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Sacrilege! Blasphemy! Desecration! How can a guy who claims to talk about business say it’s not about the money? It’s all about the money, isn’t it? Nope! It’s about passion.
When trying to determine what business you should go into your passion for the business is more important than the money that business could make. Why? Because without passion you will lack the key ingredient that makes people and businesses succeed.
That’s why your hobby is such a great place to begin. You already have a passion for it. It’s what you love to do, and it’s exactly that love of what you do that will help you succeed.
The reality is 90% of all new businesses fail within the first year. But did you know statistically that 90% of those that survive the first year are gone within 5 years? That’s right. So if 100 businesses are started this year, 90 of them will be gone the next, and 9 of the 10 that were left after the first year will be gone in 5 years.
That means that only 1% of new businesses actually survive. Why is this? Well, we could talk about under-capitalization, changing market dynamics, the cyclical nature of economics, and inferior education regarding one’s business, but it’s the lack of passion that leads to many of these items, and kills most small businesses.
Allow me to clarify. If I’m truly passionate about my business – I truly love it – I will make absolutely certain that I have done every thing I can do to give it the greatest chance of survival. Just as with my child, if I really love him, I’m going to give him the best opportunities and education I possibly can.
Part of that desire to give my business the best chance of survival will lead me to make certain that I’ve done my homework. I should understand my business inside and out. I’m not saying that you should get caught up in analysis paralysis. I’m saying that you will read everything you can get your hands on about the particular business you want to go into. And the knowledge and understanding you gain will give your business a greater chance of longevity.
Another part of that desire to give my business the ability to survive is having the forethought and patience to wait until I have enough capital to properly fund it.
The truth is that many entrepreneurs simply lack the patience to delay the gratification of owning their own business until that business has the best possible chance of succeeding.
The reason this is important is simple. If you lack the discipline to properly capitalize you business, then you are more likely to also lack the discipline to properly mange the finances of that business, which ultimately lead to it’s demise.
Your passion will also lead you to understand that market dynamics and changes in the economy are also issues you will face with your business. If it’s your passion that’s moving you, and not the money, then you will naturally want to plan for these occassional fluctuations over which have may have little control.
What do I mean by this? I mean that if you are truly passionate about your business you will understand that markets and economies do change and you will develop a plan to set aside enough capital to ride out these fluctuations.
Money alone is not enough. Passion is the key. Without passion, without a deep, obsessive infatuation for your business, the odds are stacked heavily against it’s survival.
Next time, I’ll talk about how to find that passion.