Know your business - NAIJAON

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Monday, July 8, 2019

Know your business

One of the most common questions people
ask me is this: What business should I start?
My answer is always the same—start a
venture that you know intimately already.
I don’t believe any business exists that is
so foolproof that anyone can enter and
make a sure profit. On the other hand, a
skilled, dedicated owner often can make
a venture successful when others have
failed. Remember, your potential customers
will exchange their money only for the
conviction that you are giving them their
money’s worth. And that means you’ll need
to know what you’re doing. While this
point should appear obvious, sadly—it isn’t.
Many people enter businesses they
know little or nothing about. I did it once
myself. I opened an automobile tune-up
shop at a time when, seemingly, they
couldn’t miss. I knew a good deal about
running a small business, had a personality
well suited for it, and could borrow enough
money to begin. The end of what turned
out to be a very sad story is that it took
me two years and $30,000 to get rid of the
business. Why? Because in my hurry to
make a profit, I overlooked several crucial
facts. The most important of these was that
I knew virtually nothing about cars and I
didn’t really want to learn. Not only was I
unable to roll up my sleeves and pitch in
when it was needed, I didn’t even know
enough to properly hire and supervise
mechanics. In short, I made a classic
mistake—I started a business in a “hot”
field because someone was foolish enough
to lend me the money.
How can you apply my lesson to your
situation? Let’s say you’ve heard pasta shops make lots of money and you want
to start one. First, if at all possible, get a
job working in one, even if you work for
free. Learn everything you can about every
aspect of the business. After a few months,
you should be an expert in every aspect
of pasta making, from mixing eggs and
flour, flattening the dough, and slicing it
into strips. Ask yourself whether you enjoy
the work and whether you are good at it.
If you answer “Yes,” go on to the second
important question: Is the business a
potential money maker? You should have
a pretty good answer to this question after
working in the field for a few months.
If you’re unable to find employment
in the pasta business, make a tour of
delicatessens and shops that make their
own pasta. Interview the owners. To get
reliable answers, it’s best to do this in a
different locale from the one in which
you plan to locate. Small business owners
are often quite willing to share their
knowledge once they are sure you will not
compete with them.
I remember reading a management
philosophy that said that a good manager
doesn’t have to know every job, only
how to get other people to do them.
That approach may work well in a large
corporation, but for a small business, it’s
dangerously naive. In short, don’t start your
small venture until you know it from the
ground up. I mean this literally. If you’re
opening a print shop, you should be able
to run the presses and do paste-up and layout, as well as keep a coherent set of
books. If it’s your elegant little restaurant
and the food isn’t perfect, you’re the one
who either improves it in a hurry or goes
broke. If you don’t like getting your hands
dirty, choose a clean business.

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