Many people often have an idea of a business that they may be interested in starting. The next step should be to then do some initial research on that business and find out whether it is worth doing. If you have picked a good niche market or industry, it should have the following characteristics already:

• A Market that Can Pay for Your Product
• The Product You Offer is Valuable to Them
• There are opportunities for recurring revenue
• The Market is Big Enough to Support Your Product

Steps to Research Your Niche Industry

1. Do some competitive research – What are your competitors doing for this niche industry. Hopefully there aren’t many in your niche industry yet but if they are there, try to find out what works for them. If no one is offerring the same product or service, try to find out what other companies who sell to the same niche are doing for their product or service. (Note: Keep note of these companies as they may be able to help resell your your product.)
2. Find Out What Marketing Works Best for Them – Some niche industries are most effectively marketed to through referrals, while others can be reached most effectively through direct response in related publications, and still others might respond to more mass media like TV or radio. Once you know this, you can start researching those media for ads that have worked well for other companies. Ads that have run for long periods of times are often ones that are the most successful.
3. Understand the Economics of the Industry – In an industry like dentistry, there are some interesting economics going on. Preventive dentistry is far less profitable than elective procedures like cosmetic dentistry. Therefore, most dental practices are more interested in increasing their cosmetic cases. If you know this, you can focus your product and advertising more on cosmetic dentistry and get a higher response on your marketing, provide more value for your clients, and gain more profit per unit sold.
4. Is Your Product a Good Fit? – Play devil’s advocate here. If your product doesn’t exist yet, is there a reason why? Have other’s tried it and failed already? Maybe you have a great idea of how to reach potential new car buyers through the newspaper but your target market (high end car dealers) prefers for a little more high-end marketing?

Doing the Research of your Niche Industry is one of the more “abstract” steps in starting a business. There is not as much of an end goal like creating a piece of advertising or testing out your product. It’s tough to know what to look for when doing your research but the more you know about the industry that you’re targeting and the state of your potential competitors, the more successful you will be in targeting that niche market.

“The Termite Effect” refers to the impact that many common business mistakes have on businesses, entrepreneurial ventures, management teams and on the careers of sales professionals.

As a business coach, I noticed that the damage done by many of my clients’ mistakes were going unseen for months or even years… just like the effects termites can have on your home. After all, termites never sleep, they just keep eating. Similarly, until corrective action is taken, the deleterious effects of the most common business mistakes on your business never stop. In both cases, at first the harm is not noticeable but over time as the damage grows more and more extensive, the foundation of your home or your business begins to collapse.

Termites live in subterranean environments because they do not like being exposed to light. Many of the most common business mistakes such as poor organization or resistance to change are often ignored or hidden, however, exposing them to the light (recognizing that they exist) is the first step toward avoiding them in the future or repairing those that you have already made.

Some of the other common business mistakes that I have noticed include:

• Lack of understanding your company’s financial statements – Think of your financial statements as the blood work of your business. They can tell you a lot about what is going on below the surface.
• Inability to identify what success looks like – In order to consider yourself a “success”, can you articulate where you want your business to be one, three or five years from now? Many business owners and entrepreneurs struggle with this question.
• Living a reactive existence rather than a proactive one – How much time do you spend planning? Without it, you invariably will “just go with the flow”. You cannot survive long in a reactive environment.
• Lack of measuring results – What do you measure in your business? If you cannot rattle off 3-5 key performance indicators off the top of your head, you are destined for failure. Remember: “what you measure will improve” and vice versa, “what you do NOT measure will….. “
• Not generating enough leads – Marketing is to your business what petrol is to your car; neither can run without it. Do not neglect your marketing efforts.
• Poor work/life balance – This mistake plagues most business owners regardless of how good their intentions are. They must make a concerted effort to work less and/or say “no” more to the multitude of responsibilities that their business thrusts at them, otherwise, they will risk burnout.
• Not understanding your strengths or weaknesses – If you do not know yourself, you will struggle when it comes time to run your own business. You goal should be to spend the majority of your working hours performing those task and activities that you are uniquely gifted in and enjoy doing. Surround yourself with people whose unique gifts are performing those tasks in which you either hate doing or are terrible at.
• Lack of delegation. This is a critical mistake for most entrepreneurs because they have a difficult time giving up control. After all, no one is going to perform the tasks as well as them. Delegation is a requirement of all successful entrepreneurs for sanity and efficiency purposes.

A journey that begins with a wrong step seldom ends at the right destination.

1. Don’t Start a Business for the sake of MONEY
Top on the list of reasons why people go into business is the strong desire to amass wealth. I have never known of a more ineffective way to think about business than this. As unpopular as it might sound, most business failures stem from this singular fact alone. Why? Because the moment making money becomes your primary focus as an entrepreneur, delivering value which is the foundation of effective business practice becomes secondary. And when this happens, no matter how great your business is, it automatically goes on a downward spin. Nothing kills a business faster than putting money first before adding value to your customers. So when next you’re thinking about starting up a business, I suggest you lose every possible thought about making money and focus entirely on delivering consistently superior value. Trust me, I’m talking from experience (of other people), starting your own business for the purpose of making money is a sure fire way of failing.

2. Don’t Start a Business because you LOST your job
Closely related to the issue of money is going into business because you lost your job. As you’ve probably realized, this is how many people end up as entrepreneurs. At first glance, there might not be anything wrong with this approach of starting up a business, but taking a closer look will reveal a vital truth: people who lose their jobs are often driven by fear and to start a business because you are afraid is absolutely disastrous. The implication is often enormous: top on the list is that you will never exercise the due diligence starting a new business entails. Why? Because the fear of living without a regular income since you no longer have a job will keep haunting you and eventually start making you place unrealistic financial expectations on your new business venture. Second on the list is that you are emotionally unstable the first few months of losing a job, especially when you didn’t see it coming. The disappointment can be disheartening, the more reason why you shouldn’t go into business with such mind frame. Why? Because in the world of business, disappointments are a natural prerequisite for success. Meaning, the more disappointments you get, the closer you are to success.

3. Don’t Start a Business because you HAVE money
I know you’re probably startled about this one. You certainly didn’t see it coming. Well, it’s as wrong as starting a business for the sake of making money. How? Here’s the thing most people with money don’t realize, it doesn’t take money alone to make a business work. Starting and running a business will cost you more than all the money you think you have. There are just too many things a business will demand from you that money can’t even buy, for example: how much does it cost to buy the passion needed to build a SIGNIFICANT (unique and useful) business? Have you ever seen passion being offered for sale? In fact, no university or institute of learning can even teach you passion. Here’s the truth, having money is good, but it’s not sufficient enough to make you want to start a business. Starting a business requires gut, passion, ingenuity, creativity, resilience and so many other personal character traits that all the money in the world can’t buy!

4. Don’t Start a Business because you want TIME Freedom
The thought of not having to wake up early and rush off to work can be very enticing to would be entrepreneurs. But take it from me, I’ve been in the game now for 8 years; the fact that you didn’t wake up early and rushed off to work doesn’t mean you are not at work. Being an entrepreneur means working all of the time even in your sleep. That your fantasy of time freedom will naturally go sore once you choose to become your own boss. How do I mean? You see, it’s not that you wouldn’t have more time to yourself when you’re an entrepreneur, certainly you would. But the irony of it all is this; that time freedom is for you to do some creative work and not for you to be idle and indulge yourself in some unproductive activity. You left your job to have enough time to do what you really care about in life, that’s all the definition of time freedom you’ll ever get – having enough time to make a SIGNIFICANT contribution with your life to the world. True entrepreneurs hardly stay idle indulging in pleasurable activities just because they have time freedom. They are always in the creative process, picking up clues here and there of how they can make the world a better place by utilizing their time, money and life for something worthwhile.

5. Don’t Start a Business because OTHERS are doing it
Anything that is popular has a way of being highly contagious. People just literally jump at it without any logical explanation. Believe it or not, this is how so many people ended up in the world of business. Since everyone they know is quitting their 8-to-5 jobs to go start their own thing, why shouldn’t they do the same? The down side of going with the bandwagon is this; you’ll lack the staying power critical to survival in the world of business. At first, the thought of being your own boss can be very enticing, but sooner or later you’ll realize it’s not a bed of roses. And when this reality sets in, you’re the only one who would be left alone to figure out a way of making it through the stormy days. So start a business because it’s what your soul desires and not what the society or your peers desires for you. Starting your own business is not about boosting your personal ego or winning a popularity contest, it’s a personal decision born out of an internal conviction!

6. Don’t Start a Business because you HATE working for others
Now here comes the tricky one; starting a business because you hate working for others. After wanting to make money, this is another popular reason people give for going into business. Listen, as popular as it may seem, here’s the truth; 99% of popular things are either totally wrong or mere misconceptions. That you hate working for others is no guarantee that you will succeed or enjoy working for yourself. In fact, there’s more work to do working for yourself than you ever thought you did working for others. So if you hate working for others, you might just as well hate working for yourself. What it turns out to be sincerely is this: you simply don’t like work in general and this is why starting your own business is the last thing you should ever think of doing. Why? Because business is the domain of unlimited work; there are no working hours like your regular 8-to-5 job. Welcome to the 24/7/365 days a year working schedule!

7. Don’t Start a Business just LIKE everybody else (Differentiate or Die)
In my field of business development, I have seen so many people go into business just because they saw somebody else succeeding in it. This is a higher form of going into business because others are doing (point #5 above). You observe a business and simply go make a clone of such business. So what do we get? The same kind of business but with different brand names. I don’t get it: “Why would any right thinking person choose to be a duplicate of another when it’s absolutely possible to excel being an original?” As a matter of fact, you have higher chances of succeeding going into business as an innovator than being a duplicator.

The business terrain is already overcrowded with a countless number of companies doing almost the same thing you have in mind to do. Unlike in the past before the advent of the internet where you had only local or national competitors, now your competitors are all over the world and just one click away from your local or national target market. So why would you want to build a business just like your neighbour? Here’s the deal: if your business doesn’t stand for something SIGNIFICANT (unique and useful) there’s no need repeating what others have already done and giving it another name. Meaning, if there’s nothing positively unusual about your business, don’t bother going into business to offer the same old milk but now in a new brand skin or container. Doing this is the fastest route to extinction. In other words, differentiate or die!

8. Don’t Start a Business without SUFFICIENT planning
Business is a highly complex activity and therefore requires adequate planning. It’s been statistically proven that inadequate planning is top among the reasons why most businesses fail. I’m sure you already know that by now (that’s why it’s the second to the last point). Why then did I include it in the list? Because most times, the problem is not about what we don’t know but more of what we do know but never put to use or practice. There’s a phrase that best captures the essence of planning and it goes like this; “He who fails to plan, plans to fail“. And a key element of planning is having a long term perspective of things or as it is popularly called: seeing the big picture. Which intentionally, happens to be the subject matter of the next point to which we now turn.

9. Don’t Start a Business that cannot OUTLIVE you
One of the underlying principles of the Accounting profession is called: “going concern” which means that a business must be in perpetuity. That is, a business is meant to exist as far as there’s still a need to be met. It’s just basic human nature: I mean who wants to raise a child only to watch the child die before their eyes? In the same regard, you should never start a business that has a short lifespan. Starting a business from a short term or temporary viewpoint, as far as I’m concerned is the definition of selfishness. Why build something temporary when you have the potential to create something eternal? The joy of any creator is to see his/her creation rise above their widest dream and outlive the very existence of the creator. So here’s the ultimate question for you “does your business have the capacity to outlive you?” OR “Would your business still be in existence long after you’ve gone?” Never start or go into a new business without asking and answering these questions.

What then is the RIGHT way to start a business?

Start a business because you have something SIGNIFICANT (unique & useful) to contribute to the benefit of the human race!

Why?

Because a business is a tool that entrepreneurs create in order to make a SIGNIFICANT (unique & useful) contribution to the world by addressing a particular problem plaguing the human race.