What Business to Start in 2023
Summary
TLDRThis 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
🧭 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.
📊 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.
✅ 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.
Mindmap
Keywords
💡Opportunities
💡Strategy
💡Decision filters
💡Market opportunity
💡Margins
💡Strengths and weaknesses
💡Mission statement
💡Core values
💡Worst-case scenario
💡Emotional decision-making
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
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