Most people want to start their own business they want to make more money they wants to quit their jobs but very few of them actually understand what it takes to build a successful business. And this video I will go through four things that you need to have in place before you even start your business.
1. You need to first define what success is for you.
2. You need to decide how much time you can allocate to reach next level of success.
3. You need to decide how much money can you invest into this business. There’s no such a thing as a hundred percent free business.
4. You need to find something that you somewhat enjoy doing at least. it’s not required to be passionate about it although it is ideal. You want to offer a service that you like offering to other people.
Hey everyone. Oz here, recording from Los Angeles. I am at a rooftop of my hotel, the hotel that I’m staying at, that is by the airport, so there is some background noise. I hope you don’t mind. I got here last night for a three day event. I’m a part of what is called a mastermind, networking event pretty much. It is for those of you who might not know what a mastermind is, it is pretty much a networking event that you pay high dollar amounts to be a part of, and you’re able to attend business meetings with other business owners at very high levels.
I pay $30,000 a year to be a part of this networking group, and we gather every quarter and discuss different business growth strategies, and scaling our businesses further, and things like that. It all consists of seven and eight figure business owners in there, from a certain sector of the market. That’s why I travel quite a bit to different locations, so this time it is in Los Angeles.
But I wanted to chime in and answer a very important question, that I ask quite a bit to the people that I talk to, and that is what does it take to build a successful business? See, the thing is, a lot of people want to own businesses, but they don’t really have a clear answer to that question. That question begs for a very clear understanding of what that is for you, because it changes person to person and also business type to business type, right?
What does it take to build a successful business?
What does it take to build a successful business? Well, first you’ve got to define that for yourself. What does that mean for you to build a successful business? Or, even better, why do you want to start and build a business? A lot of people do not have a specific answer to that question. I know the most common answer would be, “Well, I want to make more money.” Of course, everyone starts at that level if you are trying to increase your level of comfort or your income, or create side income.
Of course, starting a business might sound like a great idea, but one of the reasons that businesses fail is the lack of clarity on how they define success. How do you know when you’re successful? At what level do you consider your business to be a success? Without deciding on those factors, without answering those questions, you can’t really start a business and succeed, because it’s like driving around and trying to get to a destination that you haven’t really decided on.
Like, how likely are you to get there?
Even if you get there, how do you know that you got there, right? That type of thing. First, you have to decide what success means to you. For some people, it might mean an additional $2-$5000 a month and that’s actually a great goal. Because you’re being realistic, especially in comparison to your current situation. Let’s say if you have a job that pays you $4000 right now, but your current standard of living requires $5000 a month, so you have a gap of $1000 a month.
Then the natural question is how do you close that gap? Well, either you keep changing jobs until you get a raise that gets you to 5000, or you add skills to what you know, on top of what you know right now, so skills are more marketable, that means you can get hired at a higher level, or you start a business. Starting a business gives you the leverage of scale.
Meaning that initially you can be making the additional $2000, but over time, you can be making five figures a month. You can be making 10 grand, 15 grand, 20 grand, and then over time you can do 50 grand, then over time you can do $100,000 a month. That means you’ve just built yourself a million dollar business. You can’t really do that with a job, right? There’s a ceiling to what you can make through a job.
First, you’ve got to define what success is.
Success could mean different things in different times. That’s why you have to break down those numbers. What does success mean for your business within the first three months? Then six months, then the next 12 months. Once you know that, you can work your way from that point, so you don’t really start with the idea of starting a business. You start with what you want to accomplish. It’s kind of backwards, right?
That’s why people are not used to thinking like this, but business owners think like that all the time. They start with the end goal in mind, so if I want to generate a million dollars in revenue by the end of 2019, then I’ve got to start with that and count it backwards to see what kind of effort it will take for me to work on day-to-day to get to that number. But people who haven’t been exposed to running businesses, they’re not used to thinking that way.
So, what does it take to build a successful business?
The first part is defining success, right? That’s number one. You’ve got to define what success means to you, and it’s okay to start small. The goal is not to come up with this grand number that sounds really cool on people, but when you’re thinking about it, it’s not even sounding realistic to you. I sometimes call people out when they tell me, “I want to build a multimillion business.” Well, multimillion can mean a million or it can mean 500 million. What does that even mean?
First, you’ve got to define that, but how much time are you giving yourself to get to that level? If you’re planning to build a business to two million in two months, you’re not being realistic buddy, right? You’ve got to come to terms with how much time you’re going to be putting into it, and what business? Is the business a good business that’s going to give you those figures, right?
First, let’s start with the planning phase.
You’ve got to decide what success means to you at this point. Once you decide that, then you start looking for opportunities that will give you that outcome. It’s an input and output method. You have a certain amount of input that is available to you right now. What does that mean? Well, you have a finite amount of time today. Maybe you have kids, I have two kids. Maybe you’re married, you have a wife, husband, you have a lot of personal responsibilities and on top of that, you have a job that you have an obligation to fulfill in order for you to keep the roof over your head, so your input, meaning the time that you can allocate to a job, is limited.
First, you’ve got to define how much time can you allocate to a business? Because that will determine, that will help you determine what kind of business you can start. Because if you have three hours to dedicate to a business per day, and if you’re planning to start a restaurant business, I’m sorry, but that’s a failed plan. It’s dead on arrival. You’re not going to get there. It’s not logical, right?
Dedicate to building a successful business
Once you determine, let’s say you have three hours of focused time, you can just dedicate to building your business. Perfect. You need to find a business that allows you to build it on the side, without disrupting, without distracting you from what you’re doing. There are two schools of thoughts from gurus. One is if you’re starting a business, burn your ships, put yourself against a corner, that’s the only way you’re going to succeed. I believe that that’s a good fit for certain type of personality.
If you’re highly, highly entrepreneurial, and if you perform under those conditions before, that is very true. But for most people who have family to take care of, who has fixed expenses, you can’t just quit your job and burn your ships and start a business. That’s a silly idea. Because that’s going to increase your level of stress through the roof and when people are stressful, their hormones act up and they can’t really make healthy decisions.
Don’t forget that it’s not just you. I mean, if you’re just by yourself, you can’t even sleep on the street until you build your business. I don’t care, but if you have kids and family and things like that, you have obligations, and you can’t just quit what you’re doing right now and start a business, so you have to find a business that allows you to grow it while you do what you do until you don’t need to really be doing what you’re doing, right?
Finding a business that fits
All right, the second part is finding a business that fits, that’s in line, that is aligned with where you want to go. Once you find that business that allows you to start it with limited time, then the third part is how much capital do you have to start a business? There are businesses you can build part time, but they might require licensing, they might require you to rent an office and get locked into a five year lease, and they might require 50-100 grand upfront for you to start building, right?
There are a lot of businesses like that, too. The question is do you have that much? Are you okay with spending that much, investing into your business that much? If you’re not, then you’ve got to decide how much money can you allocate? We talked about the definition of success, number one. Number two, definition of time allocation. Number three, definition of finance allocation. There’s really no such a thing as starting a business with zero finances. You’ve got to put in something. Even if you need a website, that costs domain and hosting and things like that, so you’re not going to start a business with zero dollars.
They will require some level of financial commitment, so you’ve got to decide how much are you willing to invest in yourself to build that business? And the fourth thing is, is the business you’re starting moving your juices? Meaning that when you’re doing your research for a business to start, you’ve got to be excited about doing that business, right? If you’re starting a business that you know that you’re not going to be really enjoying, what’s the point of doing that?
I mean, you might say, “Well Oz, the point is to make more money.” I understand that, but you can’t really sustain the growth of anything without really at least liking it. I’m not saying follow your passion and things like that. Following your passion and finding something that you’re passionate about, that also makes you a lot of money is a luxury. People say that all the time, it’s so cliché. Like, find your passion and follow your passion.
Well yeah, your passion at the same time, especially if you live in the survival mode that you’re trying to grow, you’re trying to get to six figures a year, make 10,000+, 20, 30, 40,000, you’ve got to first build a business that you somehow like, but then if you build it to a level that sustains itself, then you can follow your passion all you want, or find a business that does. If you find both, you’re good. You’re awesome. If you’re passionate about let’s say based on what I do, we do business loan brokerage and things like that. We teach that.
If you’re naturally passionate about it, and it makes a lot of money, then boom, you have the best of both worlds. But that’s the fourth thing. You’ve got to somehow like what you’re doing. Something needs to move you. Something needs to help you see that you’re helping others solve their problem, right? I guess that’s a better way to put it. You’ve got to find a business that solves a problem for other people because don’t forget that the money you make will be in direct proportion to the size of the problem you solve for your customers, for other people.
When you put it, all four of them together, you have the recipe for success for a business. Then from reaching your initial goal, let’s say initial goal is $3000 per month, you can take it to 10,000, 15,000, 30,000, 50,000, then 100,000 and beyond because you have the formula, the recipe, you’ve got to set up the right way. I want you guys to think about all of that before you start thinking about building your business, all right?
I will leave you with that. Cheers from Los Angeles and comment below if this makes sense, or if you have any questions, and if you haven’t subscribed, subscribe to my channel.