To live an untemplate lifestyle, most of us will need to build an untemplate businesses. And while I don’t believe in get-rich-quick schemes, I do believe there is a formula that greatly increases your chances of success.
Through my background as a CPA and consultant, I’ve seen the insides of dozens of businesses. I’ve seen businesses that receive a fortune in revenues, but generate very little for their owners. I’ve seen business with relatively modest top-lines revenues that are much more profitable. And I’ve seen owners that are able to enjoy their lives and owners that view their businesses as a ball and chain. Over time, I developed my own philosophy for the types of businesses I was interested in and have tested and refined my theories in my own endeavors.
Today, I own interests in 8 different ventures – in a variety of industries and at different levels of maturity. Some of my businesses are well on their way to supporting my Untemplater lifestyle, while others will take much longer and much more work to get there. For many of you, focusing your efforts on one business will be preferred. For the serial entrepreneurs among us (myself included), you’ll now have a framework to use to evaluate each business opportunity that comes your way.
I’ve always been a puzzle person, so I created an anagram to help you remember the framework. The first four letters are key factors in the beginning. They’ll help you evaluate and select the industry and type of business you should create. The next four are areas of emphasis when designing your operations. And the last three represent long-term focus areas that you may not be able to achieve right away, but should always keep in the back of your mind.
Here’s a brief introduction to each of the key considerations in the framework, and I’ll explain why each is important in the next post.
Unique – Successful businesses always have a Unique Selling Proposition. Keep refining your idea until it does.
Niche – Start with a niche and plan on expansion. You can’t be all things to all people, especially in the beginning.
Testing – It is essential to test your concepts early and often. Be careful not to proceed too far in your planning without this step.
Enthusiasm – Passion is important. Reconsider proceeding with an idea you can’t get excited about.
Multiple streams – Does your business lend itself to multiple streams of income? Keep brainstorming until you can identify 3 to 5 different sources of revenues.
Products – Does your business sell products or services? If it’s service-based, how can you eventually convert them into products? Products are almost always essential to achieving an Untemplater-type of success.
Leverage – Successful businesses leverage time and money. Brainstorm how you can use less money and/or time.
Automation – You’ll want to avoid being buried with low volume tasks. Invest the time and energy to design automated processes that complete them for you.
Time – All the money in the world is worthless without the time to enjoy it. Make plans now on how you will eventually trade your money for your time.
Employees/team – The legendary loner is a myth. Successful businesses are built on teams. Make plans now for who should be on yours.
Residual income – You will eventually want to get off the treadmill (if you don’t already). Design your business from day one with that concept in mind so that it can be profitable without you someday.
Fair enough. No point in arguing semantics but I disagree that unique is a synomyn for different and I think that it’s a mistake for a business to use uniqueness as a goal. But I understand the point that you and Edward are making.
I only sporadically check in at Untemplater but I’ll look for your post.
@Deadhedge When I first read your comment, I thought I must have worded my original post poorly and went back to reread it. I’d have to argue that Unique Selling Proposition is a fairly standard term used to refer to any aspect of a product/service that makes it different from other similar products/services. (http://en.wikipedia.org/wiki/Unique_selling_proposition) As you pointed out, cheaper or better are two of the options available when choosing a USP. (But there are also other options as Edward indicated above.)
The notion of “forcing” sub-topics to fit a framework is a fair criticism, but this sure wasn’t one of the letters that I had to brainstorm for very long on. My next blog post has been queued up and addresses the first four planning and selection criteria, including “unique.” I’d be interested to hear your comments after it posts.
I completely disagree with your “U” of unique selling proposition. Claiming your value proposition is unique is like claiming your product/service has no competitors. Everyone has the competitor of a customer who chooses to buy nothing in addition to traditional competitors.
Your selling position or value proposition is generally you do it cheaper or you do it better and people will pay a premium or something in between. Unless you can change the laws of physics, your selling proposition will likely never be unique.
I am guessing that you picked unique because you needed something that starts with U which is why I think that Foobar had a point.
I define unique as different. To succeed in business you need to be/do something different. That doesn’t mean that everything is 100% different, but something is different that sets you apart. Otherwise, you are simply selling a commodity. There is no money to be made in selling commoditized items because the price pressure has already squeezed the prices to the absolute bottom. If you sell a commodity, you make money with the value-add.
This is something I’ve been trying to point out since the beginning of this site; you shouldn’t start a business unless you can produce something different, or produce it differently than what is already out there. Otherwise, you are just destined to fail. If anything, the “u” is the most important letter in the entire acronym.
@Maren & Wilson – Thanks for the kind words. I’ll do my best to keep useful content flowing. I’m glad it’s helpful to you guys. I certainly wish I’d had a similar framework when I got started. (It probably existed somewhere, but I didn’t know to look.)
Totally agree with Maren this is going to help so many people that are out there like I was running like chickens with their heads cut off a year ago. I wish I would of known something like this back them it would have made everything a bit simpler. Thanks so much
Great post 🙂 Very relevant and full of useful info, i LOVE this kind of stuff because it lays out a road map for others.. cheers!
@Edward – Great approach. I think that’s an excellent way to start down the entrepreneurship path. Check out the 4 Hour Work Week, in particular chapters 9 and 10. It walks through starting a business exactly like the one you describe – and the narrower the niche, the better.
@Tyler – Thanks! That particular business is just getting off the ground. In fact, we launched last week. You can check out the basics online at http://www.3eWerks.com. Basically, we help both residential and commercial customers save money by implementing “green” practices and products. We’ll be firming up our product offerings in the next few weeks.
@Hugh – Great point. It’s never too late to assess and make adjustments.
Great list here! This is not only important when evaluating / considering new ventures, but as a test for existing businesses. I am a part of a small business and I’m going to look at this list and make sure that my business passes all of these little tests.
Hey Kendra,
I really connect with the idea of the “serial entrepreneur.” Maybe it’s just because I haven’t found the one thing that I can do for hours and hours every single day, but maybe it’s because I’ll just always crave something a little different.
Hearing about someone like you that is maintaining a # of different ventures is encouraging.
Also, I’m interested to know more about what you’re doing in the residential remodeling market. I just ended my employment with a big commercial/institutional construction firm and was thinking of using the knowledge I’ve gained to start something online and try to make a difference in the residential world. Most of the folks in that market are still talking to each other with fax machines, so it’s nice to connect with people online once in awhile.
Cool acronym!
Can you discuss your exit strategies of your 8 ventures? How do you value them in your net worth calculation?
thnx!
Thanks! More great questions.
Right now, I would have to say that none of my businesses have “exit strategies” in the traditional sense. My goal is monthly cash flow, and I enjoy working with the teams involved with each one.
In terms of net worth, I do update that aspect of my personal financial statement once a year – and I typically use whatever metric best applies to that industry. I’ve found guides like this one from Inc. magazine to be useful in that area – http://www.inc.com/valuation
I’ve been reading you guys off and on, in RSS. I thought, “They seem to have some energy, and the occasional good thing… But I sure hope they never try to offer advice based on words shoehorned into an acronym of the word ‘untemplater.'”
Sadly, that day has come.
I gotta give it to you, this was funny.
Foo Bar, that was funny. And thanks for your feedback. Admittedly, any acronym probably requires some amount of tweaking to make it work, but I thought this one accurately reflected the concept I was trying to convey. The acronym was simply an attempt to be creative with the presentation and avoid a boring list. Point taken.
Great way of explaining the proccess of business development for an untemplated individual.
How would you define a product vs service? Would a product be a phsyical/digital thing that is static (such as CD, desk, widget, software application), and a service anything that is dynamic? Or could a product include something that you set in place and can be customized on the fly (automated)? Would you define an aggregator site such as indeed.com or kayak.com as a product or a service? How about a search engine? Technically these would be services, but they could be considered a product because a computer does all the heavy lifting.
I would also be interested in hearing why you feel multiple streams of income are neccessary.
Edward – Great questions.
To me, a product is anything that requires little (or zero) additional time investment to make a future sale. So, I think all of your examples qualify.
As to the multiple streams, there are two main reasons. One is simply a reflection of my diverse personal interests and taking advantage of opportunities. Two is that I do have an overall goal of diversification – in that I don’t want all of my businesses to be subject to the same risks. For example, one is targeted at tourists in a particular geographic area that does have a risk of hurricanes and would be harmed for several months if that were to occur. Another of my businesses has a residential remodeling component and would probably see increased business if an event like that were to occur. Those two were not planned for that reason, but it is a factor I consider when evaluating the next opportunity. Basically, I don’t want too many eggs supported by the same basket.
Ok. I had thought that you meant that each business needs to have multiple revenue sources. And for the plan I’m working on, I have no clue how to make any money off of it beyond selling advertising space. In your acronym, the “M” is really the only thing that’s missing.
Gotcha. I didn’t fully understand your first question, but the concept is similar.
If you’re going to focus on one business, brainstorm if it’s possible to generate multiple products geared to multiple customer groups while utilizing the same expertise. In a few cases, it won’t be possible. But I think these are rare.
If you’re planning on creating multiple businesses, I think this is a little less important – as long as you have some diversification amongst your entire portfolio, so to speak. There are definitely different opinions on this topic, but I’ve found it to be an effective way to manage risk.
Fortunately, I’m not hoping/planning that this venture will be a primary or even significant source of my income. I guess you could say that I would have multiple sources of income because I won’t be giving up my day job for this.
Basically, I will be providing a central location for information that is freely available but difficult to find and is targeted to a very specific niche demographic. Outside of that demographic, nobody cares about it.