Thread: violating commandment of entry?

I'm debating on two different businesses and as I was going through the five commandments. I saw that one has about 15-20 competitors. So I was wondering...when are you violating commandment of entry. I know in the book it talks about MLM's and e-bay businesses, mainly stuff with very VERY easy start-up but when are too many competitors consider violating.

Depends on the size of the market and the opportunities (weaknesses) presented by the existing companies. A 1% market share on a $5B industry is $50M.

So look at the industry itself to determine if it's violating, not unless there's a ton of businesses in it already. As well as evaluating the weaknesses of the companies already in the field.

When doing your initial market research take a look at some of these factors for each business: (you could even give each business points based on what you find and use the weighted decision matrix to decide on the better opportunity for you)

How many customers in your pool? Do some research to find out the general size of the market reach.

What would it take to start up the same business? Is there a process involved in starting it up? How hard is that process?

Who are your major competitors? What would you do different than them? What is your USP?

One note: If your pool of customers is big enough, you can make money in any niche with any amount of competition even without having a USP. You can be exactly the same and still make money especially if you are better at marketing. However, if you build a business based on the 5 commandments you will set yourself up for stronger and faster growth and most likely build more asset value to be sold later.

^^ thanks for the help. Pardon my ignorance...what is USP? I'm still new to entrepreneurship so still a quite a few things I don't know.

Unique Selling proposition