1. Money

The Two Paths to Starting a Business

Part 1: Starting a Business Based on Your Wants

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There are two paths to starting a business and while both paths may end up at the same place, with you running a successful established small business, one of the paths is a lot harder traveling than the other.

If you choose to travel the first path to starting a business, you've decided to start a business based on your wants. That is, you've decided that you want to do a particular thing, such as open a book store or provide Web site design services, and/or that you want to do this thing in a particular place.

Often people have very good reasons for choosing to go this route when starting a business. They have regular jobs or family obligations that tie them to a place, or possess a set of skills that they want to capitalize on. Many successful small businesses have been started because someone became passionate about a particular product or service (including mine)!

But if you decide to take this path to starting a business, you need to be aware that your path to business success may be much more circuitous and rock-strewn than if you had chosen the other path to starting a business.

If you choose this first path, you will be starting a business based entirely on your desires, rather than on the realities of the business environment. Wanting to do a particular thing in a particular place can be an especially troubling complication that can add years to your journey of successfully starting a business and even make success impossible.

What if, for instance, you insist on starting a book store in a town with a population of only 25,000 that already has seven book stores? Or decide that you are going to open a bed and breakfast in a place that's only accessible by air? Don't laugh; both of these are real-life starting a business examples - and both of these are businesses that failed.

Following the first path to starting a business can be very dangerous if you insist on following your dream without looking around to see who else has already implemented that dream. It can also be a bit like starting a business with blinders on; because you're so intent on doing what you want to do, you may not see other opportunities for starting a business that could be even more profitable.

If the first three rules of real estate are "Location! Location! Location!", then the first three rules of starting and running a successful small business are "Customers! Customers! Customers!" The true danger of following the first path to starting a business is that you ignore these three rules. Your idea of starting a business is based entirely on what you want to do or what you want to sell or on where you want to live, potentially ignoring your customers' wants and desires.

But there's a better route to starting a business which will give you a much better chance of success. Continue on to the next page...

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