The most important business pivot is done before starting.

[MJ DeMarco]

My stepson was a Generation Z young adult with no interest in business or entrepreneurship. I've tried to get him interested in owning his business and controlling his destiny for years.

No luck.

Everything changed after he graduated from college and got a full-time job.

Early morning wake-ups, traffic, low pay, corporate politics, passive-aggressive bosses, and boom! Suddenly, he wants to start a business.

As I like to say, words rarely can wake people up. Warning people about the fire doesn't work; they need to stick their hand into it and get burnt.

In any event, when my stepson finally came to me for some feedback on a business idea, I showed him the following graphic:




My stepson's first business idea was related to agriculture—terribly hard to scale with equally difficult customer acquisition hurdles. His best-case scenario is a middle-class salary.

The best business to start (above) is Idea #1 and #4. The low rewards of the other ideas are not worth your effort.

You see, no matter what business you decide to launch, you will struggle and grind. The question is, will that work and grind change your life or pay your bills?

I mentioned this last year in an earlier newsletter in a parable of a mountain hike. You cannot avoid the treacherous hike up the mountain, but you can ensure your effort is handsomely rewarded.

People are running small corner cafes who work as hard as I but earn 100X less. Effort is not an issue; the answer lies in the graphic above.


Think that guru with a $3,000 course to sell you has the answer?

Wrong.

Here's what you don't see.




If you need a billionaire to convince you, Stephen Schwarzman, the CEO of Blackstone Group, which is a global private equity firm, said it best:

"I had reached an important conclusion about starting any business; it's as hard to start and run a small business as it is a big one. You will suffer the same toll financially and psychologically as you bludgeon it into existence... so if you're going to dedicate your life to business, which is the only way it will work, you should choose one with the potential to be huge."

If you play the big-boy/big-girl game of business, be in the business of big rewards. Or work for the rest of your life, an outcome no better than a job.

~ MJ

 

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[HabitsCampaigner]

My stepson was a Generation Z young adult with no interest in business or entrepreneurship. I've tried to get him interested in owning his business and controlling his destiny for years.

No luck.

Everything changed after he graduated from college and got a full-time job.

Early morning wake-ups, traffic, low pay, corporate politics, passive-aggressive bosses, and boom! Suddenly, he wants to start a business.

As I like to say, words rarely can wake people up. Warning people about the fire doesn't work; they need to stick their hand into it and get burnt.

In any event, when my stepson finally came to me for some feedback on a business idea, I showed him the following graphic:

View attachment 53487


My stepson's first business idea was related to agriculture—terribly hard to scale with equally difficult customer acquisition hurdles. His best-case scenario is a middle-class salary.

The best business to start (above) is Idea #1 and #4. The low rewards of the other ideas are not worth your effort.

You see, no matter what business you decide to launch, you will struggle and grind. The question is, will that work and grind change your life or pay your bills?

I mentioned this last year in an earlier newsletter in a parable of a mountain hike. You cannot avoid the treacherous hike up the mountain, but you can ensure your effort is handsomely rewarded.

People are running small corner cafes who work as hard as I but earn 100X less. Effort is not an issue; the answer lies in the graphic above.


Think that guru with a $3,000 course to sell you has the answer?

Wrong.

Here's what you don't see.

View attachment 53488
View attachment 53489

If you need a billionaire to convince you, Stephen Schwarzman, the CEO of Blackstone Group, which is a global private equity firm, said it best:

"I had reached an important conclusion about starting any business; it's as hard to start and run a small business as it is a big one. You will suffer the same toll financially and psychologically as you bludgeon it into existence... so if you're going to dedicate your life to business, which is the only way it will work, you should choose one with the potential to be huge."

If you play the big-boy/big-girl game of business, be in the business of big rewards. Or work for the rest of your life, an outcome no better than a job.

~ MJ

In the past, I overcame this ‘hard work’ issue by doing what I loved. I figured that the only way I would have the ‘juice’ to get the hard done was to make sure I had some passion about it.

This worked until it did not work.

I believe a key issue was not intelligently looking for the idea with the huge (potentially even infinite) upside.

Thank you

 

[freek]

My stepson was a Generation Z young adult with no interest in business or entrepreneurship. I've tried to get him interested in owning his business and controlling his destiny for years.

Imagine having MJ as your stepdad and mentor when you are just starting out haha, that would be great.

 

[MJ DeMarco]

Someone asked me how to determine how big a potential reward is in business?

Answer this (again) by visualizing.

If you made $10K profit in one day, what would your OPERATION need to look like? Would you need 100 employees or 3? Would you need 10 locations or 1? What does this day specifically look like?

Is that even possible?

Imagine having MJ as your stepdad and mentor when you are just starting out haha, that would be great.

LOL, he tunes me out for the most part. It's a true parent/child relationship.

 

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[DCBrooks]

This is all too true in hits very hard it's tough when you've invested 12 years into a small business and you realize a lot of what this article is saying.

Currently working on a fast track to get everything systemized in my current small business to make it sellable over the next two years so for that very reason, to use the income to pursue ways to serve the many instead of just one market area.

Thanks to all on the forum, have been taking it all in like a sponge it's a privilege to gleem from and grow with such a large group of so many different backgrounds in business that have already paved the way. Special thanks to MJ for being commited to the cause.

 

[Cris Bar]

Someone asked me how to determine how big a potential reward is in business?

Answer this (again) by visualizing.

If you made $10K profit in one day, what would your OPERATION need to look like? Would you need 100 employees or 3? Would you need 10 locations or 1? What does this day specifically look like?

Is that even possible?

This hit me in the face hard! I thought about this and my answer would be 72 at this moment (awful).

@MJ DeMarco what should be the right Employee - Revenue ratio?

 

[DCBrooks]

This hit me in the face hard! I thought about this and my answer would be 72 at this moment (awful).

@MJ DeMarco what should be the right Employee - Revenue ratio?

Thats a good questions, I am sure it varies heavily for different sectors

 

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[Cris Bar]

Thats a good questions, I am sure it varies heavily for different sectors

Yes, you are right, but I am having in consideration as a general rule for a Fastlane business (&CENTS framework).

 

[biophase]

@MJ DeMarco what should be the right Employee - Revenue ratio?

Theree is no right ratio, but it should be something manageable. I’d never done this calc until now but my estimate is that I’m running $500-$800/day/employee. Feels ok to me, I have no idea.

But if I scale that to $10k a day, it wouldn’t be a linear scale. My guess is that I would need to add 3-4 people more.

 

[DCBrooks]

Theree is no right ratio, but it should be something manageable. I’d never done this calc until now but my estimate is that I’m running $500-$800/day/employee. Feels ok to me, I have no idea.

But if I scale that to $10k a day, it wouldn’t be a linear scale. My guess is that I would need to add 3-4 people more.

Nice, On the trades end usually in contract work I would say 200-500 Pd per emp after overhead is taken out, could be higher could be lower just depends on alot of variables

 

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[Cris Bar]

Theree is no right ratio, but it should be something manageable. I’d never done this calc until now but my estimate is that I’m running $500-$800/day/employee. Feels ok to me.

Well, if we take in account @MJ DeMarco 's example, for a business of 300.000$ and 3 employees (best case), that would mean around 5.000/employee/day.