Would you rather move a heavy object already in motion or one at rest? If you remember high school science, you’d choose the one with existing forward momentum. Starting a business follows the same principle.
It is much harder to get a new idea rolling than to augment a successful one that has tons of energy. This is one reason so many great ideas never see the light of day. Too many individuals believe they need revolutionary ideas to become entrepreneurs.
While having an idea is exciting, it’s not what makes or breaks a startup. Of small businesses started in 2014, only 56 percent survived four years. The success rate plummets to around one-third by 10 years. A paltry 9 percent can expect to exceed US$1 million in revenue in their first 12 months.
Here’s the raw truth: Ideas do not create successful long-term entrepreneurs. Neither does raising investor capital or selling equity. What separates entrepreneurial winners from wannabes is the ability to run businesses. And when those businesses already have credentials? You can take the results straight to the bank.
Forget the groundbreaking solutions. Go for what’s working now.
I understand the excitement that comes from originating an idea. However, after launching multiple startups, I became convinced it was unnecessary to keep building organizations from scratch. Instead, I began to look toward companies for sale. They had existing infrastructure, cash flow, processes, and customers. The hard work was done. All I had to was acquire the business and then put my own spin on it.
To be sure, buying a business sounds less sexy than starting one. That’s a complete charade. Nothing is less attractive than being broke two years from now with a dream and nothing to show for it.
This isn’t to say that you shouldn’t strive to implement your ideas. You just have to find a vehicle that will allow you to explore more efficiently and with less risk. I acquired a decades-old, well-established business-to-business fulfillment and print management company. With the team already in place, we set out to build a centralized e-commerce software platform that would streamline supply chain management across multiple locations. The platform was a goal, and the company allowed me to skip the dicey startup phase.
The most successful entrepreneurs are not just idea-makers; they are CEOs with an accompanying mindset.
Even icons such as Elon Musk, Steve Jobs, and Jeff Bezos couldn’t have survived on ideas alone. Their prosperity came from a focus on making a business work. As Megan Holsinger, a professional who studies what separates CEOs from entrepreneurs, noted in an Inc. article: “What it really comes down to is risk. The style of many CEOs is to be risk-averse, whereas entrepreneurs and founders tend to be more willing to embrace risk.”
Stop beating yourself up because you lack ideas. Instead, apply some acquisition entrepreneurial habits to your quiver.
1. Stay on top of trends.
Typically, the first time you hear about an idea, it’s too early. If the idea hangs around to hit an adolescent phase, it might have staying power. That time period is perfect to ask yourself what industries the trend is not being applied to. From there, you can seek out companies for sale that could make use of the trend.
Howard Schultz did not invent coffee. He just listened to the public’s desire—a trend—for a place to relax while they drank top-notch java. Eventually, he acquired the Starbucks name, based on a coffee shop he had worked for in Seattle. His accomplishments didn’t come from an idea, but from his insightful ability to capitalize on trends.
Not sure how you can learn what’s happening on the street? Make friends with Google Trends. You’ll get to learn in real time what people are talking about and see what’s remained hot for more than a few weeks or months.
2. Go shopping.
After exploring trends, browse companies for sale. Look for ones with growth opportunities inherent in the business model. Ask yourself how you could take the business to the next level, such as doubling revenue in 24 months.
As you brainstorm, you will get accustomed to viewing the for-sale options in a different light. Look beyond today’s infrastructure to determine how you can scale the operations. Yes, it will still be risky, but not because you are starting from square one.
A consideration as you go through this process includes looking for ways to penetrate the market beyond what the owner is doing. Figure out whether the market is right for innovation the company isn’t providing. This could help you diversify your portfolio, which can be chancy but produce big payoffs.
3. Apply your strengths to entrepreneurship.
You must acknowledge your strengths and weaknesses. Being self-aware is the first step in being able to say, “I can see growth potential here, and with my background, I’m certain I can carry it out.”
Gallup’s Entrepreneurial Strengthsfinder pinpoints what you’re really good at based on the talents of 5,000 prolific founders. Your results will reveal where you rate along the top 10 entrepreneurial talents, including creative thinking, independence, promotion, and confidence.
After digesting the results, you will have a better understanding of the team you need to take your newly acquired business to loftier places.
Ideas can be stepping stones, but they do not necessarily make good building blocks. Keep thinking and innovating, but don’t allow yourself to believe that the only path to entrepreneurship involves pushing a boulder uphill. Instead, find a boulder that’s already turning end over end, and jump aboard.