THE FOUNDATION OF YOUR BUSINESS: SIX STRATEGIC CHOICES YOU HAVE TO MAKE AT THE VERY BEGINNING

Not all businesses are created equal. Some require a great deal of capital investment. Most manufacturing businesses, for example, require millions of dollars just to get started. Others, such as developing a successful social web site or board game, require more than money and time. They require a certain amount of luck. It’s like becoming a pop singer or actor. You can have a great product (or skill) but your marketplace is simply too competitive.

So how do you decide on which business to get into?

Pick an Industry You Know

There’s no better foundation than building on what you know. You might be drawn to the rush of something new and exciting, but your chances of success decrease with every step you take away from what you’re familiar with.

Say you have a successful neighborhood restaurant called The Steak House. Your basic business is selling a certain kind of eating experience to the community. Over a few drinks with friends, you come up with two new business ideas:

1. The first is to open a local restaurant called The Fish House.
2. The second is to go into the wholesale steak-selling business.

Both of these businesses have several elements that relate to what you are already doing. The Fish House is almost identical except for one difference—you will be selling fish, not steak. All other key aspects—how you attract new customers, how you create a profit margin, and how you control ...

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