I have a friend who advises entrepreneurs. He does this because he likes it; it is part-time work at a university and not necessarily lucrative. Thus, I thought he would be a good person to as a valuable question. After many discussions with him about entrepreneurship, I heard him repeat over and over that one has to know their own markets. Many people want to start a business but have no idea whether a market even exists for their business. So slowly I realized that there is a key question that had to be answered. One that is valuable perhaps in monetary terms but also in self-worth as you grow a successful business.
How does one know what market demand exists?
His response was something like as follows. As matter of fact it was pretty darn close to this. "Usually you start with an idea, and then you try to qualify the market. If it's retail, it's mostly location (zipcode) and demographics (including age, income, education, gender, religion, family situation, disability, profession, politics). If it's business to business, it's the type of business and precise industry. If you say 'healthcare' or 'IT' that is too vague. the size of the business (revenue), and sometimes the location. Competitive analysis is critical."
"In most cases, entrepreneurs are better off starting in an area where they have expertise, or a strong personal interest. It's also good to start a business with a goal in terms of when you want to start it (now or in 2 years), and how much money you have set aside, and how long it's going to last."
"I've advised more than a few of my clients (the younger ones) to start by getting hired by a similar business, so you get the inside story. Don't look at it as a job, look at it as an investment in a learning experience that lowers your risks."
I have heard other entrepreneurs say much the same about a job. Basically, don't take one unless you are going to learn a skill. I met a lovely young woman that has a university degree and is interested in international affairs and security issues. Currently, she cleans hotel rooms. We didn't quite get to a comfortable point in the conversation where I could grill her about what she is learning from the job. I am of the belief that you could learn something from it, if you tried. Attention to detail, what makes a good hotel room cleaning, what makes for a good cleaning crew, how you manage a hotel cleaning crew. I wouldn't be terribly excited to do that work again myself (I have in the past) because I really don't like the hospitality industry.
My friend closed with these questions:
How does one know what market demand exists?
His response was something like as follows. As matter of fact it was pretty darn close to this. "Usually you start with an idea, and then you try to qualify the market. If it's retail, it's mostly location (zipcode) and demographics (including age, income, education, gender, religion, family situation, disability, profession, politics). If it's business to business, it's the type of business and precise industry. If you say 'healthcare' or 'IT' that is too vague. the size of the business (revenue), and sometimes the location. Competitive analysis is critical."
I have heard other entrepreneurs say much the same about a job. Basically, don't take one unless you are going to learn a skill. I met a lovely young woman that has a university degree and is interested in international affairs and security issues. Currently, she cleans hotel rooms. We didn't quite get to a comfortable point in the conversation where I could grill her about what she is learning from the job. I am of the belief that you could learn something from it, if you tried. Attention to detail, what makes a good hotel room cleaning, what makes for a good cleaning crew, how you manage a hotel cleaning crew. I wouldn't be terribly excited to do that work again myself (I have in the past) because I really don't like the hospitality industry.
My friend closed with these questions:
"- What are you professionally really good at (non-military).
- Do you have a strong personal interest? Some like a hobby or politics, a strong ethical view of something you want to change, or some lifestyle desire."
Because if you are going to spend so much time working and not necessarily with your family, you might as well feel worthwhile.
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