5 Ways To Tell If Your Business Is Real
So I read an article today.
It was called (something like) “The 10 Businesses That Will Work in 2013.”
(It was actually called something different than that, but if I say the title, I’ll get blocked by your email filters.)
There was a list.
It was pretty good.
On the list, in order:
- Organic food
- Bike store
- Senior transportation services
- Hot lunch delivery
- General contracting services for home renovation
- Patient advocacy
- Irrigation systems
- Mobile apps development
- Pet farewell products and services
- Scooter sales and repair
(I was particularly interested in number 4. That one sounded pretty cool.)
The author of the article said, basically, that she picked these ten because they’re the ones with a hope in hell of working in this climate and for a prolonged period of time thereafter.
Here’s something I noticed about the list.
All but one of them – the exception being mobile apps development – has a concrete, decided-upon-in-advance deliverable.
They’re all BUSINESSES.
When the hot lunch delivery CEO-to-be fills out his application for a business license, he knows in advance what his answer will be to the “so what the hell are you in the business of doing?” question.
Many of our “friends” on Facebook cannot say the same, and it is my contention that therein lies their problem.
Here were a few things that I notice did NOT make the list:
Be a really friendly “connector” and “thought leader” and “build a tribe” and “get 1000 true fans” and then “leverage” that to sell them some as-yet-undefined “premium content”.
Create a thriving community of like-minded world changers.
Build a list of a few thousand people you got through Facebook bribes and then MacGyver the Amazon algorithms with unedited collections of blog posts in the hopes of making six figures on “books”.
It is possible that the reason most of our “friends’” businesses are failing is because they are not, in fact, businesses.
They are actually “taking an activity you enjoy and trying to leverage it into a personal salary” ventures.
And there’s nothing wrong with that – but it’s different from a business.
Here are a few quick ways to determine if you run a business or not:
1. Could you theoretically be eligible for a small business loan?
Small business loans require (among other things) buyer demographics, deliverables, and costs.
If you couldn’t even complete an application, let alone get the loan, you probably don’t have a business.
Banks, governments and venture capitalists like to see – specifically – what you plan to sell, for how much, and to whom.
If you can’t provide that information, either because you don’t know or you haven’t figured it out in detail yet, you probably don’t have a business.
2. What is the ratio of commercial to non-commercial emails in your primary business inbox?
The hot lunch guy doesn’t have many people writing to tell them how much they loved his content.
He doesn’t have many notifications of how many people retweeted him.
He doesn’t get many guest post pitches from people with whom he has no commercial relationship.
If 80% of your email doesn’t come from customers, clients, service providers or suppliers, you probably don’t have a business.
3. How many non-buyers have the guts to get in touch with you?
Nobody calls a pet farewell company if they don’t have a dead pet.
Nobody writes to a bike shop if they don’t have or need a bike.
Hell, (almost) nobody emails JK Rowling to tell her “how much they enjoyed the free sample on Amazon.”
Businesses do not get many emails that start with:
“I haven’t bought any of your products (yet!!!) but I just wanted to say…”
If a lot of people tend to think it’s a good idea to contact you without buying something from you first – or they’re not asking a product or service specific question – you probably don’t have a business.
Maybe you’re an author or a content creator, but you don’t have a business.
4. How much money are you spending on it?
Here’s a ballpark…
If you’re spending less than $20,000 a year on hard costs – employees, advertising, lease, phone lines, whatever – you probably don’t have a business.
That’s a very low number, and I’m only referring to hard costs of doing business.
Not personal expenses for membership programs, or trips to Mexico with gurus.
Skills training I’ll allow, but “Get Paid To Be You!” I will not.
Yes, there are exceptions to the $20,000 guideline.
“But I can’t afford that!”
That may be.
And that’s fine.
There is nothing wrong with taking an activity you enjoy and trying to leverage it into a personal salary.
That’s a wonderful thing.
It’s just not a business.
5. Could you theoretically sell it?
Maybe you wouldn’t get much money.
Maybe you wouldn’t want to.
Maybe getting the paperwork organized would be a tsu-tornado-cane.
But COULD you sell it?
If not – if your name and face are splashed around everywhere, and it’s all about your “voice”, and you couldn’t provide revenue predictions – well, you probably don’t have a business.
“Oh, God! It looks like I don’t have a business!”
Please, please, please understand – if you do not have a business, that is okay.
Plenty of people don’t have businesses.
My mom doesn’t have a business, and she’s a very nice lady.
My lawyer clocks in at his day job at 9am and doesn’t have a business, and he’s a very nice man.
There’s nothing wrong with not having a business.
But if you’re wondering why your “business” is failing, it could be that you don’t have a business at all.
If you don’t have a business, you can get one.
If you don’t have twenty grand a year to throw at advertising and fax machines, you can get there.
But only if you decide to create something that could pass all five of those questions.