include everything from cleaning services to staffing firms to retail stores. You’ll also find franchises in hundreds of other categories, including health care, construction, maintenance, and tutoring.

For a list of franchise categories, visit the International Franchise Association site at franchise.org/franchisecategories.aspx.

There are franchises you can start from home too. One note of caution: many home-based “business opportunities” may sound like franchises, but are actually network marketing companies. There are a number of ways to tell the difference. Having been presented with many of these “opportunities” myself, the most obvious hint to me is that, after listening to a pitch for a fair amount of time, I have heard more about the “opportunity” to make money—and how others have made money—than I have about the product or service itself. You see, the success of people in network marketing businesses is generally dependent on getting other people to buy an “opportunity” from you to sell the “opportunity to sell” to others, and so on. The surest way to confirm you are discussing a franchise opportunity versus a network marketing “opportunity” is by simply asking to see the FDD (Franchise Disclosure Document, formerly known as the UFOC). If they don’t have one, it is not a franchise. Note: a network marketing opportunity may also work for you as long as you know that that is what you are getting.

THE SECOND APPROACH TO ENTREPRENEURSHIP: DO WHAT OTHERS DO

Experience isn’t always necessary to build a business, and this second approach to entrepreneurship enables you to move forward in entirely new directions—directions that are supported by research and analysis of the market. With the “do what others do” approach, you’ll research the marketplace (or rely on current research), analyze your opportunity, and move forward with the “right” business for you, your marketplace, and your potential customers.

In the first approach, risk was reduced by “doing what you know.” This section presumes that your desire is to do something completely new to you. When entering a brand-new field, risk is a major issue to consider. For this reason and others, research is even more critical to this approach. First, you will want to be certain that the reality of your new endeavor will match your perception of what the business is like. Second, the better you analyze opportunities, the more you will be able to recognize and avoid the risk factors.

Not only will it be important to understand the available market you wish to serve but also any necessary training, certifications, and other things you will need to address.

As you can see, this area is vast. Many of these businesses will fall under the following categories, with some examples of each:

• Consultancies (computer, software, business)
• Agencies (independent insurance, distributorships and manufacturers representatives, real estate brokerages)
• Independent tradespeople (plumbers, heating and AC companies, painters, repair people)
• Hospitality (restaurant, hotel/motel, entertainment)
• Self-employed professionals (accountants, attorneys, freelance journalists)
• Network marketing (health supplements, lotions, kitchen gadgets, telephone systems, pet products, jewelry, cosmetics)
• Franchises (all of the above)

As you explore, choose the opportunity carefully, and make sure that you connect with the culture of that industry.

DO WHAT OTHERS DO: THE PROS

First, you will want to determine, with a considerable degree of confidence, if there is a market for your business. There already may be a solid amount of data enabling you to question and validate the market for the business. Second, the availability of training and certifications for virtually any subject through local community colleges, vocational programs, online programs, and various government and nonprofit organizations has never been better. Third, you can choose something that both feels right to you and meets your initial investment capabilities. Fourth, you are your own boss—you can use your own creativity and work ethic to build exactly the type of business with the type of culture you want.

DO WHAT OTHERS DO: THE CONS

These can be very competitive businesses. Because the existing market is so apparent, many people are trying to serve it. For example, think of the dozens of restaurants competing for diners. There is a dry cleaner in practically every strip mall, and almost everyone has a friend who is in real estate.

Differentiating yourself from others can be difficult and expensive. You will need to find ways through the quality of your service, pricing, and branding to address these challenges. Finally, depending on the nature of your business, creating the infrastructure and tools can be costly. Software programs for billing, reservations, customer management, telephone systems, inventory tracking, vehicles, and design are only a few of the potential challenges for a new company.

Think Creatively to Differentiate Yourself

At its core, this approach definitely relies on research and analysis of the marketplace to uncover opportunity. But there’s no reason it can’t also fulfill your personal interests or passions. Unlike the first approach, “Doing What You Know,” this second approach really enables you to consider a world of options and to do something related to what you’ve always dreamed of doing. So what is it that you love? When you’re working your day job, what work do you daydream about? Do you have a knack for cars (auto business)? Are you devoted to art (interior design business)? Do you love computers (tech support company)? Do you have a passion for animals (pet care business)? Do you love to cook (catering)? Tapping into that thing that you already love—the thing you talk to your friends about, dedicate your weekends to, or spend time thinking about—is a good place to begin researching new opportunities.

If you think you want to pursue this path but are not certain what you want to do or are frustrated because nothing seems to grab you, find a comfortable chair, get a flip chart or notepad, and start brainstorming!

First, write down the work or skills in which you have competence, even if you’ve never been paid. For example, are you organized, communicative, a good writer, good with math, computer savvy, etc.?

Write down businesses you have seen that are interesting to you. If you need a jump start, grab the yellow pages, open coupon mailers, read the classified ads in the back of business publications, visit online school programs for possible curriculum and certification programs, and look at franchise directories (such as the one suggested in the next section). Each time you see something that seems interesting, add it to your list.

After you have come up with a good list, take time to think about your strengths, challenges, and preferences. Consider what you have already learned about your personality. Are you extroverted, or do you prefer to work alone? Are you comfortable with technology? Are you mobile, or do you prefer to stay in an office?

Now match these personal preferences and attributes with your initial list of business types that interest you. Circle the top three that feel the most “right” to you at this moment.

DO WHAT YOU KNOW: THE CONS

DO WHAT YOU KNOW: THE CONS It May Not Excite You

One business colleague recently shared with me his feelings about working in his industry. “Stay out of the corporate world!” he told me. “I would rather mow lawns five days a week if I could earn the same money.” If you’ve been working in the same industry for the past 10 years, you may want out because you’re bored or you want to try something new. Perhaps you crave entrepreneurship because it will give you a chance to do something entirely different from what you’re doing now. Clearly, then, doing what you know may not be the right approach for you. If you’re a staff mental health counselor who’s burned out, for example, starting a private practice may not change things enough. If, however, you love the work or field but not the circumstances (e.g., low pay, having a boss, the work hours, the commute, poor working conditions, or challenging office politics), the reverse may be true.

You May Not End Up Doing What You Love

No matter what your knowledge or skill set, becoming an entrepreneur
may actually take time away from what you ultimately feel passionate about. For example, if you’re a top pastry chef at a large hotel and you love making pastries, starting your own bakery will inevitably take time away from the part you love—the baking. You will need to spend a tremendous percentage of your time marketing, managing people, dealing with finances, doing paperwork, and making sales. In other words, you may end up doing “business” rather than what you love best. On the other hand, if you go into it with this knowledge ahead of time, you have the opportunity to structure the business in a way that supports what you want and love to do; you can temper the issue by hiring people to do the tasks that you like least or that you’re least equipped to perform. If you don’t like sales and accounting, for instance, then hire a commissioned salesperson and outsource an accountant. Many of these issues can be overcome with careful business planning.

What Business Fits Your Million Dollar Dream?

Money will come when you are doing the right thing.
—Mike Phillips

Before you take on any project—whether it’s renovating your home, planning a family vacation, or making a big purchase—a key first step is exploration. What’s out there? What are your options? What are the latest and greatest ideas? By exploring the choices, you open your mind and heart to exciting possibilities you may have never considered.

This is especially true when you’re starting a business. There is no single path, and you can change your life right now. You have complete freedom to choose what you want to do, how hard you want to work, and how much money you want to make, which can be liberating and daunting at the very same time.

If you have already determined exactly what that path is and the type of business you wish to launch, great! Use the information in this chapter to gain insights into how you might adapt your approach to your business, customers, and employees.

However, if you like the idea of choosing your future but have not come up with a path that fits, then you are at the right place. The focus of this chapter is to help those whose direction is not yet clear. If that’s your situation, you will want to engage deeply with the materials in this chapter and with the associated resources and exercises, which will help get your creative thoughts and ideas percolating and get you on the path to reaching your ultimate goal.

This section is intended to get your mental wheels turning and your inspiration firing by offering you insights on identifying the business that works best for you and how to approach it in a way that maximizes the likelihood of success.

THE THREE ENTREPRENEURIAL APPROACHES

You’ve probably never thought about it before—I know I hadn’t when I first started my business—but there are three distinct approaches to choosing a new business. While there are variations that may incorporate more than one of these in combination, here are the three general routes most entrepreneurs take when starting up a business:

1. Do what you know.
2. Do what others do.
3. Solve a problem.

Let’s start with a detailed understanding of each approach, explore some pros and cons of each, and then look at examples of how each type of approach can lead to fulfilling, successful businesses.

THE FIRST APPROACH TO ENTREPRENEURSHIP:
DO WHAT YOU KNOW

Maybe you’ve worked in a particular industry for another company, and you have acquired skills and knowledge over time in that industry. Perhaps you grew up learning a specific skill from your family. Or maybe you’ve devoted time and energy to a hobby that could become a profitable business. If so, starting your own company in the same field may make sense. For instance, a bartender or waitress may decide to open a restaurant; a woodworking hobbyist may become a full-time carpenter; a staff graphic designer may start his own Web design company; or a corporate accountant may open her own firm. All these are examples of doing what you know in order to make money your way. Of course, there are pros and cons to every approach.

DO WHAT YOU KNOW: THE PROS
Your Risk Is Lower

The advantage of starting a business based on the experience you’ve attained, whether working for someone else or on the side as a hobby, is that you already possess the knowledge you need to move forward. Unlike starting a business in a brand-new industry (a teacher who wants to open a gift shop or a lawyer who decides to open a bed and breakfast), you are essentially selling the skills, expertise, and knowledge you’ve already developed. Of the three approaches discussed in this chapter, this is likely the fastest way to start a business. And since you already possess the knowledge, the venture is less risky; you are not starting from square one, and you know the nuances of both your skill set and the industry in general.

The risks in this approach, although somewhat minimized, lay in the specific areas of the business you have not had to deal with when working for someone else. That could include any area outside your specific area of expertise. If you were in sales, bookkeeping may be new. If you were in production, sales and finance may be areas you will need to learn. The best way to mitigate these risks is to identify and acknowledge them immediately and compensate for them in your business planning process. You may hire qualified people, get training in these areas, or adapt your model to better fit your strengths.

You Can Leverage Your Existing Clientele

We all know the power of the Rolodex (or your BlackBerry’s contact list)! Having an existing network of contacts and clients—people with whom you’ve already cultivated strong relationships—can give you the leading edge you need to launch powerfully into business. If you have created strong bonds and worked to build trust with your clients, it is likely that they will follow you when you create your own venture.

Your Learning Curve Is Short

There are still things you will need to learn quickly if you take this approach to being an entrepreneur. You may need to learn to set up a business structure and build or sell your products or services, but you will be doing so with an enormous advantage: your knowledge of the industry. That knowledge affords you a significant time and learning advantage. With other approaches, entrepreneurs start out with a lot more to learn and a much greater degree of uncertainty.

You Understand the Challenges of the Industry

If you’re a copywriter for an advertising agency who wants to start freelancing or a sales representative for a medical company who plans to start up a distributorship, you already understand the industry and the challenges that are associated with it. This gives you an enormous advantage over the entrepreneur who starts without any industry knowledge and who might require years to gain it, often by “learning the hard way,” figuring things out, and making mistakes. How many failed restaurants were started by individuals who thought that since they ate out often, they knew enough to open and run a restaurant?