1.3 Workbook

A True Business Opportunity

Business ideas surface constantly in our rapidly changing world – just about everybody has one. Unfortunately, there are not a lot of great ideas coupled with people who can actually build a successful business. An idea and a business opportunity are not the same thing. A true business opportunity consists of the following five components:

Meeting a Need - an idea that meets a need, solves a problem or reduces pain.
Credible Experience - familiarity with industry, market, products or services.
Access to Resources - ability to find advisors, partners, materials and finances.
Buying Customers - people who are ready to buy the product RIGHT NOW!
Sound Business Model - able to make money, scale and sustain the venture

Some aspiring entrepreneurs believe a “great idea” is everything (component 1), and that anyone can turn an idea into a business. While this may have been true in past decades, today’s every changing economy requires excellent execution of the idea (components 2 through 5). Having intimate knowledge of the industry (component 2) dramatically increases the odds that the other components will align themselves at some point in time. When they do, successful entrepreneurs have the courage to take the risk and face the challenge. Actually, embracing the challenge is much less risky when all five factors are present in sufficient strength.

Most successful entrepreneurs we interview tell a similar story when describing their business launch. First, they discover a need that is not being addressed in the marketplace or a better way to meet a need that is being addressed (better quality, better price, more features, better service, etc.). Second, while contemplating their discovery they realize they are uniquely positioned to meet this need – they have the skills, experience, contacts, training and credibility. Third, they assemble the resources they need to start the venture: partners, a prototype, money, equipment, supplies, etc. Next, they find a handful of customers who are waiting for the products as soon as the business launches; sometimes customers even commit to patronize the new business before it is launched; occasionally, customers become partners. Finally, they develop a business model that allows them to make money, scale the venture, and sustain the enterprise over time.

Compare the scenario above to the aspiring entrepreneur who decides to start a business, quits a job, conjures up an idea while sitting on the couch, and tries to push it into an unfamiliar industry. I’m sure you get the point: the first example is a “true business opportunity” and the second is just an idea. The high failure rate for business startups is often the result of people launching ideas rather than true business opportunities.

The questions that follow ask about the five components of a true business opportunity. If you provide positive answers to these questions, you have an opportunity worth pursuing. If all you have is an idea, you have some work to do.