Entrepreneurs are gifted with the unique ability to discover, create and attract many lucrative opportunities. Because of this they are positioned to create substantial long-term wealth for themselves and the organizations they represent.
But what can an entrepreneur do to manage the hundreds, even thousands of opportunities that will ultimately come their way?
They can work all of them – Though this is an option, the challenge with this path is that entrepreneurs, like the rest of us, are limited in their time, effort, resources and money. And by dedicating equal time to 15 different business ventures, it would ultimately violate the cardinal rule of business success, which is:
“Focus is the ultimate key to business success.”
In order for a business to succeed it needs an overwhelming amount of focus, passion, and determination. It also requires a substantial amount of activity to manage the hundreds and thousands of tasks that need to be accomplished. Also if you also consider the expense in terms of marketing, overhead, payroll, insurance, and such, all of these combined needs, makes it very difficult for an entrepreneur to succeed if their attention is divided.
Though this is an option (the one that most entrepreneurs follow), it is a recipe for failure, because no one business will get enough of the business owners attention and resources to become viable. They will fail by trying to be a “jack of all trades, and master at none.”
They can work on one only and forsake the rest – Again, this is an option, but it also comes with its challenges. For instance, who is to know if the current business you are managing will be successful? And if you have all your eggs in one basket, if the business fails – what will you have left to support you, your family, as well as help you start your next venture?
This option also fails because, it could be possible that a better business opportunity may come along that provides a substantial greater return for less time, effort, resources and money. Last, another cardinal rule of business success would be broken by only focusing on one business at a time, which is:
“Long term business success is determined by a combination of multiple streams of independent sources of income.”
Because there are forces beyond your control, (i. e.: the market, the economy, etc. ) it is wisest to have multiple business that are independent of each other to weather these challenges as they arise. Even better if each of those businesses respond opposite to one another in response to external circumstances.
I think a more strategic approach will create a situation where you get the best of both worlds, while minimizing the challenges of both.
I call it, the 80/20 Entrepreneur.
The idea goes like this:
1. 80% of your time, effort, resources and money (TERM), goes to your most lucrative business opportunity, determined by specific criteria. The criteria for choosing the 80% business could be a combination of any or all of the following:
a. The business that is generating the most revenue and income.
b. The business that you can confidently deliver results to your customers.
c. The business that you have the most expertise in.
d. The business with the most leveraged results (revenue/income to TERM).
e. The business that is most proven to generate sales in the marketplace.
2. 20% of your time is dedicated to progressing with other lucrative ideas.
Now these 20% must be approached in a passive and inexpensive manner.
This is because the first question that needs to be answered before any business venture is responsibly considered is:
“Is there a market for my product or service?”
In other words, new ideas have 3 very big hurdles that must be overcome before you can even determine if they are viable.
1. You have to prove that there is a market for the product/service. Generally this is done after the 5th sale.
2. You have to prove that you can identify the optimal marketing and sales strategy (OMSS) for this market. OMSS – The right combination of marketing and sales efforts that brings in loads of qualified customers, at your best price point.
3. You have to prove that the business is scalable. This is proven by the capability of achieving a critical mass of qualified customers that can be leveraged to bring more.
The reason you want to operate passively and inexpensively is that you are not sure if the business will be successful, especially because 90% of business ideas aren’t, especially if they are untested. Any overconfidence in a “sure thing” is purely speculative, and full of unnecessary risk.
Since your time is valuable, identifying passive ways to progress with these business ventures will be your best option. Passive efforts can include:
1. Taking in a partner to do half or most of the work.
2. Automating it with technology – For example, since market research is the first stage of every business venture, the market research can be automated through a website that sells your product and service (a product or service you have not created as yet, mind you), just to determine interest of the market.
3. Hiring a market research team to do the research and deliver you the results.
Since your resources and money are valuable, identifying inexpensive ways to test the business venture will also be your best option. Inexpensive efforts can include the ideas above, as well as:
1. Marketing your new product or service to your current customers as test research subjects.
2. Again, using technology to test market with using a simple website, some SEO, and great copy just to generate interest.
3. Using technology to capture the contact information of an interested list of prospects that you can later market to through email marketing or social media marketing.
Utilizing the 80/20 model of entrepreneurship, you are able to focus the vast majority of your limited time, effort, resources and money on your most lucrative projects, and deliver high level, short term results; while testing new and potentially viable ideas in the marketplace.
In the 80/20 entrepreneurship model, the goal will be to go through as many business ideas as possible until you discover the goldmine opportunities among them. At the same time you will still be generating income from multiple businesses that can be later expanded or sold to generate even more capital that leads to even more business opportunities.