How to Know What Passions to Pursue in Business
We all have that question where we ask ourselves: “I have a passion for a lot of things. How do I know which one I should really choose?
Well, we all have heard many times in our lives, if you want to make a living, do something that you love to do. But our biggest concern is: how do we know if your passions can become a successful business? Fortunately, according to entrepreneur.com. there is a formula for determining if an idea is a viable opportunity.
It is a two-step process.
First: You look at the idea itself and see if it meets the criteria for success.
Second: You examine the industry to see if it is an attractive field for launching a new business.
If you launch a true opportunity in an attractive industry, your chances of turning a passion into a viable business go up dramatically.
THE FIRST STEP
Most of us have several things that we are passionate about. The trick is to pursue the one that has the strongest probability for success. Start by evaluating each of your passions against the criteria for a true business opportunity. Here are the critical components:
- Need – You have to obtain first hand evidence that people really need your product or service.
- Experience – You need to understand the industry from working in it or from regularly using the products.
- Resources – Cobble together the resources to create an initial prototype of your product or service.
- Customers – You have to find customers how are ready to buy your product as soon as you launch venture.
- Model – You need a sound business model where pricing, costs and margins allow you to make a profit.
Let’s take one example: Marshall Miller is a great example of turning a passion into a true business opportunity. He had a corporate job for eight years that he didn’t like. On weekends to maintain his sanity, he would take to the skies parachuting, paragliding, and base jumping. He and his friends started talking about how they might make a living doing this. They approached GoPro about filming their feats and making the footage available to the company – this was the birth of the GoPro Bomb Squad. Marshall now has a number of companies that sponsor his jumps. He displays their logos on his helmets and parachutes, and provides incredible footage they use in commercials and custom videos. Marshall has been doing this full-time for nearly 10 years and is one of the top human flyers in the world.
THE SECOND STEP
The second step for turning a passion into a business is to launch in an attractive industry. Research suggests that about 30 percent of success in business is a result of the industry you enter. Some are more attractive than others. Here are some tips:
- Size - You want an industry with at least 50 million in sales, but not more than a billion, that means there would be too much competition.
- Growth – You want an annual growth rate of 10 percent or more which means the industry is not shrinking.
- Margins – You want gross margins on products of 40 percent to 50 percent and profit margins of 10 to 20 percent which means it is possible to make money.
- Competitors – You want a handful of competitors but not hundreds which indicates that the market is overly saturated.
- Customers – You want multiple market niches for your product or service as opposed to a single group of buyers.
In sum, list the things you are passionate about and see which ones can become true business opportunities. Then evaluate each industry to see which ones have the highest probability for success. When you launch a true business opportunity in an attractive industry, you can create the company of your dreams.
***ARTICLE BASED ON ENTREPRENUER.COM***
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