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The Two Paths to Starting a Business

Starting a Business Based on Market Demands is Easiest


The Two Paths to Starting a Business

Pick the Right Path to Starting a Business

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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.

The First Path - A Business Based on Your Wants

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 (see Learn who to Do Your Own Market Research and 6 Ways to Find Out What the Competition is Up To). 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 (see  Don’t do what you love).

The Second Path - Starting a Business Based on Customer (Market) Needs

The second path to starting your own business focuses on starting a business based on your potential customers' needs. It involves researching your customers' wants and desires, and then choosing to start a business that meets their wants.

When you follow the second path to starting your own business, your road to success is clear and unencumbered, because you're starting a business where your customers live, either figuratively or literally.

The interesting thing about this path to starting your own business is that even though it's the fastest path to success, it has two branches. Once you've studied your potential customers' needs, you can either decide to take your product or service to the customer, or you can examine the customers' needs and create a business tailored to meet those needs, filling a niche market.

For example, if it is your dream to run a book store, you can do the research and find a city or town filled with literate, book-loving people which doesn't already have enough book stores to fill the reading needs of potential customers and locate your new book store there. Or, if you live in the small town of 25,000 with seven existing book stores that I used as an example on the previous page, you study your potential customers and determine what needs of theirs aren't yet being met, creating a business to fit that niche market.

Perhaps there are enough potential customers in that particular town to support a bookstore specializing in religious books, for instance. Or perhaps the key to successfully starting your own business in that location is combining your passion for selling books with some other product or service that will appeal to those 25,000 people, such as starting a business that sells herbal products (with books on related topics as a sideline).

Businesses can't exist for any length of time without customers, so if you want to start your own business, you have to put your customers first, not your own desires. While I run a successful small business now, I investigated and rejected scores of businesses before I started this one, because they just weren't viable in terms of the needs of my potential customers.

Remember the Robert Frost poem? "..two paths diverged in a yellow wood." When it comes to starting your own business, letting your customers' needs guide you down the path will make all the difference to your success.

See also:

Thinking of Starting a Small Business?

Top 10 Business Mistakes When Starting a Business

Why Do Small Businesses Fail?

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