How to Start A Business

I was asked this question today and this was my answer:

I run a chartered accountant firm and I see a lot of different types of people and different types of business models. I can tell you as a fact that if you are creating a business around selling a product or service that the consumer can get somewhere else, you are doomed to under-achieve and probably fail. Consumers are too savvy these days and can check prices with your competitors too easily. A discounting spiral begins and doesn’t stop until most of the players close down.

The big caveat here is that you will get away with selling an identical product to someone else if you have other features that attract people, such as convenience or customer service, but even then, they need to be absolutely fantastic to make any real difference.

So the big question is what can you do really well and easily that others can’t or won’t do for whatever reason. If the customer values that thing then you have a business model that could work. Unfortunately I see a lot of startup businesses with a ‘me too’ attitude that are doomed to fail. Restaurants are a good example of this. I often hear something like ‘I love food and there are lots restaurants in my area so they must all be making money’.

Be bold, be different, don’t listen to negative people, do your research, get outside your comfort zone and give the market what they’re missing.