Starting a business? What does it do and why?

You’ve decided to start a business. That’s great! Now you need to ask yourself some very important questions. To start with, exactly what does your business do? Why have you chosen to do it? How are you going to do it? These may seem like simple questions but when you break them down and answer them adequately, you will have taken your first steps towards increasing your likelihood of success.

Again, the three key questions are what, why and how.

It goes without saying that if you can’t answer the ‘what’ question, then you won’t be starting a business anytime soon! Where many companies fail is in not addressing the ‘why’ and the ‘how’. When you are considering starting a business, the ‘why’ is the more important of the two.

Just because you think it’s a great idea doesn’t mean everyone else will!

Assuming that everyone will love a new product or service is the cause of many business failures. You may have a great idea, and it may be something that you can benefit from, but does it represent value to me? Why would I or anyone else want it?

To illustrate the importance of answering the ‘why’ question, I offer you the following stories.

The Misguided Painter

You’ve just moved from California to an older suburban area on the East Coast. It consists of thousands of homes that are over 60 years old. Many of them are in dire need of painting. Having lived in California for many years, you fell in love with the salmon pink color schemes common to so many homes in that part of the country. As you drive the streets of your new neighborhood, you believe that it would look so much better by painting every house in those Californian hues.

You decide to start a painting services business. After purchasing your tools and registering your business, you start by painting your own home as a showpiece. Having done a beautiful job that reflects the quality of your work, you create some expensive brochures and begin promoting the look you believe everyone should have. The only problem is, older heritage style homes really don’t suit that look. As hard as you try, you can’t generate much interest.

Your answer to the ‘what do you do’ question was:

I paint homes in Calfornian hues and do high quality work.

Your answer to the ‘why do you do it’ question was:

Because I love the look and everyone else will too.

Meanwhile, another entrepreneur starts a painting company as well. You notice that their company is busy painting many homes. You wonder why they are doing so well but the answer is simple.

Their answer to the ‘what do you do’ question was:

I provide high quality painting services. I will also provide color consultation but ultimately the customer will decide on the color scheme.

Their answer to the ‘why do you do it’ question was:

Because I live in an area of old heritage homes that need painting. I walked the streets and surveyed dozens of people by asking if they would be interested in an estimate and a relatively high percentage said yes. I checked to see how much competition I would run into and found very little.

In other words, they did it because there was a market need for that service and not many people offering it. This is called being “market driven’. Do your homework and carefully study the market you intend to serve.

It is much easier to fill a market need than it is to create one.

However, if you want to create a market, there are clever ways to do it. The following story describes one such approach.

The Clever Gardener

This story happens in the same suburb where the painters live, but a few decades earlier.

A woman has noticed that many of the lawns are overgrown and that plenty of trees are in desperate need of pruning. As well, the lawns are browning and the flowers wilting for lack of watering. She had recently read about an upcoming technology that will automate the watering process and believes that many homeowners would want the convenience of these new sprinkler systems. Only thing is, it’s an upcoming technology that is currently too expensive and not readily available.

Having given this idea a lot of thought, she decides that perhaps a good approach would be to start a gardening business. If she does a good job, when sprinklers become affordable, she will have an instant clientele.

She does her research and discovers that there is not much competition. There are sufficient homeowners interested in a gardening service to justify starting a business. She feels she can offer her services at a price that will be fair to the customers and profitable to her. Starting with an old pickup truck, a lawn mower and her own gardening tools, she slowly builds up her business. Every day, she faithfully spends time reading about gardening in order to increase her knowledge and refine her skills. As well, she keeps her attention on sprinkler technology and begins to build relationships with the companies that are developing this new way of watering yards. She also makes sure that her beautifully landscaped property is a living showcase of her talents.

Eventually, sprinklers become affordable. Leveraging the relationships she has formed, she becomes a sprinkler re-seller and places her first order, which she will install in her own yard. After installing the system, she sends all of her clients an invitation to attend a BBQ at her home. It’s a ‘thank you for your business’ event and she will also be giving out some exotic bulbs and tubers as gifts.

Arriving at her home, the first thing her clients see is a sprinkler system strategically watering every inch of her front yard. Soon after, the sprinkler heads recede into the lawn. Now the flowerbed sprinklers sputter and begin gracefully spraying a fine mist over her plants. For hours, she entertains her clients all the while answering questions about the hot topic, her sprinkler system.

She sets the timer for her front yard sprinklers so that they will roar to life every morning just before everyone is heading off to work. Every car that drives by sees the sprinklers effortlessly watering her yard and it isn’t long before her phone is ringing every day with requests for quotes.

Her answer to the ‘what do you do’ question was:

My primary business will be to offer quality gardening services.

Her answer to the ‘why do you do it’ question was:

I have done my research and there is a market. I believe that I can provide an excellent service and build a sizable clientele. This will position me to eventually provide and install sprinkler systems, which are an emerging technology that will soon be available and affordable.

Our clever gardener saw that a window of opportunity would soon be available. She could see that there would be a convergence between an existing market and a developing technology. Starting a company to capitalize on an upcoming convergence is a very good idea. You can read more about the dynamics of convergence in the article, ‘Seeing the windows of opportunity‘.

I would like to leave you with one last thought. If part of your answer to the ‘why’ question is that you love what you do, that is a very good thing. It is not a mandatory, but I can assure you that those who love what they do and do it with passion will often succeed over those who do not share that enthusiasm. Why start a business if you’re not going to enjoy what you do?

I hope that this article will prompt you to ask the right questions, do your market research, and avoid making costly assumptions. I wish you every good fortune as you start your new business!

Photo Credits

Old Truck by Chris Holt © Chris Holt
All Others © Gil Namur

 

© Gil Namur, 2009