By Ed McLaughlin
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 lift-off:
- What type of business should it be?
- Can you make a profit?
- What will be the impact of failure?
These are the perfect questions to be asking. 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 pre-order. And it is your source of personal strength to pursue your new business plan.
This is the entrepreneur’s quandary. In order to fulfill your life goal of starting your own business, you will need to put your reputation at risk. This quandary puts tremendous pressure on the entrepreneur in answering 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: The answer to both of these questions was 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. If I built a new business around a proven and unique competence, I would substantially improve my probability of success.
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 have a bankable business model. I could eliminate the risks via my knowledge of the existing business model, 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 2 or 3 options all within the same industry. I knew 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 USI Companies Inc as a B2B outsourcing business, modeled after a recent success I had had with a major client. The work I had done 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. It was a Bankable Distinctive Competence sitting right under my nose all the time.
© 2013 Ed McLaughlin
You make a great point of showing how it can take time for someone to fully recognize their particular distinctive competence. How many of us walk around with bankable distinctive competencies sitting right under our noses without taking the time to appreciate them? Social media fuels the tendency to compare ourselves to others, wishing for more skills and expertise. Your blog encourages us to unlock the potential we already have!