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Disadvantages
Having to earn money at something inevitably changes the way you feel about it. It’s one thing to go fishing or work in your garden to take your mind off your daily life and another thing altogether to take a customer on a fishing trip or design a client’s garden. The focus shifts; it’s no longer about where you like to fish or what plants you like—it’s about keeping the customer happy, on their schedule, and doing it in such a way that you still make money. Remember, even if it’s fishing, there’s a reason they call it “work.”
Before jumping into a hobby-related business, be certain to realistically assess the income potential. Hobby- and recreation-related fields tend to attract lots of competitors—many of whom don’t need to make a full-time income. When a field contains many people who aren’t financially sensitive it tends to reduce the income for all. You may be able to make far more money in a less attractive business. Freelance newspaper writers, for example, generally earn a pittance, because so many people want to see their name in print. Those who write far-less-glamorous technical manuals can actually earn a living.
Having to earn money at something inevitably changes the way you feel about it.
There are two times in your life when following your passion—whether in business or otherwise—is most advised: when you’re young and when you’re older. If you dream of a life near the slopes, be a ski instructor in your twenties. That’s when you typically have the greatest physical capability, the fewest financial responsibilities, and the most years ahead to do something more “serious.”
Likewise, when you’re a little older—your kids are out of college, you have some money saved, and you’re not totally dependent on income for your livelihood—then you’re better able to deal with the financial reality of a business that follows your passion.
Of course, for some people—those who are truly passionate about something, truly skilled, or just lucky—doing what you love can lead to an extremely satisfying life. Last summer, our guide on a river in the Australian rain forest said he had given up his day job, bought a boat, and decided to lead tours. For years, he was on the same river, answering the same questions from tourists, but he still loved every minute of it.
Can you turn your passion into a business? Perhaps. But don’t forget the other side: you can become passionate about your business. I’ve met many entrepreneurs who would never have imagined that one day they’d care deeply about granite or dental hygiene or employee recruitment. And they go fishing on the weekend.
Yes, but Is It a Business?
A friend took me to dinner to pick my brain about her new business. She was excited: she had a great idea, had lined up a strategic partner, and was raring to go. She had visions of raising millions of dollars and going on the Internet. I felt terrible telling her that while, indeed, it was a great idea, it was nevertheless a lousy business.
What were the problems—and there were many of them—with my friend’s idea?
First, like many novice entrepreneurs, her idea was too grandiose. She had too many services, serving too diverse a market, to be able to develop any one aspect successfully. The single biggest problem facing entrepreneurs is a lack of focus. It’s a big enough challenge to stay focused on even a narrowly defined market with a clearly delineated product; when you take on too much, especially in the early days of a company, you almost guarantee defeat. My friend’s business could have easily, and better, been broken up into two or three businesses, any one of which might have succeeded, but she was committed to serving the whole market.
Many entrepreneurs, of course, fall to the other extreme: their business idea is so narrowly defined that it’s actually the basis for just one product or even one feature of a product rather than a whole business. This is particularly true in two categories: consumer products and technology. Let’s say, for example, that you have a great recipe for a new kind of sauce. One sauce, no matter how terrific, might not be enough to build a whole company around; you might need to come up with a line of sauces.
When your business idea is too limited, you may not be able to grow big enough to survive. Even if you are successful, you’re vulnerable if a larger company later decides to mimic your idea. The good news—and this is particularly true in technology or if you can develop a cult-like following of customers—is that your company can become an excellent candidate to be acquired by another that wants to include your product as part of their offerings. You won’t be your own boss, but you might get a pile of cash.
The single biggest problem facing entrepreneurs is lack of focus.
The next biggest problem in my friend’s business plan was she hadn’t considered the real costs of delivering her proposed services. One of Rhonda’s Rules is “Things take longer and cost more than planned.” To be successful, my friend’s company depended on achieving lower costs than her competitors. She thought she could do this just because she was operating on the Internet. Get real! Internet businesses are just like landbased companies: you still need customer service, employees, and substantial marketing efforts. If you’re depending on cost savings for a competitive advantage, thoroughly research and prove that such savings can actually be achieved and sustained.
Finally, my friend’s biggest problem was my friend. She’s stubborn, unwilling to listen, insistent on getting and keeping control. (So why is she my friend? I’ll have to discuss that another time….) It’s not enough to have a great idea, or even great operations; a company needs leadership and management. You can’t build a business without building a team. You have to work with people, not just have them work for you.
It’s not always easy to scale back your vision or your need to be in charge. But if you want to grow a company, not just make yourself a job, you’ve got to consider whether your good idea can really be a good business.
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Turning Dreams into Reality
Turning Dreams into Reality
How do you make your dreams come true? What makes the difference between those who just dream and those who make their entrepreneurial dreams come true?
The other day I realized that I’m quite a dreamer. Almost every day, I spend some time imagining what
