There was a time when applicants to our program had to complete an Entrepreneurial Assessment tool so they would “self-evaluate” their preparedness.
The tool was actually pretty good. It posed about 250 questions that surprised most people who completed the assessment.
In a few cases, people completing the assessment decided NOT to pursue self employment and went on to find a job. Perhaps that wasn’t such a bad thing.
In the end, this assessment only weeded out 5% of the applicants. Approximately 35% of the remainder would start our program but never realized their goal of being self employed.
This article deals with that 35%.
After working with small businesses for over 30 years, I’ve seen quite the transformation in the types of businesses out there. For the most part, technology has driven much of this change.
I mean, 30 years ago in the late ‘80s, the internet as we know it didn’t exist.
Cell phones were a rarity. They were HUGE boxy things reminiscent of mobile army phones you’d see in WWII movies.
Fax machines were relatively new, and few if any businesses had a computer. In fact, a business was lucky if it had a typewriter. Most business correspondence was still done by hand and if a copy was needed, a piece of carbon paper was inserted between 2 sheets of paper.
On the home front, most homes had either a turntable or cassette player and you were considered wealthy if you had a VCR.
How the times have changed!
Over the years I’ve seen a great many business ideas come and go.
At one time, these business ideas were considered “hot” and would have appeared in “blog” articles had blogs existed then!!
But for some people, these ideas never really worked.
For this article I’ve examined dozens of businesses that are all valid, bonafide ideas, yet for some reason they didn’t work out for my clients. I've presented 6 of them here.
Now - let me preface my comments. If I were writing an article on HOT business ideas (which I would never do), I WOULD list these ideas. You’ll note that they are not new or innovative.
They are popular because there always seems to be room for one more.
I could provide countless stats that would support *any* pet related business. In fact, anything pet-related is hot! We LOVE our pets. It's because of this love that this industry is thriving.
So, if the industry is so hot, then why have I personally encountered several clients who couldn’t make a go of it?
Well, businesses in this industry won’t work if the Entrepreneur is not a pet lover. You see, the clients who’ve bombed at this, chose the idea for the wrong reason.
They followed the industry stats that predicted growth and prosperity. Sure - they loved their own pets dearly, but they weren’t passionate enough about YOUR pet to make a viable business for themselves.
Sadly, they didn’t realize this until after they’d started the process of researching and planning the business.
In some cases, they came to the realization early on before devoting any money toward their venture. In other cases, they actually signed commercial leases and purchased fixtures and inventory. That’s a much more painful scenario to recover from.
Whether the business was dog-walking, organic pet treats, raw pet-food manufacturing, mobile grooming, or even pet sitting, we know these all have a proven track record of success.
For a small, pet-related business to be successful however, you need to be passionate about all things pets!
Trades have always been among the hottest of business ideas in my opinion. Whether its electrical contracting, plumbing, heating ventilation & air conditioning, general contracting or any specialty trade, there will *always* be a need for trades.
Most trades do famously! The high success rate is not so surprising when you really think about it.
To earn a trade license in most jurisdictions, the tradesperson must amass anywhere from 2,000 to 10,000 hours of work experience “on the tools.”
They also need to log countless hours of classroom training complete with tests and exams.
By the time they acquire their license, they’ve truly earned it. They’re just so committed! In fact, it’s very rare to see a licensed tradesperson change careers.
So why do some people fail when they try to turn their trade into a self employment venture?
In my experience, it’s the ones who can't strike a balance between the tools and the business. They work on the tools to the exclusion of all else.
You must realize, there are MANY hats to wear in business. It's imperative that self-employed tradespeople wear these hats well.
Turning a trade into a successful business usually involves shifting your focus from the tools towards logistics and day-to-day management. Even for a 1-person operation, the tools are only about 50% of what needs to get done.
My clients who’ve struggled in their trade-related venture were all unable to strike this balance. A solution that we helped a few adopt, was to purchase services to balance their business. For instance,
So remember, being passionate about and taking pride in one’s work is certainly an essential component for a successful trade. That in itself however, is not enough to define a successful business.
There was a time, 30 years ago, when seniors support services were few and far-between. While there was a need for the services, few people were willing to pay for them! Back then, seniors support services were taken care of by family.
The winds of change have blown!
Today, *anything* seniors support is super hot. From companionship services, respite care, in-home personal supports, meal-preparation services, transportation services . . . the list is endless! All markets can use more.
From a demographic perspective, we’ve “arrived” and the demand will only get greater. The largest demographic sector, the Baby Boomers, are aging to the point where they will need these services for themselves. The data is irrefutable.
Health Care is also stretched to the limits in every jurisdiction. Services that keep people in their homes longer are truly popular and in high demand. The quality of a senior’s life is significantly improved the longer they are supported to remain in their homes safely and independently.
So why then, have some seniors support services failed? That can best be answered by examining the ones that have thrived!
In my experience, the most successful seniors support services are the ones that started as a single-person operation.
These entrepreneurs always had a frame of reference for working with the elderly or infirm.
This experience developed into a passion, which, with support, was turned into a business.
The ones that failed all lacked this experience. They lacked the passion for working with the elderly or infirm. They had no volunteer experience, or even life experience working with someone who was elderly or dying.
Their frame of reference was almost always on the administration side. They read the industry outlook and knew the industry was in growth.
Their business idea was not to personally offer the services, but rather to coordinate the resources. They would hire caregivers and “book them out” on an hourly basis. In effect, their business model was to operate as a “temp service” for seniors support.
Now, while there IS merit to this business model, it only tends to work for Entrepreneurs who have a frame of reference.
For my clients, operating this sort of business without first-hand knowledge and experience however, placed them at an extreme disadvantage. They didn’t understand the needs of the client as well as they could have.
Conflicts arose between management and staff when the booking needs weren’t properly met. My clients truly did not understand the needs of the customers they were serving.
There’s much to be said for experience!
A client once remarked to me “The world will always need Accountants and Cleaners, because most people hate numbers and cleaning!”
Quite right! That’s why I’ve listed both business ideas in this document!
Why is there always a need for bookkeepers?
For starters, only about 1/4 of the population actually enjoy working with numbers.
About 1/2 of the population is capable of doing the work, but they don’t enjoy it.
Finally, the last 1/4 just can’t get it, don’t like it, and avoid numbers like the plague!
It IS true - the world will always need Accountants!
So why does the business idea of “Bookkeeping Services” have the highest failure rate of all businesses we’ve worked with? (and I’m not exaggerating this point)
The answer lies in examining the typical bookkeeper, and more importantly, how they think.
Have you ever heard references to “right brain versus left brain?” The science behind this concept suggests that “right brain” people tend to “think” in a more artistic and emotional fashion, whereas “left brain” people are more logical, analytical and structured in their thinking. There’s much more to it, but I think you get the gist.
Well, studies have actually proven, that people will perform much better at tasks and in jobs that are aligned with the dominant side of their brain. There’s more to the science however. Just because someone is “right brained” does not mean they would fail in a position requiring more use of the left side of their brain.
Enter, the “whole brain concept!” (ta-daa: cue - clashing symbols) :)
The whole-brain concept says that while people tend to perform well at tasks that are aligned with their thought preferences, they can still stretch their preferences to some degree. The extent of the “stretching” depends on the individual. Some people can stretch a lot, whereas other might not be able to stretch at all.
For instance, people who are logical and rational thinkers are more inclined to do well in positions that involved numbers. Some of these people may also have a high level of empathy (i.e., feeling), whereas others may have absolutely none.
So, let’s get back to the question “why do some bookkeepers excel, whereas other fail at self employment.”
The answer lies in these thought preferences.
To be successful at operating your own bookkeeping business, you must have the ability and mindset to balance organizational skills with your feelings & emotions, intuitions, and problem solving skills.
You must be well rounded.
Bookkeepers who are only in it for the numbers will struggle in their own business. They are more inclined to close up shop and seek a position in an office.
In some respects, it’s not unlike the trades person who only wants to work on the tools.
This is another one of my favorites.
As I wrote in the previous sections, people will always want cleaning services because most people don’t like cleaning.
Now, lets be clear here. Nobody needs cleaning services - they want them. The key to business success is to find those people. It’s actually pretty easy to do if you know how.
A few other things about cleaning services:
Most cleaning services I’ve worked with got it right. They were generally fully self-sufficient within a few months. That’s pretty fast success!
Only a few others never made it work and this really surprised me. It caused me to look closely at their circumstances.
In all cases, the individuals didn’t have any first-hand experience at residential cleaning aside from cleaning their own homes.
Furthermore, they had never purchased home cleaning services before. They didn’t know much about the industry.
This placed them at a disadvantage from the very beginning. They had no frame of reference!
The only antidote for this is research . . . and lots of it.
Next, they were fooled by the simplicity of the business idea. As a result they didn’t feel they should have to conduct much research to learn how the industry operated. They didn’t scope out their competition, they hadn’t defined a target client and as a result, they couldn’t place themselves in a position to sell effectively.
In the end all they had was an ill-conceived idea. It was not very well thought out!
From their perspective, they were all leaving public-sector jobs and wanted to simplify their lives. They thought self-employment would be a nice way to live a stress free life.
Huh? Ya - rite! I don’t think so!
First of all, the complexity of the business idea should not dictate the level of research. In all cases, cleaning services with the higher level of research always outperform.
Secondly, no matter the business idea, self employment comes with its share of stressors!
There are stressors related to clients, competitors, sales, selling, suppliers, travel, and employees. A “simple” idea does not necessarily mean stress free!
In the end, these businesses failed because the owners really didn’t understand what they were getting into. They had identified a relatively simple business concept, but their lack of experience, combined with the lack of research led to their undoing.
Okay - now you’re going think I’m a lunatic for including this one after you read the next paragraph. . .
In almost 20 years of teaching entrepreneurship in my own classroom, I’ve worked with almost 100 people who proposed to operate some sort of eCommerce business. 100% of them never actually got started. I kid you not!
Are you surprised? I am, well at least I’m sort of surprised, but I also have the benefit of knowing where they ALL went wrong.
This 100% failure rate is related to attitude.
You see, 100% of them all had the attitude that if they had a product or service, and offered it through some sort of eCommerce platform, that their customers would search and find them.
They had the “If you build it, they will come” mindset.
It just doesn’t work that way.
*Anything* eCommerce is not easy. Take it from me! I know! It took every entrepreneurial trait I had and a lot of time and money before I finally figured out how it worked.
In some respects, I’m still figuring it out because eCommerce is so dynamic. The rules keep changing.
The difference with me is, I keep changing to suit the rules! I don’t give up.
Sadly, all of my clients gave up!
When I look at the majority of my clients who bailed at eCommerce, they initially suffered from what we call “the imposter syndrome.” That's the tendency to feel inadequate and “not worthy” after learning of well-entrenched competitors.
While there are many reasons to NOT start an eCommerce business, the imposter syndrome should never be one of them. I tell my clients to put blinders on. Concentrate on their strengths. Focus on the value they can offer their clients, and then go and do it.
Stay the course. Slow and steady always wins.
The third reason they actually never started was because they had great difficulties making decisions. In my opinion, this is understandable.
My clients were the victims of all the chatter "out there." Just when they thought they had it figured out, they heard more chatter over here and over there. They became overwhelmed.
Dealing with the chatter is like playing a game of whack-a-mole.
eCommerce tends to be the big vision of a simple concept. My recommendation is to simplify the vision by putting blinders on. That’s one way to block out the chatter. I also recommend planning for ONE course and sticking to it.
Complete the eCommerce offering from start to finish, and then work on improving it over time. It’ so much easier to improve it over time than it is to get it out there initially.
When I think back to my clients and their failed ventures, I don’t do so with an attitude of assigning blame.
They didn’t do anything wrong.
They were looking to make a change in their lives for all the right reasons. Sadly, they were the victims of marketing and the “top 25 business ideas.”
They wanted a quick fix for a painful problem.
They just went about it the wrong way.
So, what would have been the solution?
Well, I wouldn’t characterize their failures to be a problem with their idea as much as a problem with the matching of the idea to them. In every case the issue was one of incompatibility.
Simply put, the business ideas were never a good fit.
As I mentioned at the outset, we used to give an evaluation tool to every applicant as a means of pre-screening them. The tool only weeded out 5% whereas it should have weeded out 40%.
The shortcoming in this original tool was that it required the prospective entrepreneur to complete the assessment with a business idea in mind. Sadly, that was like placing the cart before the horse. You see, we never actually used a tool to help them assess whether or not the business idea was a good fit for them.
Today, we actually use 2 different tools to help them figure it out.
The first is a Personal SWOT Analysis.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. The idea behind it is for the client to examine their personal strengths and preferences as well as their weaknesses and dislikes.
By having a clearer understanding of themselves, they are in a much better position to validate that their business idea is a good match . . FOR THEM.
If they don’t actually have a business idea, our system will guide them through a process of identifying one.
The end result is a custom-made business idea that makes sense.
We have a FREE, mini-training to help you identify and/or validate your business idea. It’s called Identifying a Business Idea That Fits YOU.
In the end, a proper and thorough self-evaluation is a necessary first step for every new entrepreneur.
It's amazing really, just how much time and energy this simple process can save!
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