I had been approached my some budding entrepreneurs to invest in their business ideas. Most idea lack substance or sustainability and do not appeal to me. All investors have their own key factors that trigger their interest and I would like to share my point of view on starting a business. My view is very simplistic but it work for me:
Identify the business (Part 1)
- Select a business that is not too competitive or common. E.g. starting a hardware shop would have a better chance of success than a handphone shop in the neighbourhood centre. Everyone is familiar with HP but not many know about hardware tools and equipments. In short, if it is too easy or simple, others would have done it.
- Select a trade that you will be better than others. E.g. those in the the hardware trade do not attract top talents. If you above average, you already have an edge. (no insult meant to those in hardware trade)
- Select a trade that you have specialize knowledge. If you don't have it, learn it by working in a similar business to gain in-depth knowledge.
- Select a business that produces millionaires. E.g. most hardware bosses own private properties and drives a Bimmer , Mercedes or even Lambo. This eliminate the business sustainability and market size analysis. If the business tow kay can get rich, so can you.
- Select a business that you can sustain with your fund. Do not be greedy and become a wholesaler even before you start off with a small retail outlet. Expansion will be easier when you have gained more experience and have more fund.
The above are my views for those that seek advice from me on starting a business. Most are surprise that I do not encourage them to prepare for text book style detail business plan. All business are different and more so in a different country with different culture. The real business world is very different from the text book environment and we need to be smart enough to see it and make changes accordingly. To succeed, you need to know yourself which is covered in my future installment.
Know Yourself (Part 2)
Business Profit and Cost (Part 3)
This post strikes a chord!
ReplyDeleteEven though I am not an entrepreneur, my experience as a hired hand is similar.
I was lucky to find my niche in the retailing and furniture business. Industry and sectors that are not on the radar of top graduates.
Everyone wants to work in the glamourous investment banking or to be sales and marketing with more glamourous companies like Apple, P&G, etc.
Funny how we avoid the crowded trade in investing; but in our worklife, we go where the hottest industries or sectors are?
In my former industry (Oil & Marine), most of the poly grad are paid very well. In my former company, the average monthly salary for a Sales Engineer with 4 to 5 years experience in our trade is about $4K to $6K. We were also paying them about 3 months bonus + AWS.
DeleteI do not blame new grads for being choosy as I was once very reluctant to move from IT to O&M industry because of the glam and hardship factor. Damn glad that I bit the bullet and the rest is history. :)