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© Copyright 2018, CMS, Inc.

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By Jeff Williams



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Jeff Williams & Bizstarters.com

Jeff Williams is a nationally-known business start-up coach and CEO and the chief coach for the Virtual Incubator Coaches Network, a nationwide provider of business start-up coaching to individuals over age 50. He is widely quoted on boomer entrepreneurship in such business websites as forbes.com, businessweek.com, INC.com and NextAvenue.org. Bizstarters.com has been selected by the editors of Kiplinger’s Personal

Finance magazine as “The Best Entrepreneurial Guide for People over 50”. The company has been coaching new Boomer entrepreneurs since 1992 and to date has served more than 1,500 clients. Jeff has written eleven workbooks, guides and DVDs about business start-up, including his latest: “Start Your Business NOW!” Before starting his first business at age 40, Jeff spent eighteen-years as a corporate sales and marketing executive with Corning, Sears, Rand McNally and Kenlin Enterprises. He launched two additional businesses after age 50. Jeff holds a MBA in marketing from the Kellogg Graduate School of Management at Northwestern University and BS in Commerce from the McIntire School of Commerce at the University of Virginia. Go Smart Publishing div. of CMS, Inc. Distributed through Bizstarters.com and Affiliates Jeff Williams, CEO 126 E. Wing Street, Suite 321 Arlington Heights, Illinois 60004 847-305-4626



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Table of Contents

You are closer to a great business idea than you think How I found my first business idea What defines a “great business idea”? Step 1: Match your interests to your experience Step 2: Evaluate your results Step 3: Turn a good work match into a business concept Step 4: Review the business start-up options Step 5: Discover the risks and rewards of specific business ideas Step 6: Evaluate the financial potential of your top idea Step 7: Assess your financial risk & minimize it Appendix A: Using Trends to Power Your Business Resources



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You Are Closer to a Great Business Idea Than You Think

My coaches and I run across individuals every day who when they talk about becoming their own boss

there is a real sense of enthusiasm in their voice and a gleam in their eye.

And yet, more often than we would like to see, we discover by following up these people a few months

after we first talk to them that some have taken absolutely no step forward to seriously examine an

entrepreneurial option for making money.

We, of course, want to know why and so we ask these folks this question: “what is the number one

reason you haven’t moved forward on your desire to become your own boss?”

And guess what they most often reply: “I just can’t seem to focus on a business idea that suits me”.

We understand that if you aren’t confident that you have a specific business concept that you believe

will make money that you’re going to be cautious about investing your time and particularly your money

in taking any further action.

Well, we have very good news to share with you!

At this point in your life, you’ve most likely been working for at least 10-15 years, probably in a series of

jobs. On each job, you’ve learned how to do at least one thing really well (it might be taking vacation

days!).

Some of you have focused so seriously on one particular capability that you have become “industry

experts” in that topic. You may have even won awards for doing this kind of work.

There’s another side to this also. Unless you’re a fanatic workaholic you’ve also had some kind of life

outside of work.

If your schedule has permitted it, you may have donated hundreds of hours of your time as a volunteer

to one or more deserving groups (I favor Little League and Habitat for Humanity myself). And so you’ve

built a reservoir of skills from your volunteer work, such as organizing groups of people, fundraising, or

getting publicity for the group. Because you haven’t done this work for money, you may have not

emphasized an important talent in your mind…you’ve just taken for granted how capable you are.

I have designed the Earn Big from You Already Know workbook to give you an easy path to re-examine

each and every aspect of your working life, volunteer life and even your hobby life to see where you can

possibly connect what you love to do, and are very good at doing, with what people or businesses will

pay you for providing.

It will most likely take you a couple of sessions to work through the complete workbook. But, don’t rush

and don’t put any pressure on yourself. Work in a relaxing place at your desired pace and you’ll be

rewarded with an eye-opening results as you discover “that you have more business ideas than you

think”.



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How I Found My First Business Idea

My mother and grandmother were both teachers. And a very important thing they taught me

growing up was that it is not enough to gain new knowledge…you need to share it with others

to improve their lives also.

Inspired by this philosophy, I started as a volunteer teacher as a teenager.

First, it was swimming lessons for toddlers. Then when I was in high school, I taught sports in

the inner city of Washington, D.C. In college at the University of Virginia, a group of us tutored

local kids in reading. I had to beg off of volunteering for a couple of years right after college

because I was a salesman with a large territory and I couldn’t accurately predict when I would

return home each week.

But in my early twenties, I moved to Chicago to go to graduate business school, where I met a

number of activist classmates who introduced me to a tutoring program for minority kids at one

of the really large churches in downtown Chicago. Next, I taught in the “Each One, Teach One”

program where we offered English training for Spanish-speaking adults

You may be wondering what this all has to do with me finding my perfect business idea.

Well, as I mention several times further into this workbook, the key to finding a business idea

that fits you well is to start with your passion…what do you really love to do, or at least like a

lot.

In my case, by the time I was in my late twenties I knew for sure that I loved to teach. But, I was

so busy in my thirties building my corporate career that I put the idea of teaching for a living

into the back of my mind.

But, sometimes you think you are securely on your way up in the corporate world, and

suddenly fate intercedes.

In my case I received a big smack across the face when I was very unexpectedly fired at age 32

from a corporate marketing job. This incident turned out to be a teachable moment for me,

specifically: (1) I learned that you can only rely upon yourself to assure your career; (b) I learned

that it takes just one person to remove you from any job (and if you have a personality conflict

with that person it will happen sooner than later); and (3) it gave me time to think about where

I really wanted my life to go.



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During my five months of unemployment in my mind I kept coming back to my childhood

experience as an “accidental entrepreneur” at age ten when my slate of three weekly lawn

mowings exploded into forty lawns per week and suddenly I had a “business” (this is a story for

another time).

I remembered the pride I took in doing good work and being highly reliable. I thought about

how I hired a couple of my Little League buddies to work for me… and had to fire one of them

for not showing up for jobs! And I certainly remembered the $1500 in my bank account at the

end of the summer.

I was let go in early May, just when the temperature starts to get consistently above 70 degrees

in Chicago, and so I treated my first two months like a vacation and spent a lot of time lying on

the beach as the waves of Lake Michigan lapped over my toes.

This was the most relaxed I had been in years. I was fired up to really dig into this

entrepreneurial thing, but a major shortcoming quickly appeared. I had only worked for very

large companies – Corning and Sears to name two – since leaving college and I wasn’t sure that

I really understood what it took to plan, launch and run a profitable small business.

So, I made a plan to search for a very different next job – one with a small, entrepreneurially

run company where I could experience the full range of work – marketing, operations, finance,

mergers, vendor development, etc. I landed with a six million dollar privately owned

manufacturer of furniture hardware and an importer of wood furniture parts. The owner lived

in Aspen and relied upon myself and two older colleagues to run the company for him. Each

new task I approached with the mindset of asking myself what specific skills it would teach that

I could use later to run my own company.

In my free time, I tinkered on paper with my “teaching company” and filled in quite a few

details but still lacked the core business concept.

It was the experience of two MBA friends that helped me “fill in the blank” about my core

concept.

One of the friends had left his corporate career to launch a sporting goods store in Northern

Virginia. He knew quite a bit about sports, but much less about retail. And unfortunately, within

eighteen months he was forced to close the store.



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My second friend went from corporate finance manager to owner of a commercial cleaning

franchise. He misread the competition in his local market and having used every cent of his

savings to pay the franchise fee and equipment cost, he started with insufficient funds for

promoting his business. Within two years, he sold the franchise for a loss and returned to the

corporate world.

I shared the emotional ups and downs with both friends, and I analyzed each business failure to

see if there were commonalities I could learn from.

What I discovered was that neither friend had completed a proper business plan and neither

hooked up with an experienced business person to help coach them through their business

problems. They were victims of two common business management blunders: (a) the ‘Lone

Ranger Syndrome (was Tonto a partner?)”; and (b) “Ready, Shoot, Aim”.

As I thought about this, I realized that I had accumulated quite a bit of experience in both

business planning and in quickly assessing business challenges and figuring out street smart

solutions.

I thought: “If only my two friends had had access to a business start-up consultant and coach

like me, they’d likely both still be in business”.

The light went on in my head: “I will launch a company to provide business start-up planning

and coaching to entrepreneurial people in my age group (I was almost forty at that point, and

according to the Census there were more than 3.5 million other people turning 40 that year).”

I spent a lot of my free time during my 39th year working on the business plan for my

entrepreneurial training company, and in June 1988 (a month before my 40th birthday), I

launched the Go Smart Business Start-Up Center out of my living room in suburban Chicago.

Let’s get you started on the path to finding the right match for you.



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What Defines a “Great Business Idea”? In my corporate career I held nine different jobs with four separate employers. I thought some of these job responsibilities were ok. A couple assignments were miserable and two were great. I don’t know whether I am statistically below average in “great jobs”, but what I do know is that over a twenty-five-year-plus corporate career, most of us “win a few and lose more” when it comes to job satisfaction. I have found relatively few corporate refugees who enjoyed each and every job they had. So, I am particularly pleased to report that for perhaps the first time in your work life, you now have the chance to create a job you love every day! Traits of a “Great Business Idea”

Trait #1 – It is an idea that matches your interest and skills together - something you really enjoy doing and do well.

Trait #2 – It is an idea about which you know enough to be able to identify at least important problem you can solve with your skill.

Trait #3 – It is an idea with which you are experienced in performing the “nuts and bolts” of the business -- or can learn how to do so.

Trait #4 – It is an idea for which you can afford the start-up expenses without having to pledge key assets (such as your house) to raise cash.

Trait #5 – It is an idea that promises you a financial return that is attractive in comparison to other comparable uses of your money (such as investing in stock).

Trait #6 – It is an idea that you can either run by yourself the first year or with the use of limited outside labor.

Trait #7 – It is an idea where you will enjoy the type of customers you will attract. Not everyone, for example, likes the chitchat of a retail store.



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Step 1 Match your interest to your experience Start With What You Love Doing … But Make Sure You Are Also Very Good At It! Now, there are most likely a number of activities that you like well enough to try to turn into a

business. And this is exactly where you should start to find your ideal entrepreneurial lifestyle –

by evaluating what activities you really enjoy doing. But, people won’t pay you for what you do

simply because you have joy doing it! You must also be good enough at doing the activity you

choose to be able to solve the problems and meet the needs of your intended customers.

Since you are most likely somewhat capable at doing a number of different activities, this series

of checklists is designed to permit you to review a large number of work activities quickly and

rate each by checking one of three boxes for each – “low”, “medium” or “high” interest in each.

There are more than sixty different work tasks shown, arranged in alphabetical order.

Now, it may seem like it will take a long time to go through all of these tasks.

Not so, if you really follow your “gut” feeling for each – don’t ponder any given task, just read it,

respond in your mind and heart and place your checklist. The work you really enjoy doing will

always generate a strong emotional response inside you, particularly if much of your corporate

employment has not allowed you to do this kind of work.

Next, after you have read through each work task and checked at least one rating box for each,

return to those you rated with a “5”, meaning a high level of interest by you.

The next step is where you must inject a strong dose of honesty with yourself. For each work

task you really enjoy doing, how talented do you think you are in doing it?

The key to success in growing a new company is that you can offer a superior solution to

someone’s problem or need, not just an adequate solution.

Let me use myself as an example.

I am quite good at washing dishes and cleaning up the kitchen. But, I do not enjoy doing this

enough to try to build a business around it. And, I really enjoy building things, but I am far from

good enough a carpenter to make a living building things.

The good news is that if you are like most of the people who complete this checklist, you have a

“high interest” and “high skill” match on at least several different work tasks, so you have some

choice on possible directions for your business.



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The Interest-Experience Checklists

Directions 1. Read through the various work-related activities listed on the following pages. 2. Next to each activity indicate two ratings by placing an X in the appropriate box: Your level of interest – 1 = low interest 3 = medium interest 5 = high interest Your level of experience – 1 = low experience 3 = medium experience 5 = high experience

Checklist 1 - Consumer-oriented activities

Interest Low = 1

Med = 3

High = 5

Experience Low = 1

Med = 3

High = 5

Alternative health services

Antique selling

Appliance repair

Architecture/historical renovation

Auto accessories sales

Auto repair

Beauty accessories & care

Boat sales, accessories, facilities

Book sales

Buying & Selling (eBay, auctioning, etc)

Career counseling

Child care & entertainment

Children clothing, accessories, toys



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Interest

Low =

1

Med =

3

High =

5

Experience

Low =

1

Med =

3

High =

5

Children, instruction

Clothing retailing

Clothing cleaning & repair

Coaching, personal & business

Computer sales & maintenance

Community service

Counseling, Psychological

Drawing, painting, sculpting

Electronics

Entertainment

Exercise & fitness

Farming/ranching

Financial planning & services

Flower & plant sales and maintenance

Food retailing/mail order

Furniture mfg. & repair



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Interest Low = 1

Med = 3

High = 5

Experience Low = 1

Med = 3

High = 5

Gardening & horticulture

Genealogy

Gift mfg & Retailing

Hardware/tools

Healthcare/ wellness

Home & office cleaning

Home decorating/ interior design

Home improvement & repair

Home inspection

Hotel/B&B

Insurance

Investor

Landlord

Languages

Music retailing & mail order

Organizer

Outdoors

Performing arts



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Personal services

Interest Low = 1

Med = 3

High = 5

Experience Low = 1

Med = 3

High = 5

Pets & pet accessory sales

Photography

Politics/public policy

Public speaking

Real estate

Religion

Restaurant & bar

Sports & recreation

Technology

Textile & jewelry Design

Travel & touring

Wine

Trainer/and or teacher

Writing & Publishing



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Additional Activities You Really Love To Do If I forgot to list one or more activities you really love to do (those you would give a “5” Interest rating), please add it (them) below.

Proceed to Corporate and Business-Related Activities



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Checklist 2 - Corporate & Business-Related Activities Interest Low =

1 Med =

3 High =

5 Experience Low =

1 Med =

3 High =

5

Accounting/ Bookkeeping

Business Plan Writer

Collection Agency

Computer Consulting

Copywriting/ Editing

Employment Agency

Engineering/ Science

Environmental Consulting

Event Planner

Facility cleaning/ Maintenance

Financial Management

Graphic Design

Import/Export Consulting



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Interest Low = 1

Med = 3

High = 5

Experience Low = 1

Med = 3

High = 5

Information Research

Mailing List Service

Marketing Planning

Market Research

Media/ Publishing

Personal Coach

Publicity

Trade Show Consultant

Trainer

Additional Activities You Are Really Good At Doing If we forgot to list one or more activities you are really good at doing (those you would give a “5” Interest rating), please add it (them) below.

Proceed to evaluate your results.



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Step 2

Evaluate your results

Well, you’ve completed rating more than sixty consumer-oriented work tasks and several dozen corporate tasks. You should know have accumulated a number of “5”-“5” matches between tasks of great interest and great skill. Before you started working on the Interest-Experience Checklists you may have had one particular business idea floating around in your head. It should be interesting to see if the kind of work this type of business does matches one or more of your chosen work tasks. For your convenience, I’ve included a table on the next page into which you can write the titles of work tasks you rated “5” in interest and then “5” in experience and skill. If you’ve been honest with yourself, you see at least one strong match. I’ll explain in a bit how to proceed from the results in the table. So, onto the next page…



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How to Evaluate Your Results

1. Return to the preceding checklists and find all of the activities that you rated with a “5” for your level of interest. Write them in the table below.

2. Next, go over the checklists and write in the table below all of the activities where you rated your experience level to be a “5”.

3. Look for matches between activities you rated a “5” for interest and also evaluated your level of experience as a “5”. There are normally several matches.

4. The activities where you achieved a match between your level of interest and your degree of experience are excellent starting points for you to explore as sources of business opportunities.

Things I Really Enjoy Doing

Things I Am Really Good At Doing

One last “honesty” check Do you have enough experience to honestly evaluate how much you enjoy each of these matches? Are you really very capable in each of these proposed matches? (For example, have others said that you are really quite competent in the activity?).



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Step 3 Turn a good work match into a specific business concept You’ve discovered what kinds of work activities you like and are good at. But, you’re likely wondering: “how do I turn my desired work into a specific type of business?” There are a wide variety of ways to bring a specific work skill to life as a business enterprise. Let me share an example with you. Let’s say that you both really enjoy and are very good at gardening. Here are some business types (known as “business models”) that you could use: 1. Provide hands-on gardening and landscaping services. 2. Offer gardening workshops for a fee. 3. Write and sell a book or workbook on a specific aspect of gardening. 4. Sell gardening clothing and supplies. To help stimulate your thinking about what type of business you can, I have collected together forty different business opportunities that we have worked with over the past twenty-four years. I’ve included a space below each business description for you to write in your thoughts. Take your time in reading over each business description and see which ones “speak to you”.



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40 Ways to Find a Great Business Idea™

1 What skills can you sell as a freelancer? EG: Accounting, computer programming, project management. _____________________________________________________________________________ 2 What opportunities does your current employer seem to be missing in the marketplace? EG: Custom orders for draperies, pneumatic accessories for forklift trucks, refurbishing services for used equipment. _____________________________________________________________________________ 3 What skills can you sell to your current employer? EG: Total quality training, bookkeeping. _____________________________________________________________________________ 4 What consulting projects might you complete for your current employer? EG: Annual report design, electronic cash register installation. _____________________________________________________________________________ 5 What products could you possibly sell to your current employer? EG: Computer software, mobile snack service. _____________________________________________________________________________

6 Do you have a hobby product that you can offer as a business? EG: Christmas decorations, gift baskets, baby cradles. _____________________________________________________________________________ 7 Do you do something as a volunteer that others would pay for? EG: Transportation for medical appointments, meeting planning. _____________________________________________________________________________



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8 Is there a service you need personally that you cannot find? EG: Taking kids to after school activities, finding odd pieces of china. _____________________________________________________________________________ 9 Can you provide a product or service your friends can’t find? EG: Home delivery of live seafood, pet sitter. _____________________________________________________________________________ 10 Could you sell an improved version of an existing product or service? EG: Baby carrier or toothbrush products, grocery-shopping service. _____________________________________________________________________________ 11 Have you invented a product for which you can document market demand? EG: New medicine cabinet, accounting software for non-profits. _____________________________________________________________________________ 12 Is population growth in your area creating new business opportunities? EG: Laundromat, locksmith, home health care products store. _____________________________________________________________________________ 13 Do you see an opportunity for a new franchised business in your neighborhood? EG: Quick sign shop, mailbox store, children's play area. _____________________________________________________________________________ 14 Do you have the experience and knowledge to buy an existing business? EG: Dry cleaner, greeting card shop, home security installer. _____________________________________________________________________________



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15 Do you know of opportunities to sell to local, state or federal government? EG: Office furniture, time management training, construction services. _____________________________________________________________________________ 16 Is there some kind of knowledge or information you have that others might pay for? EG: Stock picking tips, trout fishing techniques, job application verification. _____________________________________________________________________________ 17 Can you do something with computers that others would pay for? EG: Install wireless networks, broker used computer equipment, medical billing. _____________________________________________________________________________

18 Do you know how to do something in telecommunications that others would pay for? EG: Business phone installation, cellular phone sales, private pay phones. _____________________________________________________________________________ 19 Do you have a manual skill that others would pay for? EG: Bricklaying, woodworking, stained glass design and installation, asphalt paving. _____________________________________________________________________________ 20 Are you especially talented in working with children? EG: Computers for pre-schoolers, music lessons, tutoring, special field trips.

_____________________________________________________________________________ 21 Are you experienced and talented in teaching/training?

EG: Foreign languages or English, space organization, job social skills. _____________________________________________________________________________ 22 Do your friends rave about your cooking or baking?

EG: Wedding cakes, ethnic breads, chocolate specialties.



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_____________________________________________________________________________ 23 Are you talented at organizing?

EG: Time management, seminars, keeping your budget straight, controlling the family budget. _____________________________________________________________________________ 24 Are you an experienced salesperson? Could you become an independent sales rep? EG: Industrial safety products, metal stampings, clothing for the larger woman.

_____________________________________________________________________________

25 Are you experienced at importing or exporting? In what product areas? EG: Scientific equipment to Eastern Europe, hand-carved decorations from Asia, used lathes to India. _____________________________________________________________________________ 26 What knowledge can you turn into a booklet, guide or special report? EG: Internet marketing, parenting of special needs children, genealogy. _____________________________________________________________________________ 27 Are you really good at financial planning and management? EG: installing and using Quicken, reviewing health insurance options, saving money buying and repairing cars. _____________________________________________________________________________ 28 Do you possess talent in graphic or fine arts design? EG: Designing websites, painting decorative murals, custom painting of clothing. _____________________________________________________________________________ 29 Do you have special business management skills? EG: Recovering from a business disaster, recruiting hard-to-find employees, negotiating trade deals in Asia.



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_____________________________________________________________________________ 30 Are you particularly adept at home repair or maintenance? EG: Handyman services, brick sidewalk construction, inside telephone and computer wiring. _____________________________________________________________________________ 31 Do you have a talent for tasty cooking?

EG: Gourmet chef to go, catering, pre-cooked meals. _____________________________________________________________________________ 32 Do you have a special gift-related idea? EG: Talking pictures, drawings of pets, rustic picture frames.

_____________________________________________________________________________ 33 Are you good at fashion work? EG: Professional clothing shopper, jewelry appraiser, distinctive window treatments.

_____________________________________________________________________________ 34 Have you gained legal knowledge that can help others? EG: Negotiating credit payments, finding abandoned property, locating government grants.

_____________________________________________________________________________ 35 Are you talented in buying and refurbishing people’s possessions? EG: Antique renovation, photo retouching, oriental carpet repair.

_____________________________________________________________________________

36 Do you know a lot about business security?

EG: Investigating job applicants, setting up commercial security doors and cameras, protecting trade secrets. _____________________________________________________________________________



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37 Can you sell your talent in a sport? EG: Rock climbing trips, running soccer camps, a guide to the NFL for women. _____________________________________________________________________________ 38 Do you have experience in New Age disciplines? EG: Fung Shui consulting, spiritual readings, past-life regression analysis. _____________________________________________________________________________

39 Can you assist people in buying a home? EG: Home inspecting, discount decorating, finding local home services. _____________________________________________________________________________

40 Do you have a particular talent working with pets? EG: Dog breeding, fashion accessories, pet photos. _____________________________________________________________________________

Summarize Your Results

Use the table below to list one-three business styles (based on your experience and/or choosing from the 40 shown previously), and indicate for the ones selected, why you feel they offer a good fit to you.

Business Concept Description Why Selected



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Step 4

Review the business start-up options Ok, now you’ve found several activities that you are both good at and enjoy a great deal. And, you’ve turned one or more of them into a specific business concept. If you liked what you read, you’re most likely eager to move forward. How do you proceed from here?

You review the most popular business forms that are being used today and you select one or two ways you can launch your business. This broad categories of business organization are known as “business models” which means different processes for generating revenue. It is not uncommon today to see a new business combining several business models in one business. Let me use my business as an example. I combine the following revenue sources into one legal entity: 1. I provide consulting services. 2. I provide start-up services such as logo and website design (I use an outside network of experts to provide the services, but I supervise the process for each of clients). 3. I write, publish and print books and workbooks and offer them to the public both through an e-commerce website and through volume sales to corporate buyers. 4. I organize live workshops and teleseminars and sell places in them. Directions As you read through each description, check off the one(s) that are most attractive to you.



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Product Manufacturing (Category 1) You combine raw materials into a finished product and you sell it to other businesses, to distributors, to retailers, to the government or direct to the public. Examples

Barbecue sauce, beaded jewelry, baby cribs, auto accessories

Keys to Success

Knowledge of “nuts and bolts” of manufacturing, experience working raw materials, finding right contract manufacturer helpful.

Investment

$5,000 - $50,000+

Return

45%+ profit per sale

To Start

Suppliers are critical to success

Rate This Opportunity

1 = not attractive 3 = somewhat attractive 5 = very attractive



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Distribution (Categories 2 & 3) You purchase a line of finished product from one or more manufacturers and sell it to businesses, the government, or to consumers. Category 2 - Wholesale Selling

Examples

Baked goods, antiques, vending machines

Keys to Success

Selling experience, quick response on new, hot items

Investment

$1,000 - $30,000+

Return

$30,000+ per year

To Start

Useful to have list of retailers for your category.



Category 3 - Industrial Distribution

Examples

Fire extinguishers, printing supplies, mechanics tools

Keys to Success

Excellent product knowledge, selling skills, good suppliers

Investment

$5,000 - $100,000+

Return


To Start

Often work for a distributor before going out on own





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Retailing (Categories 4, 5, 6 & 7) You purchase a line of product from either manufacturers or distributors and sell it directly to the public. Category 4 - Retail Food Service

Examples

Hot dog stand, pizzeria, sit-down restaurant

Keys to Success

Tasty recipes, tight expense control, smart hiring process, advertising!!!

Investment

$5,000 - $200,000+

Return

$50,000+ per year

To Start

Previous restaurant work helpful



Category 5 – Retail Store

Examples

Imported foods, rubber stamps, pottery painting

Keys to Success

Product knowledge, good location, marketing imagination, good employees

Investment

$10,000 - $100,000+

Return


To Start

Previous retail experience good





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Category 6 – Internet Store

Examples

Vintage baseball clothing, garden accessories, Radio Flyer wagons

Keys to Success

Well-defined product niche, customer-friendly Web site design, value-added content

Investment

$500 - $5,000

Return


To Start

Product knowledge is key. Web design can be bought.



Category 7 – eBay Seller

Examples

China, collectibles, comic books

Keys to Success

Know resale prices cold, good copywriting, appear trustworthy

Investment

$500+

Return

$500 – $3,000 per month

To Start

Need reliable sources for products first. eBay system helps with the rest





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Service Provider (Categories 8, 9 & 10) You sell your time, knowledge, experience and possibly physical labor. Category 8 - Personal & Household Services

Examples

Hair care, massage therapist, dry cleaner, landscaping

Keys to Success

Proper training and licenses, stamina, excellent people skills

Investment

$40 - $10,000+

Return

$25,000+ per year

To Start

May require state licensing. Can start as subcontractor and then go out on own



Category 9 – Business Services

Examples

Quick printing, office supplies, graphic design

Keys to Success

Good list of leads, technical/computer skills, proper equipment

Investment

$500 – $10,000+

Return

$40,000+ per year

To Start

Often go from employee in same business to own business





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Category 10 - Consulting

Examples

Computer systems, strategic planning, human resources

Keys to Success

Solid resume in chosen industry, specialized training, “name dropping”

Investment

$100 - $5,000

Return

$20,000 - $100,000+ per year

To Start

MBA, professional association memberships, former employer as first client



Summary

Insert the title for the top 1-3 Business Profiles you selected as “5 = very attractive”. If you

selected more than, place them in the table below in order from most attractive to less

attracting



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Step 5

Discover the risks and rewards of specific kinds of business You’re now at the point where you can write down one or more specific descriptions of potential business concepts that you feel fit you well. And you’ve now selected one or more business models that you feel will work well for selling your product or service. It is logical for your next step to be to evaluate the investment of time and money each concept may require and the relative financial return it may offer. I have used accumulated data on a wide variety of business concepts to give you a quick overview of the risks and rewards of each. In the tables on the two following pages, you will find the title of the business concept to the left, followed by numerical ratings in each of four columns. The rating categories are:

Dollars to start the business

Dollars of potential profit

Time demands

Flexibility of schedule. The range of business concepts is fairly wide and hopefully a concept close to the one you are chewing over appears. If not, using these four rating criteria is an effective way to organize some research on your own about your desired business concept.



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Business Profiles Legend Rating Title

1 Rating =

3 Rating =

5 Rating =

$ To Start

Under $5,000

$5,000 – $25,000

Over $25,000

$ Return (Sales)

Under $10,000/yr

$10,000-$25,000/yr

Over $25,000/yr

Time Demands

Under 8 hours/wk

8 – 24 hours/wk

Over 24 hours/wk

Flex Schedule

Very Inflexible

Somewhat Flexible

Very Flexible

Business Title

$ To Start

$ Return

Time Demands

Flex Schedule

Ad agency 5 5 5 1

Alternative Health Provider

1

3

5

3

Antique mall kiosk 1 3 1 1

Antique store 5 5 3 3

Appliance repair 1 3 3 3

Bed & breakfast 5 3 5 1

Book publisher 1 3 3 3

Cake maker 1 3 3 3

Campground 5 5 5 3

Pet Kennel 3 5 5 1

Coin-Operated Laundry

5

5

3

3

Consultant 1 5 3 3

Counselor 1 3 3 3

Craft shop 3 5 5 1

Craftsperson 1 3 3 3

Executive search firm

5

5

5

1

Exercise instructor 1 3 3 3

Florist 5 5 5 1

Freelance Writer 1 3 1 5



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Business Title

$ To Start

$ Return

Time Demands

Flex Schedule

Furniture maker 3 5 3 3

Gift baskets 1 3 3 5

Gourmet Food Store

5

5

5

1

Graphic design firm

1

5

5

3

Hardware store 5 5 5 1

Home buying parties

1

3

3

5

House Renovator 3 5 5 1

Import Business 5 5 3 3

Information Service

1 3 3 5

Insurance agency 5 5 5 1

Interior decorator 1 5 5 3

Jewelry Designer 1 5 3 5

Landlord 5 5 3 3

Mail-Order Business

3 5 3 3

Massage therapist 3 5 5 3

Music lessons 1 3 3 3

Legend Rating Title

1 Rating =

3 Rating =

5 Rating =

$ To Start

Under $5,000

$5,000 – $25,000

Over $25,000

$ Return (Sales)

Under $10,000/yr

$10,000-$25,000/yr

Over $25,000/yr

Time Demands

Under 8 hours/wk

8 – 24 hours/wk

Over 24 hours/wk

Flex Schedule

Very Inflexible

Somewhat Flexible

Very Flexible



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Business Title

$ To Start $ Return Time Demands

Flex Schedule

Novelist 1 3 3 1

Newsletter publisher

1

3

3

3

Non-profit Organization

3

3

5

3

Plant/Flower grower

3

5

5

1

Painter 3 5 5 1

Personal Financial consultant

3

5

5

3

Pet Groomer 3 5 5 1

Photographer 3 5 3 3

Real Estate Agent 1 3 5 1

Restaurant Owner 5 5 5 1

Second-Hand Clothing Store

3

5

5

1

Seminar Leader 1 5 3 3

Small Scale Farming

5 3 5 1

Specialty Bookstore

5 5 5 1

Tax Preparer 1 5 3 3

Tour Guide 1 3 3 3

Video Services 3 5 3 3

Legend Rating Title

1 Rating =

3 Rating =

5 Rating =

$ To Start

Under $5,000

$5,000 – $25,000

Over $25,000

$ Return (Sales)

Under $10,000/yr

$10,000-$25,000/yr

Over $25,000/yr

Time Demands

Under 8 hours/wk

8 – 24 hours/wk

Over 24 hours/wk

Flex Schedule

Very Inflexible

Somewhat Flexible

Very Flexible



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Record your top three choices based on your rating selections: Directions: Write in the numerical descriptions for each business style you’ve selected.

Business Title

$ To Start $ Return Time Demands

Flex Schedule



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Step 6 Evaluate the financial potential of your top rated business idea The single most common question we are asked by prospective new business owners is: “How much money can I make turning my business concept into a functioning business?” You can use the following 5-step concept evaluation process shown below to gauge the financial return of your most highly rated (possibly your only) business concept.

Step One Define a Problem You Can Solve

Step Two Identify Revenue Sources

Step Three Define the Resources Required

Step Four Describe the Financial Return

Step Five Rate Each Revenue Source & Prioritize Note: To see our business concept assessment process in action, read over the case study which follows.



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The Challenge: How to make a living from knowledge of hiking. Step One - Define the need to be satisfied or problem to be solved. From his experience as a serious recreational hiker, Tom had learned that a good number of people get into trouble when hiking because they are inexperienced, not trail savvy and/or use inappropriate equipment. Step Two - Determine the different opportunities that arise from the identified problem/need. Tom used his experience, personal interests and some research to identify three possible initial business opportunities: #1 - Write hiking guide books #2 - Organize and lead hiking trips #3 - Distribute specialty hiking equipment Step Three: Part One - Determine the resources required to bring each opportunity to life: #1 - Writing Books Needs: Writing Skills Money to Print Books - est. $5,000 Retail & Online Locations to Carry Books #2 - Leading Trips Needs: Knowledge of a variety of major trails Permits from U.S. Forest Service Money - est. $25,000 - $30,000

How to Financially Evaluate Your Business Concept A Case Study “The Hiker”



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#3 - Sell Specialty Hiking Equipment Needs: Knowledge of European Manufacturers Money - est. $100,000 Distribution Agreement Step Three: Part Two - Evaluate Needed Resources vs. Available Resources. 1. Tom isn’t very confident as writer, would have to hire “ghost writer” which would cost up to $5,000 additional. 2. Permits from U.S. Forest Service hard to get. Politics sometimes involved and long waiting list. 3. Not easy to convince large European manufacturer to sign exclusive distribution deal with new, untried company. Step Four - Determine the Expected Financial Return for Each Opportunity #1 - Writing Books This type of book could sell for $24.95 retail, with 45% minimum discount for wholesale cost. This leaves $13.70+ of revenue per book. 200 page book would cost about $5 - $7 each to print, which leaves $8.70 - $6.70 each per book in profit. #2 - Leading Trips Cost to equip for one season could run $25,000 - $30,000 plus 50% more for operating costs and $3000 per permit. Can charge up to $2,000 per person per week for escorted trip. #3 - Distributing Equipment Most likely require at least $100,000 in cash and credit lines to attract manufacturer, plus a solid plan to attract at least 100 retailers to agree to carry line. Estimate $20,000 additional for marketing and promotion to locate and convince these retailers. Product categories being considered have average retail selling price of $300+ with $100 - $150 in profit per unit sold.



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Step Five - Compare the Resources Demanded and the Expected Return of Each Opportunity. You can use a 1-5 scale for initial evaluation (1= low level of resources or return; 5 = high level of resources or return). When one is selected, you must determine through experience and research actual dollars of cost, sales and profit. Opportunity #1 - Write Books Resources: 1 (3) 5 Return: (1) 3 5 Opportunity #2 - Lead Trips Resources: 1 3 (5) Return: 1 (3) 5 Opportunity #3 - Distribute Equipment Resources: 1 3 (5) Return: 1 3 (5) PS. Tom decided to become the Eastern U.S. distributor for two lines of European-made climbing and hiking gear.

Note: You can perform a “quick once over” review of your number one business concept by using the worksheet on the next page.



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Evaluate Your Business Concept Step One - Define the need to be satisfied or problem to be solved.

Step Two - Determine the different opportunities that arise from the identified problem/need.

Step Three: Part One - Determine the resources required to bring each opportunity to life:

Step Three: Part Two - Evaluate Needed Resources vs. Available Resources.



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Step Four - Determine the Expected Financial Return for Each Opportunity

Step Five - Compare the Resources Demanded and the Expected Return of Each Opportunity. You can use a 1-5 scale for initial evaluation (1 = low level of resources or return; 5 = high level of resources or return). When one is selected, you must determine through experience and research actual dollars of cost, sales and profit.

Opportunity #/Description Resources Rating 1-3-5 Return Rating 1-3-5



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Step 7 Assess your financial risk…and minimize it Before you start to invest your time and money into bringing your business concept to life, it is a good idea to rate yourself on a series of risk-oriented characteristic Directions Place a checkmark on one of the choices on the same line as each characteristic. Add up the points for all the boxes you check. See the bottom of the page for the scoring key.

Experience selling

Little = 3 Some = 2 A Lot = 1

Experience working with suppliers


Experience in business management


Knowledge of computers


Need for space outside of house

Yes = 3 No = 1

Need to maintain inventory

Yes = 3 No = 1

Need at least one employee

Yes = 3 No = 1

Need for tools, equipment, etc.


TOTAL POINTS

There is no precise formula for absolutely predicting your financial risk in advance of launching your business. But based on my experience in working with hundreds of new business owners, I can predict a greater financial risk the higher your rating score. See the next page for suggested ways to reduce your financial risk.

Scoring Key

10 points or less Relatively low financial risk

11 – 17 points Relatively moderate financial risk

18 points or more Relatively high financial risk



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Ways to Reduce Your Financial Risk If your financial risk assessment score was 18 or above, you are obviously facing relatively more financial risk in starting your own business than someone with say a score of 10 or less. But the good news is that if you give yourself enough time, you can significantly reduce a high financial risk rating. Here are some suggested steps you can take.

Need selling experience? Find a part-time job in a retail store where you get the chance to perfect your selling skills while getting paid. With the extreme shortage of reliable retail workers today, you can often demand a schedule that is most convenient for you.

Inexperienced dealing with suppliers?

Look around for a friend or neighbor who is remodeling their house and volunteer to help them find and work with their service providers.

A bit weak in the nuts and bolts of business management?

Go to your local library and check out a couple books on running a small business. Skim over the descriptions of the basic small business management tasks.

Has the computer revolution passed you by? Take an introduction to personal computers class. Most community colleges and many larger libraries offer such classes for attractive prices.

Require business space outside of your home?

The key to reducing your financial risk here is to take your time looking around. You can often reduce your rent substantially by selecting a location a bit off of the beaten track.

Need to have inventory to satisfy your customers?

A smart way to reduce your inventory-related risk is to locate suppliers who can ship on short notice the key products you sell, so that you can maintain the minimum inventory.

Think you need another set of hands to help?

Before you hire an employee, ask yourself: what exact jobs do I need to be done? If the work you need done can be completed on a somewhat flexible schedule, you may be able to get it done by using an independent contractor, for whom you do not have to make payroll tax payments.

Need costly tools, equipment or vehicles? EBay lists hundreds of auctions each week of new, overstocked equipment, and used cars, trucks, SUVs, tools and equipment. Many Sunday newspapers also list auctions of business assets, where you can go and bid on tools or equipment and often buy them for a substantial discount from their original price.



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Appendix A Using Trends to Power Your Business

Introduction A trend is a definite, predictable direction or sequence of events, such as the current preoccupation of Americans in reducing their intake of fat. Trends occur whether you are aware of them or not. When considering what concept you will use as the foundation of your new business, you can either ignore trends and possibly get run over by them, or you can acknowledge their importance, study them and use them to propel your business ahead faster. Often the most successful new small businesses become so because they were very aware of positive trends in their areas of business – long before they launched. As a matter of fact, the best new businesses build their marketing around their trend analysis. Our business of presenting training programs for new entrepreneurs is a good example of how trends were considered in evaluating the feasibility and potential profitability of a concept long before we decided to open for business. We could see from the world around us that two major social changes were occurring that bode well for the success of an entrepreneurial training business: greatly increased use of adult education for career advancement and a major reduction in corporate employment. The first trend, increased use of colleges for career training, told us that many of the individuals we wished to approach for entrepreneurial training were likely to be quite comfortable entering a local college for night classes. The second trend we observed, the increasing downsizing of large corporate payrolls, told us that many prospective entrepreneurs would be entering the marketplace as we entered the 1990’s. We guessed that a large number of these people would be frustrated enough by their treatment in the corporate world that they would at least consider taking a basic “start your business” class. Unlike other parts of your marketing strategy, such as advertising, you don’t have to do anything to start trends working – they already exist in the world all around you. You just need to be smart enough to recognize their existence, and disciplined enough to research them to the point where you can directly relate their effect on your marketing success.



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Becoming a Trend Watcher Identifying trends doesn’t demand a super-high IQ. It simply requires some reading and some observation. Making accurate predictions from this analysis is another matter. Predicting what specific changes will occur in your business area as the result of trends requires experience, the ability to look ahead and a little bit of luck! Effective trend watching is based on the reality that current events form future trends. The first step, therefore, in becoming a trend-tracker is to keep up on current events in your industry, marketplace and local geographic area. These are four realms of information you can tap: the media world, the political world, the entertainment world and the real world. For most of us, the media world is represented by the evening television news. This is unfortunate because this information source accentuates the sensational and focuses primarily only on headline-grabbing events. While these goings-on may be interesting, they rarely help in locating a trend. Less frequently used media sources are magazines and newspapers. Reading Time magazine every week is certainly going to give you a better grasp of the facts behind events than television news. But be careful, magazine editors have their agendas too! You only have to watch C-Span for a couple of hours to realize that politicians realize only too well that they are one television. Much of what you will experience here is image building, not for information delivery. The entertainment world does an outstanding job of amusing us, but how important are they in forming trends? They can be very influential because of the way they shape public opinion. Because they rely on mass communication, they bombard us with their messages. This can encourage real changes in behavior, which lead to trends. The real world, of course, is what we face when we creep through rush-hour traffic every morning or when we face a long wait in the supermarket. It is real people trying to take care of everyday business. If you observe enough people, and particularly if you talk to some of them about their feelings, you can observe commonalties that could be the basis of a trend.



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How to Track Trends Step 1 Select one or more fields in which you want to analyze trends. If you are considering opening a plastic recycling operation, you may wish to particularly watch events in the environmental, government policy and industrial manufacturing areas. Picking a couple of specific topic areas helps you to organize the information you find, which is very important because you will find that you can become deluged with facts and figures when you start to concentrate on finding information. Step 2 Set up a filing system to collect the information you find--newspaper and magazine articles, special report, newsletters, seminar papers, etc. Your arrangement doesn't have to be anything complicated, just a few well-marked file folders, in a handy location. As you start to collect bits of information, ask yourself regularly--is there another, complimentary direction I should be going in? If yes, add additional file folders. Step 3 Perfect your ability to choose the most useful things to read. Some media rely more on reprinted information than do others. These sources are sometimes useful in confirming something you have already read somewhere else, but not very useful for providing original thinking. The authors of two of the best-selling books on trends, John Naisbitt (Megatrends) and Gerald Celente (Trend Tracking), primarily used daily newspapers to gather their information. Step 4 Learn when to read the newspaper. In today's busy world, many people only read the Sunday newspaper. This is fine if you want to get an overview of a broad number of subjects and read about a few hot issues in detail. However, for accessing the type of solid, fact-based reporting you want to use in analyzing trends you want to read the Saturday newspaper. There is less headline news and hyped up features on Saturday, because fewer people read the newspaper on this day. Also, government releases tend to be published on Saturdays, as well as some less than flattering corporate revelations.



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Step 5 Learn what to read in the newspaper. The author of Trend Tracking, Gerald Celente, suggests reading the following parts of the newspaper: First section and feature stories in business, real estate and living sections. Book reviews can also be helpful for locating new ideas and sources of information. Celente also strongly recommends starting the day with USA TODAY, because of how much it covers in such a small space. When you travel, buy a local newspaper and quick read the main stories to see if they present a different slant from the national newspaper. Step 6 Learn how to read a newspaper. Read the newspaper with an underline marker in hand. Quickly highlight the key points in the article. This saves much time when you go back later. Always read the end of the story, as opposing points of view are often presented there. After reading an article, write at the top the filing have social, economic or political importance. If not, skip it. As you find articles you want to save, think about how they fit into the marketing scheme for your new business. For example, does the article's content help you make a pricing decisions? Know more about competition? Select a distribution method? There is, of course, information to be gleaned from the television and radio, but you must watch and listen carefully. Much of what you encounter is rewritten from newspaper reports. The exception may the television news magazines, such as 20/20 or Prime Time Live.



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notes

eeaarrnn bbiigg ffrroomm wwhhaatt yyoouu ......in my case i received a big smack across the face...

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