Getting Started in Entrepreneurship
You may be reading this wanting to be an entrepreneur.
Some of you might have already begun the journey and
are wondering where improvements can be made. There are many
things that make entrepreneurship appealing to the masses. These
include such ideas as holding your own destiny in your hands, creating
something that contributes to society, potentially having more
job security, being able to prove your worth to the world through
your customers instead of to a boss or even a human resources associate
if you are in the job seeking stage. On the other hand, there
are many things that people believe of entrepreneurs that just aren’t
true: that you can make your own hours, that it offers more flexibility
than working for someone else, and that it’s the easy way out
of having to find a job. Being an entrepreneur is a grueling profession
that offers long hours, being on call constantly, and very little
forgiveness when mistakes occur. You have to quickly become a
well-seasoned CEO, Senior HR Executive, and Top Sales Associate
in an extremely short time frame. But if you have the drive and the
spark to make it work, it is a great way to both earn a living and
What does it take to be an entrepreneur? Many believe that it
takes a lot of up-front capital, a large network, and an established
skill set, but that would be wrong. While those are helpful, what it
takes predominately to be an entrepreneur is a thirst for knowledge,
an eye for opportunity, and the courage to fail and get knocked
down yet still get up and keep going.
A better mousetrap is frequently used as an example for entrepreneurship because it is simple and fits the situation very well. Let’s look at using the business as a mousetrap in these first basic examples.
1) New Mousetrap in a New Market. Perhaps you decide to go
in a completely different direction and make an over-sized mousetrap
that not only traps mice but also traps opossums, rats, squirrels,
bugs, or perhaps a trapping service instead of a product. That’s all
new mousetrap in a new market thinking.
2) Upgraded Mousetrap in the Same Market. You could decide to build an
upgraded model of a mousetrap that targets cruelty free markets of people who
don’t want to harm mice in their removal or perhaps one that is
more intricate and exterminates the smarter than average mouse.
Again, there is always the service equivalent where you offer a trapping
service of an animal and take the same strategic path.
3) Same Mousetrap in the Same Market. Sounds like the hardest path to take,
but this is probably done more than the other two combined. If you
enter take this path you have to have something that differentiates
your product in other ways – it looks better, you have a better price,
you make it more accessible, or perhaps it’s your customer service
that you focus on with vendor and customer relations.
I believe the previous mousetrap models of creating a business are
the most common, but there are a few more to mention for the extra
creative people out there. Maybe you have an idea of what you want
to do but aren’t quite sure how to get over that hump that turns an
idea into a business. The following exercise is what helps me constantly
when I am needing a more systematic way to be creative.
The best way to think about markets and services is that – “There
is some product or service I want to offer to some population of
people” and the only factor that really comes into consideration is
the type of business. It is seriously that simple. That’s why there are
so many successful “serial entrepreneurs”. Because once you get this
type of thinking down you’ll be able to turn any idea into a business
in no time.
I want you to look back up at that list on the cover photo because yes, it is
seriously that easy to come up with a strategic concept on a business
idea. You really don’t need a whole book about dreaming to figure
out what you can do – you just need an industry.
The health and fitness strategy ideas above might be the result
of repetition of the exercise to think about some different markets
or different application ideas. We can also look at the automotive
industry for another example.
If you look at this model closely you can see ideas that are developing
in the market and have developed in the market already.
People sell their cars on websites like autotrader.com everyday
by purchasing an ad. They also go to places like CarMax and sell
their cars outright without having to purchase anything in return.
I have even seen people who specialize in finding certain cars for
people and doing the deal for them as well as off-road vehicle sale dealerships. From the above grid the only remaining options left undeveloped are companies that offer to sell your car for you for a commission or some sort of official car-swap website. Such options very well might exist already and I don’t even realize it. What other
options come to mind for you? What combinations suggest a possible improvement?
The bottom line when it comes to mousetraps and the idea of
starting your own business, is that there are multiple models. You
can build a new mousetrap in a new market –like Google, Apple,
and Facebook did; you can build an improved upon mousetrap in
an existing market – like Amazon, Whole Foods, and Netflix did;
or you can build an established mousetrap in an established market
and enter competitive markets like many small businesses – doctors’
offices, lawn care companies, and insurance agencies, to name
just a few.
Another common way that people build new mousetraps in
new markets is through knowledge or experience, where the product
is a service rather than a commodity (as in the above example of
selling a car for someone else online). These days, especially, many
opportunities come through specialized expertise in technology
and technology development through websites, applications, and
programs. It is possible to start a business around a specialized area
without the practical know-how to do it oneself; but that requires
either a partnership with someone who can do the bulk of the work
or starting capital to hire people with the expertise that is needed.
The most common way that people are inspired to build new
mousetraps is by working in an existing market and feeling that
there is an opportunity to improve on a function of that job. This
improvement may even turn into a business in itself. For example,
a purchasing manager for an electronics business might have a problem
with the cost of continually getting updates on production
statuses overseas. If they had the desire to do so, they might work
on a technology that automatically uploads the progression based
on container weights and will show the progress on a website. That
system could be sold independently of the electronics business to all
companies that have manufacturing process frustrations.
As someone who worked predominately in the medical field,
it was quite common to come upon opportunities of these second
type of mousetraps. Many doctors’ offices had problems with patients
forgetting about their appointments and they didn’t have time
to call every patient beforehand to confirm the appointment. Their
only other option at the time was to use software that required their
office staff to enter in the times of appointments for each patient and
an automated system would call the patients with a robotic reminder.
While this helped some of the no-show rates, it often occurred
to me that the best option would be a call center, with remote access
to their scheduling system, where staff would log in and make personal
calls to the patients and have the ability to reschedule them
to different times if the current appointment time was no longer
Another mousetrap idea that came about while I was building
my first business revolved around the idea of networking. Networking
is one of the most time intensive aspects of building a business,
and it takes time to properly vet and screen business partners appropriately.
Instead of meeting with people one by one, it seemed
to me that someone should be able to form associations within different
markets that take all the screening upon themselves. So for a
medical based association, you would have members who represent
all the service providers a physician might need – a banker, lawyer,
accountant, printer, advertising agent, supplier, medical equipment
rep, a physician recruiter, etc. People develop these networks over
time, but by forming an association, a new business would be able
to jump start their work, and existing members would solidify their
referrals and standing within that industry.
Most new businesses, however, typically fit into the third mousetrap
category of an established business in an established market.
For many people who want to run a business and are willing to try
to outwork the competition, this can be a great option. All franchises
fall into this category as well as most professional careers such as
being a doctor, lawyer, accountant, or even most consultants. What
is very appealing to many people about this model, as well, is that it
gives people an opportunity to create more income for their households
while maintaining full time jobs. A janitor at a school that
drives an old pickup can easily start a lawn service with his lawn
mower, or start a handyman service with his tools, after his day job
ends and on weekends. Often these “side jobs” are great launching
pads for people who want to get out of dead-end jobs and enter
entrepreneurship once they can make enough money on their side
business to support themselves full time.
Do you have to be involved in the tech space to build a new
mousetrap in a new market? No, but you do need to know and read
about technologies in order to understand how they can potentially
be adapted by a marketplace. Just like you don’t have to work in
a certain business in order to build an improved mousetrap in an
existing market, you do need to talk to the people who perform
those jobs to understand their frustrations. This can be as simple
as joining community groups or simply speaking in more detail to
family and friends to develop your first idea. And do you need to
have capital or equipment in order to build a competing mousetrap
in an existing market? Again the answer is no. If your current
job is, for example, in sales, you could start a business giving sales
seminars to small business owners (and build your network at the
same time). Or if you want to do lawn care but you don’t own the
equipment, you might be able to find someone who will loan you
their lawnmower in exchange for an agreement to mow their lawn
with an additional promise of a rental fee that would be due at some
What this all circles back around to is the need to be a knowledge
seeker, to see an opportunity when it’s in front of you, and
to have the drive to make it work even if it means you might fail
the first time around. Take the time to learn from your friends,
family, and from as much literature as you can find. Eventually you
will have that “aha” moment where you begin to discover what the
market you would like to enter truly involves and just what kind of
mousetrap you need to develop: one that fits an existing market,
one that improves on an existing market, or one that creates a new
market from your product or service.
A business plan is a tool used by both existing and new businesses
to define their business and examine the market to decide
the best way to move forward with growth. Because business plans
can be time consuming, many businesses forgo their creation. This,
however, is a big mistake. By creating a business plan, especially for
a new business, you are basically trading time for a supercharger to
your business growth engine. Yes, you might not start as soon as
you’d like, but once you begin you will quickly find your competitors
in your rear view mirror because they won’t be as laser focused
in their efforts.
Professional business plans are robust documents that include
the following: an executive summary, situational analysis, known
risks, mission, vision, core values, market analysis, demographic report,
a SWOT analysis, a competitive analysis, a strategic overview,
the business objectives, a product and service strategy, a pricing
strategy, a promotional strategy, a channel strategy, an internal
marketing strategy, a marketing plan, a budget review, a financial
pro-forma, an exit plan, and a conclusion. Let’s look next at an example
of a scaled down version of a professional business plan for a fictitious
coffee shop that someone may want to open.