How Will I Know if my Idea will be Profitable?
It is a great question, and one that many people starting companies forget to ask. After all, it doesnâ€™t do you any good to sell a lot of units, or provide a wonderful service, if you lose money every time you do. That approach is, as they say, â€œnot a sustainable business model.â€
Having asked the question, the short answer is this: You canâ€™t know with absolute certainty, before you begin.
The longer answer is while there is no guarantee, you certainly can take two steps to minimize your risks.
How?Â By acting as the most successful entrepreneurs do.
If all you did was read the popular press, you would think that serial entrepreneurs, that is those people who have started two or more successful companies, love risk.Â They swing for the fences at all times.
Nothing can be further from the truth. They are extremely risk adverse.
So, to make sure they donâ€™t over-extend themselves, invariably:
1. They take small steps in the direction they want to go. They donâ€™t make huge leaps.Â (And after they take that small step, they always pause to review what they have learned to make sure the next small step they take is a smart one.
2. They always bring along like-minded potential partners. Not only does this allow them to move faster, it spreads the risk.
Neither of these moves, of course, guarantees success. (Nothing can.) But should things not go as planned, you have minimized your risk which will allow you to try again.
This guest post was written by Len Schlesinger is President of Babson College, and formerly served as Chief Operating Officer for Limited Brands. With his new book, Action Trumps Everything, you can learn more about how to act like an entrepreneur, as well as how to use a new entrepreneurial formula called CreAction to work for your goals. Please visit www.actiontrumpseverything.com for a free copy of the book.
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