Jews in Business: Should I Start My Own Business?
How to Evaluate a Potential Business Opportunity
Should I start my own business?
Written by Nate Ruben
Entrepreneurship is sexy. My aim in this article in to dive deeper into the factors I use to evaluate a potential business opportunity, and then to give specific recommendations for criteria others may use depending on where they currently find themselves professionally and financially.
Hustle porn1 has taken over social media and more people than ever believe they have what it takes to start their own business. Nearly every day I see a connection on LinkedIn or Instagram passionately espousing content they recently heard from a big-name marketer/salesman (i.e. Gary Vee, Grant Cardone, Billy Gene). While the allure is rightfully deserved, far too many people are “chasing the dream” entirely for the end pursuit of material wealth and status. There is nothing wrong with these potential outcomes. However, seeing them as anything else but byproducts of a life well-lived and business well-built is a dangerous game that leads most to ruin2.
As the economy recovered from the 2007-2008 financial crises, Americans began starting businesses at higher rates3, and even more have adopted the “side hustle” practice4. Previously, my Ruben Digital team member (and sister) Hannah Ruben wrote an article5 about how to examine if your hobby is startup material. She scratched the surface on examining the conditions that drive people to start their own businesses, the questions people should ask themselves prior to launching a company, and then some great first steps to take.
The Four [Business] Questions
Can I spend the next 5-10 years of my life passionate about my business?
As I write this article, I am currently nine months into year five. When I filed the LLC for Ruben Digital Media in June of 2014, I knew I was passionate about helping other business owners and brand personalities. For a long time, I bounced around from job to job in industries varying from Auto Services (my grandfather’s carwash) to Education (assistant Hebrew school teacher and summer school tutor) to Horticulture (nursery manager at South Carolina Botanical Garden) and Retail (sales associated at Teavana). None of these individually was fulfilling. What I did start to recognize as my passion was helping other passionate people achieve their goals. I decided I would learn the necessary digital marketing skills to help business owners reach a larger audience, tell their story better, and ultimately increase sales revenue.
Today, I find quite a bit of motivation in improving my own business. Not only am I just as passionate about marketing, but I am even more passionate about the art and science of building a business. I could spend the next 15-20 years doing this and never regretting a day.
Does running my business mean utilizing my skills and carrying out tasks I would enjoy doing even without the money?
Most of my early memories revolve around school. As early as middle school I carved out a lane in graphic design and presentation preparation. In fact, in my 6th grade graphic design class, a student asked me to photoshop his mole from his face for a magazine cover. In 8th grade, I was tasked with making the photo-slideshows for our end of trimester (our years were split in 3 trimesters instead of 4 quarters) team presentations. I loved the ability to curate images, create funny captions, and even select accompanying music. By college, I tried to get as far away as possible from doing the hard work of writing our group project plan, so I always volunteered to assemble the material in a powerpoint/prezi7, and then pitch it to the class.
Why does this matter? I was blessed to learn early on what I excelled at (visual and oral communication) and then created an opportunity to earn a living deploying these skills. Further, the two primary reasons someone starts their own business are: (1) To be their own boss; (2) to pursue their passion6. In order to be my own boss and get the job done, I had to make sure these were things I loved to do, otherwise they were not going to get done.
Does the market want to buy the good/service you are offering?
Anyone can dream up what they believe to be the next billion-dollar idea. How many times have you heard “we want to be the (fill in the blank big company) of the (fill in the blank industry).” I once told someone I wanted to create the Viagra of Medical Marijuana, so I’m no exception to this lofty thinking. And there is nothing wrong with having visions of grandeur. But how do you know if your visions are actually delusions? Some important things to consider with your idea:
- Is this timing right for this idea? Based on today’s landscape, if I can get my offering to the public, will they be ready to engage with me?
- Who are my competitors and how can I offer a different approach to the problem we both solve?
- Can I implement a pricing model and sales proposition that differentiates me as a value buy instead of a commodity?
If you cannot answer the above questions in good faith, there is a good chance your idea needs more work. Test out your business plan with some close friends and colleagues. Ask for them to be as critical as possible because you are going to need some serious stress testing to find the holes in your plan.
Am I willing to sacrifice my time and resources to get those first clients and turn my dream into a reality?
This last question will largely be influenced by where you are at in your life professionally and financially. I had the privilege of starting Ruben Digital when I was 21 years old, I still lived with my parents, I had no college debt (because I was a drop out) and I had a few part-time jobs going for me. The only financial sacrifice I had to make was dipping into my college savings to get started ($800), and then a few more cash-flow injections (two $4,000 investments) after key indicators that we would be successful and needed to expand resources. However, I also gave up nearly all my free-time. My life consisted of day job, gym, food, and new business. Whenever I did make time for friends, I would bring my computer with me so at least 50% or more of that time was productive.
Now, take the person who is in significant debt, or they have large family obligations (i.e. children or sick family members). This is a much more precarious route, and I would suggest a business venture with low overhead and low barrier to entry (such as drop shipping or consulting). Here your primary expense will be branding and customer acquisition (sales and marketing), as well as your time to research.
If you are looking to start a business with a large startup capital requirement, such as a brick and mortar establishment, or the renting/leasing of heavy machinery, you may be better served to bring on investors or co-founders. While some people start a business so they can experience total control and insist on being 100% owners, you ultimately must weigh your options and be willing to take an accurate look at yourself. In part two of this series, I will explore the various situations and variables I have encountered as they relate to co-founders and investors. Until then, enjoy this great article from Nicolas Cole on 6 Ways to Identify a Bad Business Partner8.
Founder | Ruben Digital | @naterubenrdm on Twitter, LinkedIn, Instagram
#muchlove #bigthingstocome #rubendigital #chitribe #entrepreneurship #evaluatingbusiness
- Hustle Porn: https://qz.com/work/1458073/reddit-co-founder-alexis-ohanian-is-taking-a-stand-against-hustle-porn/
- Small Business Failure Rate: https://www.lendingtree.com/business/small/failure-rate/
- Small Business Startup Rate: https://lendedu.com/blog/small-business-statistics/
- Side-hustle stats: https://www.cnbc.com/2018/06/22/these-are-millennials-favorite-side-hustles-and-heres-how-much-theyre-earning.html
- Ruben Digital blog post: https://rubendigital.com/2016/10/is-your-hobby-startup-material/
- General stats that my be useful: https://www.guidantfinancial.com/small-business-trends/
- Prezi: https://prezi.com
- Drop Shipping: https://www.shopify.com/guides/dropshipping
- 6 Ways to Identify a Bad Business Partner: https://medium.com/@nicolascole77/6-ways-to-identify-a-bad-business-partner-77b6ea9c021c