🌼How To Know if a Business Is a Bad Idea Before Even Starting It(HIGHLY RECOMMENDED)
I declined a 4 figures business opportunity because I knew it wouldn’t work for me from the beginning.
Several weeks ago, I had a meeting with an old coworker. She told me about a business opportunity she found and wanted me to be part of it because I have experience with startups and side hustles.
She wanted to build a nail and eyelashes beauty salon in a good spot and showed me the vision document, the excel with the initial expenses and possible profits, and the analysis she and his dad made to make it successful.
The business sounded promising, and it has a high demand right now. In numbers, we were going to make around $7000 monthly from the beginning, with the potential to hire more employees when it was more stable.
However, even though I had the money I needed to start it, and it sounded like a good business opportunity, I decided not to be part of it.
After these three years of running several businesses, I have failed a lot. The only thing I regret is putting a lot of effort and value into things that were destined to die from the beginning because I simply don’t have what it takes to run certain kinds of businesses. But my desire to grow didn’t let me realize I was making a mistake.
For that reason, here I will show you how to know that a business is a good opportunity for you before even starting it; that has nothing to do with money or time.
The business has a lot of minimum requirements for it to start running.
Every business represents a risk. But some are so low that it is worth trying for their potential gains. For example, in any area of content creation, companies that focus on services, dropshipping, coaching, and courses require a minimum to no investment to start but have a lot of possibilities for growth.
However, some businesses like stores, restaurants, pharmacies, product selling, and trading require a big capital, licenses, and a minimum requirement to start running.
The problem is that after those investments, they will not guarantee success. Therefore, it is good to consider your options and if it has a target audience before starting it.
The beauty salon requires a considerable amount of minimum requirements to start running. We needed a good local well equipped (Women don’t like to go to places that don’t look fancy enough), all the products we will use to do the service, and a good marketing team to start attracting clients.
As someone who has already built several businesses with zero initial investment and a good content creator, I didn’t think it was a good business for me because I could use my time and zero dollars to start something online and succeed.
And even if I decided to start it, I would be afraid of losing my time and effort when I could do many other things I know could give me more gains.
You can’t find a way to scale it without needing other people.
Some businesses can run alone or with little time, like selling digital books or products, running a newsletter or blog when you already have the audience, a Twitter account, Real Estate, and investments.
Those businesses are easier to scale because you only have to increase production, buy more assets, or increase the price without compromising your time, and it could grow over time.
However, businesses that need your presence to do something are hard to grow, especially when you have competition that has fixed prices.
You can’t increase your prices because other stores offer the same service for less, and you can’t increase your production because you already are using all your available time to work on it.
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So the only way to keep increasing is to hire more people.
The problem is that human resource is the most complex business you can do because managing people requires many psychological factors that are different for each person. If they are unhappy, your business will not have a good quality of service.
You can’t build a brand around it.
A brand is what differentiates your business from others. When you have a respected brand, people will select your product over any other option because they know that you are the one who offers quality.
In addition, with a brand, you can start a different business, and you would already have an audience because people will already know you for how you work, above any product.
When you can’t create a brand with a business, you are destined only to offer what the product can reach, making it difficult to scale or market it.
If you can’t find a way to grow your business, eventually, it will go bankrupt. The world is constantly changing, so what is working right now may not work later, and if you can’t find a way to identify yourself, you will stay in the same place until you are not relevant anymore.
Building a brand with general businesses like technology (where you have from phones to even refrigerators with Samsung), a new product in any area (like starting with gym clothes and then moving to shoes and equipment), or being a social creator (and move to different platforms) is easy because there are many branches and new ways you can grow.
But building a beauty brand is hard, especially since it takes a lot of capital to build different new products, and there’s already a lot of competition.
So we’d probably be in business as long as lashes and nails are relevant, and how we build a brand will depend on which polish comes up with a new way of painting nails, not our ideas.
Delivering the product requires too much time.
In the Millionaire Fastlane, a book by MJ DeMarco, he talks about the story of a girl who quit her job to create her own business, but the time she spent on it was not worth it, so she came back to her job:
“Jillian’s dream was to be her own boss. After a 13-year career on wall street, she quits her financial adviser job and buys a well-known deli franchise. However, she had to work seven days a week, work long hours, and burned out in 2 years. Althought she was earning $90,000, she has no free time to enjoy anythingg. she could pay an employee, but she couldn’t affort it with her lifestyle so went back to her comfortable 9–5 job.”
When you have to spend more time working on a side hustle than in a regular job to obtain the same profit as a salary, then you are not really free. And if you have to hire an employee and the remaining profit doesn’t let you enjoy life, then you should probably evaluate a better source of income.
The salon required me to be there at least for the first months, and even though I had free time to be there, I didn’t like the idea of using it to be there for the earnings the company would make.
Your business tries to change buying habits.
People already like how they are doing certain things, so if your business is not going to make their life easier, cheaper, or better, it would probably not work.
We didn’t have any extraordinary idea or something that would make a difference from the competition, just another beauty salon that offered the same services as the other.
I didn’t think about any idea that could make our business a difference, and the other signs made me realize it was not the moment for me to be creative.
Just because something currently works for many entrepreneurs, has a large audience, and has a big demand in your area does not mean it can be successful for you.
Personally, this business wasn’t for me because I already know how to make money without needing a large capital, employees, or using my time. And even if I knew it could give me a good profit over time, this business needed my presence so much that I knew it wasn’t for me.
Considering how a business can impact your current lifestyle and personality before starting it is essential because it determines if you will put your best into it. Most people fail to grow a business because they are not enthusiastic enough about the idea and just think about the money they could make.
But it doesn’t matter how “passive” you can do a business over time by hiring employees or a manager, you will need to be there eventually for it to grow, and if you don’t like what you are doing, you will not do your best.
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CONTRIBUTED BY Desiree Peralta
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