There are three stages involved in building a business. Each of these stages are very crucial for the success of the business. Understanding these stages by the entrepreneur is key.
The Three Levels Of Building A Business
LEVEL ONE: PLANNING YOUR BUSINESS AND PROVING IT’S VIABLE
At Level One, you are designing and planning your new startup. You’re gathering your initial team, raising any required startup capital, and executing your launch plan. Your focus at Level One is to plan your new business. And get immediate market feedback to learn if your business concept and model is economically viable. This is a fancy way to say you’ll be testing your product or service to see if you can sell it at a price that allows your business to be profitable.
A Simple Formula To Know Which Business You Should Start.
After observing thousands of entrepreneurs start businesses and seeing which ones thrived and which ones struggled, which succeeded and which failed, I’ve developed the following simple formula to help you know the business you should start.
You will find your highest likelihood of success when your business falls within the overlap of these three areas:
- Your passions
- Your talents
- Your advantages
Your passions: what are you passionate about? What do you love to do? What thing do you find absorbing? Engaging? Engrossing? To build a successful business requires focusing on your business long after the blush of the initial excitement has faded. Your passion keeps you in your business and enjoying it even when you’re faced with the inevitable challenges.
Your talents: what are you great at doing? What skills come easily and naturally for you? What do other people say looks easy when you do it? In what area are you consistently improving?
Your advantages: what are the resources, both financial and non-financial, that you can bring to your new business venture? What life experiences have you earned and want to apply? What relationships have you built that you can tap into? What skills and proficiencies have you invested the time and money to cultivate? What financial resources can you access? What symbolic capital have you earned?
The most successful startups live in the overlap of these three areas: your passions, your talents, and your advantages.
Before you decide on which business to start, clearly list your passions, talents, and advantages. From there, look for a business opportunity that addresses the overlapping area of all three. More on this in a subsequent chapter
The 4 Action Steps You Must Take In Level One
Action step 1: Clarify your basic business idea
Let’s say you’ve been dreaming of your new business for months or even years and playing the “what if” game in your head. It’s time to get serious and turn your dreams into tangible, concrete ideas on paper. To clarify your core business concept, start by answering these seven questions:
- In two or three sentences, describe your business idea.
- Who is your ideal customer? Describe that person’s characteristics in as much details as possible.
- What exactly will that ideal customer buy from you? Describe your product or service including the key features and benefits that will prompt your customers to buy it.
- How much will your ideal customer pay? How and when will you collect that money?
- Who will be your main competitors? List the most important ones.
- What will separate you from your competitors? How will you find space in your market or niche to generate sales?
- What is your dream for how you will expand and grow your business? What do you imagine it will look like in three to five years?