There are several things you need to think about before starting a business in this current environment. Here are SIX to consider with a bonus lesson about which businesses to stay away from in 2022 and beyond. #entrepreneurship #smallbusiness
Three things I look at that would prevent me starting a business in 2022
I wouldn’t compete with Amazon
I don’t need to fight Goliath to feel special. If I couldn’t make money with Amazon, I darn sure would not try to go against them.
I wouldn’t compete with AI
From a labor standpoint, you can’t compete!
I wouldn’t compete with something that could be turned into software
If your business can be turned into software by someone else, it can put you out of business.
These three things above are reasons I like service companies.
Things to be ready to face if you’re going to start a business in 2022
Can your business model account for a potential pandemic?
You have to figure out ways to maintain your business in these conditions, because there’s always the potential of your business being cut in half. For restaurants, that might mean delivery with family-meal-sized minimums.
Vet your idea to make sure market wants it
I know that’s so simple, but I’m shocked to many people just start a business because it sounds like a good idea in their head.
Test your marketing plan to make sure you can attract customers
I do a postcard mailer to a large percentage of my target customers. I can look at the response numbers and they let me know how well I’m attracting customers. I don’t want to just have one hook in the water, e.g. one thing that works for me. I want five, six, seven mediums that I’m marketing through. Some that use to work in the 2000s for my business, no longer work now. Test your marketing plan.
Have to know your competition
Study your competition. Study franches that do what you do and see what you can extract from them. Know their marketing, their pricing, their offerings, and what they believe their competitive advantage to be.
Do no price yourself too low
This is a huge mistake that starting businesses make. You can’t fight a war with no Defense Fund, and the tendency is to price yourself too low. It’s better to create value. It’s better to give the impression of a valuable company, of a valuable service or product that’s better so that you can price it a little higher.
Expect and plan to make money from day one
Every company I’ve ever launched, I positioned the company to make money on the first day. Obviously I had set expenses, but I planned on bringing in money from day one. I’ve never had venture capital where I didn’t have to make money for three years.