About the Wiser Next Week Series: These entries will involve posting my book, Wiser Next Week, chapter by chapter, freely available to the public. Additionally, I’ll be recounting a story about something I’ve learned based on the chapter’s topic since the months that have past when the book was published in December 2018.
A Poorly Thought Out Business Plan
When I was just about to graduate college, I had the idea of starting an ecommerce store. I was going to sell men’s clothing. Not just any men’s clothing though, I was going to have a custom shirt design.
I noticed that in men’s dress shirts, between the buttons in the placket sometimes you can see past it. So I created a custom shirt design that had a hidden zipper in the placket.
I had everything set up:
- I had a up and running Shopify website
- A supplentary blog about menswear to establish myself as an authority (here is one such article)
- A photographer to help me take nice pictures as the product images (I was the model)
- A contact in China that would help me in the production of the shirts.
- A lot of free time on my hands to make it happen
The one thing that was missing was demand. I ran a couple hundred dollars worth of Google Ads to drive traffic to the sales page. Product wasn’t ready to be sold yet, so I put up an email signup option on the sales page.
Out of the few hundred dollars worth of ads, I got 1 email signup. It was at that point that all the facts pointed to there being no demand. And I decided to move on to something else.
The 5 Principles of Entrepreneurship
- Need: People want what you offer (No one wanted the shirts I was making)
- Entry: Not everyone can start your kind of business (It doesn’t take a rocket scientist to open a Shopify store)
- Control: You control the unit price and sales volume mechanisms that directly affect your income (This was completely up to me)
- Scale: You can reach an increasingly large customer base (The internet reaches billions of people so this base is covered)
- Time: Your physical presence is not needed after everything is set up (Besides some basic maintenance this is mostly true.)
Striking out on 2 of these 5 principles lent to my business idea being a non viable option. Eventually I shutdown the website with its corresponding pieces. In hindsight it would have been a lot more time efficient if I had assessed an actual demand for what I was building instead of plowing away at it without considering if anyone wanted it first.
Especially as you get deeper and deeper into a topic you become more invested in its success even when it’s not feasible, which is sunk cost fallacy.
So with any business idea use premortem (the assessment of possible failures) through the lens of these 5 principles to save yourself time.
Here is the “On Entrepreneurship” chapter of Wiser Next Week. Take it and implement it into your own life.