The gist of this post is if, as an entrepreneur, you can’t develop your idea or business and deliver the product or experience at a profit it isn’t worth pursuing. If you can’t make money from this venture then STOP and pick up something else.
My attorney once told me, “Scott, here’s the test of whether or not to develop an idea… Is it worthwhile?” So, what does worthwhile mean? Here’s how he answered that question. “Can you manufacture and sell this product at a profit?” It really is as simple as that.
So, as an entrepreneur you have to ask yourself, “Is what I’m getting into enough to bother with?”
Admittedly, in questionable form I did bury the lede in this article, so the point is made toward the end. But leading up to the point is an interesting read and shows a contrast and a convergence of a few unlikely bedfellows. Enjoy 🙂
What is a Suit Case?
The basics: a suit case is something that holds things. When traveling, clearly it contains clothes, hygiene products, etc. But the suit case of ideas and categories is a valid definition as well, if you let your mind go there.
The Suit Case!
The concept of ‘Entrepreneurism‘ has a lot in common with sports and religion. All three subjects are ‘Suit Case’ subjects (I refer to “Suit Case” in what American author, neuroscientist, philosopher, and co-founder and chief executive of Project Reason, Sam Harris discusses in a presentation regarding religion as a wide spectrum).
Sports Suit Case…
Imagine signing up to Match.com, eHarmony.com or maybe FarmersOnly.com to find the love of your life and perhaps getting married 🙂 One of the areas of your profile will include your ‘Interests,’ and perhaps the qualities you are looking for in a partner.
In that area you either write in, “I like sports,” or there may be a box to check next to the interest subject for sports. Being interested in baseball and golf you check the ‘Sports’ box. Hours later you, lucky you get a wink or a nod and start a conversation; then meet in person; then meet the parents; then schedule a wedding date.
While waiting for marriage you ask your new-found love to a Dodger’s game (I live in L.A.) and their face goes blank. They put their glass of beer down, (I’m a craft beer lover), and say, “Baseball is boring, it’s such an slow game… I suppose you like golf too… Boooring.” Wedding called off, Ugh 🙁 You see, although you both had an interest in the category of sports, the other person may have been into participating in sports. They may have wanted to be actively engaged in an activity when you where satisfied with passively, and primarily, observing.
No judgement here, just pointing out that the category, or suit case, of sports doesn’t identify any one particular sport. Football is not baseball, hockey or golf, but they fit into that ‘sports suit case.’
You see, while we all like, or at least enjoy a sport of some kind there are many to choose from when you open that ‘Suit Case’. All sorts of things spill out – football, basketball, golf, cricket, soccer, jai alai. Heck, even sports fishing may drop out.
So the moral to the story is specificity. What exactly do you want? In a person? In a religion? While pursuing a business interest?
Religion Suit Case…
Trust me, this will be short.
Jainism, for example, is a religion that “prescribes a path of nonviolence towards all living beings.” That’s a big claim and they fully follow those teachings.
I’ll close this section with this: There is a big difference between claiming a religion of peace, and the practice of a religion of nonviolence.
When you open up the religion suit case you see many offerings, so a person cannot, by definition, simply call themselves good and proper because they are religious. I would name several you might find in the case but I think it best to let that to your imagination and experience.
The moral to the story in this case is to choose wisely on where you place your loyalties.
Whew, thanks for hanging in there on this subject 🙂 Now on to what you came here for…
The Entrepreneurial Suit Case…
This may not be short and sweet, but I think it needs to be said. Entrepreneurs may have a lot of things in common – and they do – but when you drill down the points of different business category pursuits there are some not-so-subtle differences.
NOTE: I never tell people what to do, and I think it wrong to do so, especially if they are coming to you for any level of information or mentoring. I believe it’s my job to tell what I did and let them know if they are good students and can apply sound concepts they will have less, the same or better results than I have. This is not hedging or a cop out, you just never know whether someone is going to put in the time and work you have, and made the sacrifices you have made to get what you’ve got…
Caveat: I know there are books on marketing, books on raising funds and starting a business, books on flipping houses, and so on. And like you I have read a great many of them and have gotten inspiration and guidance. I’ve not only produced my own seminars, I’ve attended many and have gotten what I needed and wanted but I can say for sure that none of the seminars I’ve attended ever resulted in me signing on to any presenter being a Guru.
I bring this particular point up because I think it’s stifling to have that Guru attachment. And, it can be a bit dangerous to spend the money on a program at one of these seminars not because they don’t work, but because statistically you will not implement the material and in most cases you won’t even review the material. Thereby, leaving the program on the shelf and magically transforming that self-help program into a shelf-help program!
I am not suggesting you shouldn’t follow high level business personalities, be mentored or otherwise glean as much as humanly possible from Opinion Leaders, but what I do want to get across is that no one thing is everything.
Back to the point now…
The several definitions of entrepreneur include many of the same words. Risk is usually top of the list. Organize, Initiative and Manage are others.
But, if you’re deciding between buying into a Network Marketing opportunity or spending four (4) years in business school, when you start applying your abilities there are different approaches to setting up shop, marketing and promotions, who your customer is and most of all, how to name exactly what it is you do. You can’t market something you can’t name.
Many books have been written and are being written on the subject of the entrepreneur and somewhere in their message is that if you apply ‘these’ concepts you’ll be on your way. There are really no specifics to any particular category of business in most of these books.
Now BEFORE you call BS on me here, I have been in this business a long time and have developed and launched many products and businesses, and have written two text books and a non-fiction book on inventing. I’ve created and produced a motivational/inspirational movie, ‘Pass It On,’ with its world premier in Las Vegas. I was the co-founder and co-editor of ‘Personal Development Magazine.’ I’ve written four screenplays, several songs-two of which are on high end live country play lists. Occasionally I lecture at colleges and for the last eight (8) years I have regularly delivered three programs, each eight weeks long, to several thousand inmates, mainly in California prisons. From time-to-time I present at motivational seminars and have worked with marketers and business coaches that help grow businesses with sound management and organizing concepts, marketing strategies and accountability programs, and they are all mostly valuable. I call on them and value their input. But, I am very careful who I call on.
AND, I took two years off of work to purchase and renovate a 1925 Craftsman house in Los Angeles, two-and-a-half (2.5) miles from the Rose Bowl. The one question I got was, “Scotty, how could you take two-and-a-half years off work?” My response was simple, and maybe a bit unfair, “I think the real question might be why can more people take that time?” I had to decide what the highest and best use of my time and money was. While doing house project we found several ‘points of value’ which I discuss below.
How did I have that time? Simple, I spent ten years developing, getting meetings and launching the above projects. I Made agreements that would surely benefit everyone involved. Some projects made money some didn’t. The point is that this is a process beyond buying into an opportunity and pitching big money possibilities to others. This entrepreneur thing is about building future monies, starting now with the latest an greatest idea.
Oh, and knowing when enough is enough and moving on to something else!
The point of this subject is that each category of business, and each entrepreneurial pursuit I’ve engaged in has had its own set of rules. It’s own set of start up requirements. Its own time line, from slow burn to retail to arrive on the scene hard and fast being the biggest and best… the first guy/gal to market. Of course marketing, organizing and communication are universal to all businesses. And of course the risk involved can make you or break you.
But, if you intend to get into the category of Boutique Hotels, you might not want to apply the same financial and marketing strategies a Network Marketer would use. And certainly the nomenclature for these industries are completely different. There are similarities and threads through all businesses, recruiting great people with great attitudes that can be taught and an organizational board of some sort.
Beware though, besides definitionally being similar as an entrepreneur, be sure to be specific about what your business is, who you need to talk to. Recognize that the item you pick out of that suit case may be different than your neighbor’s choice. The good news is that you both have the drive that makes an entrepreneur and can share experience and glean importances from each other.
Life Span of Your Offering…
With small businesses that have different or rotating offerings, and of course with inventors, a subject that is usually missed in the discussion is the life-span of the product or offering. This an overlooked subject as it relates to product development and considering whether or not to develop a new offering in your business.
Think about the potential waste of time and money with a long time perspective when maybe this new product or offering may only have a nine to twelve month life span. With this concept in mind, it may be wise to skip one thing for another.
Be emotionally attached to the process of developing but not emotionally attached to a particular product. Process over product, that’s where I get my kicks while inventing, writing songs or creating art with charcoal on canvas.
One of my sayings in the inventor world (and for business for that matter) is, “Ideas are a dime a dozen, the only thing that makes them special is that they’re yours.” In my business of inventing I have to consider many things. As mentioned above the life span of a product is a major consideration for me.
For example, if it is going take $30,000 and three years to get a patent (provided the idea is patentable), and when the product’s life span is eight months, or turns out to not make it to market at all, it would be a bad decision to spend the time and money on protecting it. One of the things entrepreneurs fail at is surveying the public as to whether this thing is needed or wanted.
To paraphrase, one of the definitions of marketing is “…find a need or create a want and sell.” An example of surveying and test marketing is McDonalds.
Before McDonalds launches a new ‘Happy Meal’ for kids they go through a process. First they decide on a new toy, or whatever they’re going to include with the meal. Then they spend months developing the packaging, testing the offering at a few locations to determine a couple of things.
- Is it received well by the kids and parents.
- Where is it displayed on the counter.
- What is the best way for the front-line employees to pitch the product to parents and kids.
…And so it goes before the nation wide roll out of the new ‘Happy Meal’ toy! 🙂
Here’s the thing, we as entrepreneurs, business owners and inventors rarely see behind the scenes of developing an offering and the roll out process. What we do see is the final product on the market and it looks so simple. Think again.
The saving grace for the entrepreneur is that the process is fun, and fortunately misery loves company 🙂 And so does sharing successes 🙂 🙂
Points Of Value and A House…
If you sat with trusted mentors or advisors you might find you’ve been short sighted about where the value is your product or business. Try having the conversation, you’ll be surprised what you may have overlooked being so close to the project.
- What markets are you not seeing?
- What are the different applications for this offering?
- Are there different iterations to suit another population of customer?
- What are the different platforms to deliver this product or service?
I have great friend who is a chiropractor. One day I asked him “Where is the money in your business?” He answered, “Chiropractic adjustments.” As I looked around I saw shelves of supplements, pillows, ergonomic backpacks and a host of other profit centers. All-in-alll he had ten (10) different streams of income. Now, of course he knew that stuff was there and selling but now seeing that if each one were considered an income stream he could profile a patient and direct them purchase this or that. A sort of prescription process you would see at a medical office.
…Again, and so it goes. These conversations with mentors and advisors will save you a lot of heart ache, stress and most of all money… To say noting about disrupting your relationships with friends and family.
The House… (Suplemental – If You’re Interested)
This goes to ‘points of value’ and relationships in an entrepreneurial area many pursue… Buying, perhaps holding and renting, and then of course selling for a profit. But most important, how do you assign points of value to your own interests?
A few years ago we bought a house that was on the market for almost 600 days. No one would touch it because it needed so much work and not even a ‘flipper’ would take on the challenge; the turn around time would kill the profit. But we had different plans for this property. We weren’t going to flip it. This would be our L.A. compound. When I say compound what I mean is that this is a half acre property in Los Angeles (try and find that in L.A…). It’s a two level house on a hill with a modest guest house. 2 1/2 from the Rose Bowl in Pasadena. It is the definition of, Location, Location, Location. But there it sat for 600 days and no one touched it.
In short, we demo’d the house to the studs, sheer walled the whole house, applied moisture barrier. Then, yours truly, with a little help installed over a mile (more than 5,280 leneal feel) of siding. Brought in a couple friends – one is a plumber the other an electrician. Designed the interior with all the yummy amenities.
Here’s the point of the story as it relates to points of value. We separated the upstairs from the downstairs. We applied for and got another address for the now new dwelling (downstairs unit), this increased the property value by an extra 20%. Now there are two kitchens, both with two sinks. Upstairs we added the plumbing for a wet-bar in the living room which has yet to be installed. We’re having conversations about the highest and best use of that wall space all over again. Should we build the wet bar at create more value?
My contention is that the value added makes it worth it. Though we’ll never sell the house, there is something to the notion that this bar would add even more value. Another point of value. Something a flipper would not consider because of the time and money involved. Our motivations would be, and are different.
In any case, when you endeavor into a new project make sure you investigate every angle of delivery of that product service or business.
Oh, and the very first thing we did after escrow closed was to build a ‘sky deck’ at the very top of the property, and though it’s still unfinished, but useable, it is a favorite feature of many who come and visit. It’s one of five decks!
A Few Final Thoughts…
Clearly the concept is to conceive an idea or see an opportunity then decide, and act. But be careful about applying the admonition to follow your passion. Passion means dangerous emotions involved, so beware of good emotions versus bad ones. You have to consider (or not) the affects you’re having on others around you.
To present another take on this subject of passion, I used to, and still sometimes do, suggest doing what gives you a positive emotion sensation. Sounds nice and comfy, right? There is a problem even with this idea. Some people get a positive emotional sensation from doing wrong things; hurting others; stealing, and so on.
I think it best to stay pumped and excited. Obviously surround yourself with like-minded people, but not ‘Yes Men/Women’ or sycophants. Let those involved in the process ‘own’ their position. Yes, it’s fine to pursue your passion or develop a passionate relationship with this project and the people involved.
Get emotionally involved with the process, not necessarily the product.
Simply consider these following three points and things will work out.
1) Opportunity discovery. Have you found a gap that needs filled?
2) Opportunity analysis. Run the numbers to see if these thing makes sense.
3) Opportunity cost. What will this cost you in money, time, relationships and other resources.
Well, there you go. Here’s to accelerating your progress to winning at being an entrepreneur!
*Featured Image courtesy of Witthaya Phonsawat at FreeDigitalPhotos.net