There are 22.9 Million Small Businesses in the United States, each with an entrepreneur behind it. The lucky folks who possess that entrepreneurial spirit can very well make it big - regardless of their background, education, or a downturned economy. It’s the innovation our country was founded on and part of what makes America great. But let’s not schedule the Hawaiian vacations just yet…
In 2009, a small business went bankrupt every 8 minutes. Sheesh.
Defying those odds, Michelle MacDonald founded Sweet Note Bagels in 2012 to give bagel enthusiasts a gluten-free option. She has been passionate about baking her whole life, but has family members with gluten restrictions. Because this is a problem for a lot of individuals, she knew she could corner the market. In order to do that, she invested all of her savings ($15,000) and maxed out every credit card she had. Almost two years later, they are a $250,000 business and rapidly growing.
Zeeshan Kaba, a successful real estate business owner, was outside one morning when his allergies flared up. It popped into his mind that there were only lozenges for colds and coughs – not for allergies. So he called his cousin, Dr. Omar Javery. Together, the two of them created AllergEase, a tasty, all-natural lozenge that speedily relieves the symptoms of allergies. Taking the plunge, he hired people to run his real estate business and went into this new industry full time. A year later, they had a product. A year after that, they had national distribution with major retailers.
David Daneshgar, Farbod Shoraka, and Gregg Weisstein wanted to open an online flower marketplace, but didn’t have enough money for initial funding. Interestingly enough, Daneshgar was also a professional poker player. The three co-founders decided to take a very literal risk and bet their personal funds - having David enter a huge poker tournament. Luckily, they won $25,000 and were able to start their company, BloomNation.com.
Risks like these could give ulcers to the best of us. The loss could be great, but the payoff could be life-changing. How do you know? What should you take into account?
Changing the World for the Better
Michelle suggests asking yourself, “Am I solving a problem with my product or service?”
The strong need for what you’re proposing to offer is the best place to start for any business. In her case, there weren’t a lot of gluten-free options for her family. It was a problem that she accommodated and succeeded. What problems would your new business solve?
Raising the Stakes
“What is the growth potential for the new venture compared to what you’re doing now?” asks Zeeshan. “Does the new project have the ability to grow faster and higher than the project you are currently involved in?”
The example here would be exchanging a real estate business in a local market for a natural supplement business in a national market. Obviously, the latter has a much broader audience.
“Make calculated bets that you are willing to accept the risk for and always try to keep emotion out of it,” says the Farbod. “Stripping away the bells and whistles, does the core of your idea solve a real pain point for people or businesses?”
Farbod and his co-founders did their research. They found that people hated sending flowers through brokers and that florists hated working with those same brokers because it stifled their creativity. Because of their research and logic, “The Bloom Boyz” knew that technology was not solving the problem and that their revolutionized marketplace would.
As enticing as it is to build your own company and be more in control of your future, you have to factor this risk. To do this, ask yourself a lot of questions. If the answers are 90% positive, then you just might be onto something great.
Molly Reynolds is currently the Director of Business Development for LUCID Public Relations. She has over ten years of experience as a Chief Marketing Officer with a strong emphasis in publicity and B2B networking for start-ups.