What Business to Start in 2023

Summary

This video offers a framework for deciding which business opportunity to pursue. Layla shares a 10-step process she and Alex used to build acquisition.com, focusing on strategy and decision filters. The steps include assessing market opportunities, margins, strengths, and personal preferences. She emphasizes creating a mission statement and identifying core values as key filters for making decisions. Ultimately, Layla advises choosing a business where the worst-case scenario is manageable, instead of chasing potential profits, and cautions against relying on emotions or external influences when making a decision.

Takeaways

• 📋 Start by identifying all business opportunities you're considering and write them down.
• 🔍 Analyze the pros and cons of each opportunity, considering market growth, typical margins, and overall opportunity.
• ❌ Eliminate any business opportunities that have more cons than pros, regardless of personal feelings.
• 👍 Write down what you like and dislike about each opportunity to ensure you're personally aligned with the business.
• 💪 Consider your strengths and weaknesses in relation to each opportunity and eliminate those that don't match your core skills.
• 🎯 Define a mission statement for your business, as it serves as a decision-making filter for future opportunities.
• 💡 Identify the core values required to achieve your mission and ensure they align with your personal values.
• ✅ Narrow down the remaining opportunities and check if they align with your mission and values.
• 💭 Consider the worst-case scenario for each opportunity, choosing the one where you can handle the downside.
• 🧠 Focus on choosing a business based on risk tolerance, not just potential profit, and make decisions accordingly.

Q & A

What is the main focus of the video?

The video focuses on helping individuals figure out which business opportunity to pursue using a strategic decision-making process.

Why does the speaker emphasize the need for a strategy when choosing a business opportunity?

The speaker emphasizes strategy because without it, having multiple opportunities can be overwhelming. A strategy helps create decision filters to narrow down and evaluate options effectively.

What is the first step in narrowing down business opportunities?

The first step is to write down the top business opportunities you are considering. This gives you a clear view of your options before applying further filters.

How does the speaker suggest evaluating the pros and cons of each business opportunity?

The speaker suggests evaluating opportunities based on market growth, margins, and overall market potential. For each opportunity, you should assess whether these factors are a pro or con.

What should be done with opportunities that have more cons than pros?

Opportunities with more cons than pros should be immediately eliminated from consideration, regardless of personal feelings toward them.

Why is it important to consider your likes and dislikes about each business opportunity?

It's important because even if a business has high potential, if you dislike the core aspects of the business, you are less likely to succeed. The speaker advises eliminating opportunities you dislike more than you like.

How does the speaker recommend aligning business opportunities with personal strengths and weaknesses?

The speaker recommends choosing business opportunities that align with your core strengths. If an opportunity doesn't require your strengths, it's better to eliminate it.

What role does a mission statement play in choosing a business?

A mission statement acts as a decision-making filter. It clarifies the purpose of the business, and any opportunity that doesn’t align with this mission should not be pursued.

What should be the final consideration when choosing between two business opportunities?

The final consideration is to evaluate the worst-case scenario for each opportunity. The speaker advises choosing the option where you can live with the worst-case outcome.

What is the speaker's advice on avoiding emotional decision-making in business?

The speaker advises not to rely on emotions or how much money an opportunity could make when starting a business. Instead, consider how much you could potentially lose if it fails and whether you can live with that outcome.

Outlines

00:00

🧭 How to Choose the Right Business Opportunity

In this paragraph, the speaker introduces the challenge of choosing the right business to start. They explain that while they don't typically give advice on this topic, they receive many inquiries about it. Using their experience with Acquisition.com as an example, they describe how having too many business opportunities can be overwhelming without a strategy. The solution involves creating decision filters through a strategy, which helps narrow down the options by passing each opportunity through constraints and evaluating if they align.

05:01

📊 Evaluating Market Opportunities and Margins

Here, the speaker outlines a 10-step process for evaluating business opportunities. The first few steps involve listing out potential business ideas and analyzing the pros and cons of each one. Factors such as market growth, margins, and opportunities in specific industries are emphasized. For example, comparing the market growth of Airbnb with an online education business helps to evaluate which has better potential. If a business idea has more cons than pros, it should be eliminated, regardless of personal feelings.

10:03

✅ Likes, Dislikes, Strengths, and Weaknesses in Business Opportunities

The speaker discusses the importance of writing down personal likes and dislikes about each business opportunity, as well as assessing strengths and weaknesses. They provide examples from their own experience, where they identified their core strengths in marketing and operational infrastructure, which helped shape the direction of Acquisition.com. Even when an opportunity has high potential, if the founders dislike the industry or aspects of the business, it's better to eliminate it. The importance of aligning strengths with the needs of the business is also highlighted.

🎯 Creating a Mission Statement for Your Business

In this paragraph, the speaker emphasizes the importance of establishing a mission statement for the business before delving into specific details. Using Acquisition.com and a previous gym business as examples, they show how a clear mission can act as the first filter for evaluating new opportunities. For any new venture, the mission statement should guide decision-making and help determine whether the opportunity aligns with long-term goals. Without a strong mission, it’s difficult to assess whether an idea is worth pursuing.

💡 Aligning Values with Business Goals

The speaker shifts focus to the values needed to achieve the mission in an authentic way. They stress that core values should already exist within the entrepreneur and not be aspirational qualities. The top three values should act as decision-making filters that align with the mission. For example, 'competitive greatness' is one of their values, and it drives them toward achieving their business goals. Values help shape the way the mission is executed and further refine which opportunities align with the entrepreneur’s path.

🔍 Assessing Worst-Case Scenarios in Business Opportunities

In this part, the speaker introduces the final step of the decision-making process: evaluating the worst-case scenario for each opportunity. They provide an example comparing the risks of starting a brick-and-mortar coffee shop versus an online store. The advice is to choose the opportunity with the downside you can live with. Rather than focusing on potential profits, successful business leaders evaluate the risks they are willing to take. The speaker reinforces that emotions and hypothetical big gains should not dictate the final decision.

🚀 Next Steps: From Zero to a Million

The speaker concludes by directing the audience to another video on how to grow a business from zero to one million dollars. This next step will provide tactical advice for scaling a business after deciding on the right opportunity. It serves as a follow-up to the strategic decision-making framework discussed throughout the video.

Keywords

💡Opportunities

Opportunities refer to the various business ideas or ventures a person might consider pursuing. In the video, the speaker highlights how having too many opportunities without a strategy can be overwhelming. The process shared helps in filtering and selecting the best-suited opportunity based on personal strengths, market conditions, and risks.

💡Strategy

Strategy is defined as a set of constraints and decision filters used to achieve a goal. The speaker explains that a lack of strategy often leads to too many choices and confusion. A well-defined strategy helps in narrowing down opportunities by filtering them through specific criteria such as market growth, personal strengths, and potential risks.

💡Decision filters

Decision filters are the criteria or constraints applied to evaluate whether a particular opportunity fits within a set strategy. These filters help individuals assess if a business idea aligns with their goals, strengths, and values. The speaker stresses the importance of using decision filters to eliminate options that don’t align with your mission or values.

💡Market opportunity

Market opportunity refers to the potential for success within a specific industry or market. The speaker emphasizes analyzing the market growth rate and evaluating whether there is space for the business in that market. It's crucial to consider whether the market presents a 'pro' or 'con' for the business idea being considered.

💡Margins

Margins represent the profitability of a business, typically calculated as the difference between sales revenue and production costs. Higher margins indicate more profit potential. In the video, the speaker suggests comparing margins across different opportunities (e.g., Airbnb vs. online education) as a critical step in evaluating whether a business is worth pursuing.

💡Strengths and weaknesses

Strengths and weaknesses refer to personal or team capabilities that align with the business needs. The speaker advises evaluating how well your core strengths fit with the business model of each opportunity. For example, the speaker and her partner chose acquisition.com because it aligned with their strengths in marketing and operations, whereas other opportunities were rejected despite favorable market conditions.

💡Mission statement

A mission statement defines the purpose and guiding principles of a business. The speaker stresses the importance of crafting a mission statement early in the decision-making process to clarify what the business aims to achieve. Every opportunity should align with this mission, serving as a filter for future decisions. For instance, acquisition.com’s mission is to document and share best business practices.

💡Core values

Core values are fundamental beliefs or principles that guide behavior and decision-making in business. The speaker highlights how identifying and embodying values such as competitive greatness can provide a framework for building a business. The chosen values help determine whether a business opportunity aligns with the individual's approach and mission.

💡Worst-case scenario

The worst-case scenario involves considering the most negative potential outcome if the business fails. The speaker advises basing decisions on which business has a more tolerable downside, rather than focusing solely on potential profits. For example, the decision between opening a brick-and-mortar store versus an online store is made by evaluating which failure scenario (losing a lease vs. a smaller financial loss) is easier to live with.

💡Emotional decision-making

Emotional decision-making refers to making business choices based on feelings rather than objective analysis. The speaker warns against letting emotions guide decisions, particularly when assessing opportunities that might seem exciting or lucrative but carry significant risk. Instead, decisions should be grounded in strategy, mission, and a realistic assessment of risks.

Highlights

People struggle with finding the right business opportunity due to lack of strategy.

To identify the right opportunity, create a strategy with decision filters based on personal goals and constraints.

Step 1: Write down all possible business opportunities you're considering.

Step 2: Evaluate the pros and cons of each opportunity, focusing on market growth, margin, and overall potential.

Opportunities with more cons than pros should be discarded, regardless of how appealing they may seem.

Consider personal likes and dislikes when analyzing each business opportunity to ensure long-term interest and success.

Step 3: Identify personal strengths and weaknesses related to each business idea. Opportunities that don't align with core strengths should be discarded.

The best business opportunities align with both your personal strengths and the market potential.

Create a mission statement that aligns with your goals and filters opportunities based on how they fit into your larger purpose.

Values are the next decision filter after defining the mission. Choose values that align with your mission and shape how you'll achieve it.

The best way to decide between final business options is to assess the worst-case scenario and pick the one you can live with if it fails.

When choosing a business, avoid being swayed by how much money it might make. Instead, focus on potential losses and risks.

Do not rely on emotions when starting a business; make decisions based on structured frameworks and strategic filtering.

Choosing a business where the downside risk is manageable gives you the ability to pivot or restart without catastrophic losses.

The framework provided encourages decision-making based on worst-case scenario analysis, reducing the emotional impact of failure.

Transcripts

today we are going to talk about how to

figure out what business to start this

is not something I normally talk about

in fact I don't usually talk about how

to start a business but I have so many

people coming to me with questions of

Layla I have so many opportunities how

do I figure out which one is right for

me what I'm going to share with you

today is really the process that Alex

and I used to figure out that

acquisition.com was the opportunity we

want to pursue there are a million

opportunities out there and our list of

opportunities in terms of all the

different businesses that we could start

was almost unending if you don't have a

framework around figuring it out it can

become very overwhelming and I

completely understand that so my goal

with this video is that you walk away

feeling less overwhelmed than when you

started watching the video so the first

point I want to make when you lack

strategy you have a lot of opportunities

the reason that you're watching this

video right now and you're thinking I

need to figure out what opportunity to

pursue the issue is they don't have a

strategy what I want to First help you

create is figure out what strategy

you're going to pursue and then the

constraints around that strategy

constraints are decision filters

strategy is a series of constrained that

you create or conditions in order to get

to a goal and then those constraints are

really decision filters in which you

filter all opportunities through those

constraints and say do they pass or do

they not pass if you have good decision

filters most opportunities are good

opportunities they are just not your

opportunities so what I'd like you to do

is honestly just do this live with me I

really come down to 10 steps to figuring

out what business opportunity to pursue

if you have three four five

opportunities that you're thinking of

what I want you to do is pause this

video and write those down because we're

going to go through it line by line

write down all the opportunities that

you have what are the top five

opportunities that are out there in

terms of businesses that you could

pursue step number two is I want you to

write down the pros and cons of each

what I want you to think about with pros

and cons is what's the market

opportunity if you have Airbnb as one of

your opportunities go Google Airbnb

right now and look at the market growth

rate at what rate is the market growing

and then compare that across all the

five opportunities you have would you

consider the market opportunity Pro or

con second piece is margin I want you to

take each of those opportunities that

you have and Google what is the typical

margin in that industry and then look at

them and in comparison with the margin

for Airbnb versus online education

business be a pro or a con one might be

10 one might be 50 obviously higher

margins are better the third is really

the market opportunity so you might see

the growth rate in an industry is high

but is there an opportunity for your

business in that market is the growth

rate the market opportunity and the

margin considered a pro or con I'm not

saying this is right or this is the

standard this is just what I used to

figure out acquisition.com now the next

step is whatever ones out of those have

more cons than Pros toss it immediately

it doesn't matter how you feel about the

opportunity if there are more cons than

there are Pros immediately cross it out

so do that before going to the next step

I want you to write down your likes and

dislikes about each of those

opportunities so say you've got Airbnb

and the average margin is going to be

you know all in 30 it's got a pretty

good growth rate decent opportunity so

eyes what are your likes and dislikes do

you like real estate do you like

managing tenants do you like managing

multiple houses or do you dislike those

things do you want to have a team do you

want to not have a team which businesses

would require those things write down

all the things that you like and don't

like about what you currently know about

each opportunity because here's the

thing you're not going to know

everything that goes in every

opportunity but you do know off the bat

do you like it or not like it and here's

where a lot of people make the mistake

is they pick something that might be the

best opportunity it might have all the

best growth rate it might have the best

margins and they hate it if you

hate it it's not gonna work second piece

of that is that anything that you

dislike more than you like crossed off

immediately it doesn't matter if it's a

billion dollar opportunity crossed off

right now the fifth is I want you to

write down your strengths and your

weaknesses in relation to each

opportunity if I look at acquisition.com

listen to how me and Alex thought about

this Alex is a fantastic marketer he's

so good at social media and content all

these things we can put so much content

out there Alex is so good at doing that

eventually we'll get people that just

Google our name and want to invest their

business is with us and on the other

side I'm very good at operationalizing

infrastructure and recruiting which then

we happen to build around

acquisition.com's core infrastructure so

the business was built around both of

our core strengths we looked at other

businesses such as online weight loss we

were like we could build the biggest

health and fitness online company in the

industry because that's something that's

a core strength of both of ours we could

be forward-facing we could be in the

fitness industry we have background

industry knowledge guess what we both

hate that idea and so though we have

more industry knowledge and we had all

the market opportunity and everything

was liner favor it was not something

that we wanted to do now that you've

identified where you're strong and where

you're weak where your core strengths

align with the core needs of the

business any opportunities that you have

on there where it does not involve your

core strength is cross those out and now

what you're left with are probably the

opportunities that have Market

opportunity have margin have a good

growth rate what you like and you're

good at and that's what you want and now

once you have those what we're going to

do is we're going to create your mission

statement you don't have to have a

business before you decide what the

mission is for acquisition.com we were

not 100 sure with the business we wanted

to look like but we knew that we wanted

to document and share the best practices

of building a world-class business so we

started with that mission statement and

then we said what does that company look

like what's your two statement the

purpose of this business is two the

purpose that I'm on the mission I have

is two so like I said ours is two

documented share the best practices of

building a world-class business Jim

launched we had gym Walsh for a very

long time the mission was is to bring

the industry from its knees to its feet

the gym industry was falling and we

wanted to make sure that we could

actually bring it back up and so every

business is going to have a different

Mission but figuring out what your

mission is before you get into all the

hairy details is more important and the

mission is your first decision making

filter so every opportunity that you

come across if it doesn't fit with that

mission you're not going to pursue it so

you have to understand that if somebody

came to me and said Layla I want to make

a TV show about you guys that sounds

terrible and horrible in all many ways

but at the same time is that going to

help us document and share the best

practices of building world-class

business the answer is yes why am I

making YouTube videos why am I making

tick tocks I'm making Twitter because

the mission is to document and share we

bring all of those things through the

decision making filter why do we have

free courses on acquisition.com to put

them through this decision making folder

because that's the mission so once

you've identified and just get a rough

outline listen it doesn't even be

perfect this doesn't even be something

that sounds amazing like you can figure

out the language later but like

ultimately what do you want to do why do

you want to do that opportunity now you

have to say what is required to succeed

at that mission what values must I hold

in order to achieve that mission in a

way that's authentic to me and that's

the question I ask myself what values

are required of me to achieve this

mission that I already hold that a lot

of people think core values they think

these are things that I want to be these

are things that I should be showing all

the time but the thing is if you start

talking about those core values you're

going to start embodying them more and

more so what you want to do is you want

to pick out the values the top three

that are most likely that if you embody

them will get you to your mission the

caveat is that you should already have

these you know for us examples we have

competitive greatness as one of our

values if you're not competitively great

if you're just money driven don't say

you're competitively great but if you

are competitively great but you're like

I haven't honed in on that it's not in

my messaging I haven't even talked about

my companies that could be something

that you're like but that would be a

strategic advantage in accomplishing my

mission and building this company then

it would be your next decision-making

filter or value and so if you think

about it now that you've chosen the

opportunity and you've put the

constraint strategically on what your

mission is the next three constraints

are basically the how the values are

going to dictate how you're going to get

there this is my mission and every

opportunity gets flowed through it do

these align with the mission and then

below it you're all the values there's a

million ways to accomplish your mission

but does the way that I'm being

presented with or that somebody told me

about does it align with the values is

it going down the path that I've

outlined to get to that mission if the

answer is no then it's not for you and

so now what I want you to do is I want

you to take those maybe two

opportunities you have left and I want

you to say do they align with the

mission and values I put here do they

flow through those filters once you've

come up and you've analyzed the business

opportunity you've figured out this is

my mission statement you have the values

that are going to tell you how you're

going to get there here's the last thing

that you're going to do is you're going

to write down say the last two

businesses that are opportunities for

you and what you're going to say is in

the next column you're going to put what

is the worst case scenario if this

business fails I'll give you an example

say you want to start a coffee business

and you're like I want to start a brick

and mortar coffee business but maybe

I'll do it online instead and then

you're like Layla which one should I do

should I start a brick and mortar coffee

store or should I start an online coffee

store I'm going to say this to you

what's the worst case scenario if the

brick and mortar store fails and maybe

you say Layla if the brick and mortar

store fails I've just signed a five-year

lease which I put all of my money into

because the down payment for the lease

was like 50 Grand which is all I have

saved and then now I'm going to owe on

the lease but I'm not gonna have a

coffee store because it failed I'm like

okay well that sucks it's gonna be a lot

of debt what about at the online store

fails I only have to invest a couple

thousand dollars into maybe like a

course on how to build an online store

and then for the inventory for the

coffee worst case I'm probably out like

10 15 grand in my opinion choose the one

that you can live with the downside more

than the other the best CEOs make

decisions based on worst case scenario

which worst case scenario could you live

with so rather than looking at oh my God

I could make a hundred million or a

billion dollars this guy told me on this

ad what is the worst case scenario you

could live with and pick that one that's

it now that you've gone through all the

filters pick the one in which you could

live with the worst case scenario if it

failed and so I can tell you that we

were looking at acquisition.com there's

a million other businesses we could have

started or ways we could have built we

could have built a real estate portfolio

we could have built a d2c business we

could have done all these things at the

end of the day it comes down to what

what is the worst case scenario if it

fails and for us the worst case scenario

of actors.com were to fail we'd lose

very little capital and if anything we

gain a ton of knowledge and insight so

moral of this framework is that you

can't rely on emotions to start a

business people everywhere everyone's

telling you what kind of business to

start they're most likely monetarily

incentivized to tell you to start that

kind of business they're like you have

to start Airbnb it's the best

opportunity no you sell Airbnb as

an opportunity I'm sure it is to you

because you're going to make money from

that guy last thing I'll say is that you

cannot rely on how much money an

opportunity would potentially make you

when you are first starting out you

almost have to ask yourself how much

money will I potentially lose if it

fails and can I live with that so listen

if you've watched this video and you've

determined what you want to do you can

also go to my video zero to one million

and then I'll talk about the process of

going from zero to a million dollars and

what that takes tactically in a business