By Ed McLaughlin and Wyn Lydecker
You are determined to start your own business. You have thought about it long enough. You have set it as a life goal. Yet, there are three critical questions inhibiting your lift-off:
- What type of business should it be?
- Can you make a profit?
- What would be the impact of failure?
These are the perfect questions to ask. After all, you are going to put your most precious asset on the line – your hard-earned reputation. Your reputation is your stock-in-trade. It is your track record of success. Your reputation is the source of your startup capital. It is the source of your first sale. And it is your source of personal strength to pursue your new business idea and execute the plan.
This is your quandary as an entrepreneur. In order to fulfill your life goal of starting your own business, you will need to put your reputation at risk. That is why it is so important to answer the three critical questions above as accurately as possible. This can be a daunting experience – and probably inhibits many potential entrepreneurs from starting new businesses.
I struggled for years pondering the question about the type of business, its potential for profit, and the cost of failure. I thought through hundreds of scenarios and the associated risks when one day, it struck me: My answer lay in my Distinctive Competence. When I looked back on all of my past successes, they all had one thing in common: I had some unique skill, competence and /or capability that was distinct from many, if not all, others. I suddenly knew that if I built a business around my proven and unique competence, I would substantially improve my probability of success.
Distinctive Competence + Disruption = A Bankable Business Model!
Let’s delve deeper. If I could identify a disruptive product/service need in an industry where I had a proven Distinctive Competence, I would be able to develop a bankable business model. I could minimize the risks via my knowledge of existing business models, the customer base, the customer needs, the pricing sensitivity, the competition, and my proven reputation.
Once I realized that Distinctive Competence was the funnel for all potential new business ventures, it reduced my viable new business alternatives to two or three options – all within the same industry. I was confident that I could make money in any of these businesses. Selection became a matter of scale, scope, and growth potential.
In the end analysis, I decided to build a B2B outsourcing business, modeled after a recent success I had had with a major client. I named my business USI. The work I had done in my previous job had been ground-breaking, the first outsourcing of corporate real estate services, giving me a unique and intimate knowledge of the value proposition. Since I had put the details of the business case together, I felt confident that I could resell the value proposition to other corporations as a disruptive alternative to the traditional model. My bankable business idea was sitting right under my nose all the time.
Uncover Your Business Idea
Sit down now and figure out what your Distinctive Competence is. Can you funnel it to solve a market need? Is your solution bankable? Are you willing to put your reputation behind your business idea? These questions will guide you in launching your own venture.
If you are determined to build, lead, and grow a profitable business, The Purpose Is Profit is designed for you. If you are squeezed on time and budget, you can purchase the condensed version, call The Startup Roadmap.
Ed “Skip” McLaughlin is the author of The Purpose Is Profit: The Truth about Starting and Building Your Own Business, along with co-authors Wyn Lydecker and Paul McLaughlin. The Purpose Is Profit is available on Amazon.com and at your favorite bookstore now.
Copyright © 2017 by Ed McLaughlin All rights reserved.