How to know if you should turn your passion into a business
Decades ago, the formula for our career paths was simple. You would pick your career, work for a company or two, retire at 65, collect your pension, and enjoy your last few decades. Today, we live in a fundamentally more flexible era--and we live at a time when entrepreneurship reigns.
But a new business must come out of a true passion. You're going to put your blood, sweat, and tears in, and you need to be 100 percent positive it's something you love. In other words, don't start a cupcake shop just because it seems like the hip thing to do.
How do you know when your life's passion is worth pursuing professionally? Here are a few tips I've picked up along my own journey as an entrepreneur--and from talking to some of the best founders on my podcast, Inc. Founders Project.
1. Dig Deep
Start by confirming that your passion is just that--something you love, something that inspires you, something you'll be happy to think about 24/7.
While many people look around to see what others are doing to gain inspiration for their business, I recommend doing the opposite. Think about how you spend your time currently. What minutes of your days make you happiest? Look internally to find the motivation behind your business.
Do you have a passion that has sparked joy your whole life? Maybe it's a childhood hobby you just can't shake (like Brynn Putnam, CEO of fitness tech company MIRROR, who loved dancing since she was three). Or maybe it's something you love but don't consider yourself an expert in (like Danny Meyer, the famed restaurateur, who was poised to go to law school before his uncle pointed out that maybe he should do more with his obsession with food).
2. Write a Business Plan
Let's say you've zeroed in on what your passion is. But how do you know if there's any business potential?
I knew I had a deep-seated passion for personal finance that dated back to my childhood. When my dad passed away suddenly, I watched my mom grapple with our household finances and realized how important financial empowerment is to families across the country.
With just the spark of an idea, I took the time to sit down and write a 75-page business plan. The exercise was incredibly daunting, but it did two things: first, in confirmed that I wanted to spend significant time on my passion. It was a self-motivated project. And second, it proved to myself and to others that my idea was worth pursuing. I wrote my way into a strategy for what would become LearnVest and built a roadmap that lead me to my first investors and gave my business a solid foundation.
This is more than a writing exercise. It's the time to understand whether your business idea is viable. To get started, you must:
Research the market. Is there a big opportunity here? Are consumers or businesses spending money in this arena? This involves consuming everything you can get your hands on (articles, podcasts, books). Then, start with a simple Google search to find key numbers. You'd be surprised how many industry reports (from reputable analyst firms) are available to peruse.
Look for competitors. Who is already doing this, and are they succeeding? What could you do better? What will your secret sauce be?
Propose a business model. How will you stand up your idea into something that can succeed? It's time to crunch the numbers and formulate some potential strategies. This process will vary dramatically based on your business idea. For an example, let's say you want to build a company around a retail product. You'll need to think about everything from production and shipping, to whether you'd like to sell director-to-consumer, wholesale, or via your own brick and mortar location. This is an important area to utilize your resources, so speak with others in the space to get the download on their business model.
Even if this is an idea you can fund yourself, go through the rigor of putting together a business plan that you would be proud to show a potential investor.
3. Seek External Advice
Now is the time to get vulnerable. Many of us have friends and family cheering us on from the sidelines. They know how much your business idea means to you, and they know your ability to execute. But before you take the leap, it's time to put your business plan through the smell test.
Go beyond your inner circle to find smart people you trust. Walk them through your plan and get their feedback, positive and negative. The more difficult questions, the better. This critical feedback will help you create V2 of your business plan and debut stronger than ever.
How do you find those trusted people? Reach out to your network. Ask your inner circle for introductions to someone you don't know whose council they find insightful. From your competitive research, identify some industry leaders who might be willing to give advice to a budding entrepreneur. And whenever you set up a conversation, ask that person for two more names.
After this period of reflection, deep strategy, and smart advice, you'll be ready to know whether it's time to shift gears--or go all in. If after all of your research you realize that 1) blending work with your passion doesn't make you as happy as you thought or 2) that the market and business opportunity is simply too risky, it's most likely time to shift gears. Don't be afraid to take a step back, reflect on what you've learned, process the smart advice you sought out, and make the right call for you.
So, what's your passion?