6 Months That Will Make or Break Your Business

What’s more, this one thing is the guiding light for creating a business that can support you. It’s no secret, its not hard to believe, and it is not even a new concept. Yet millions of people ignore this fundamental rule and create companies that are bound to fail.

I’m talking about research.

I’m not talking about a formal education, or even laboratory research.  I mean Raw Knowledge… the kind of fundamental understanding of the market and industry that is required to select the right opportunity, design the right business model, and develop the right messages for your customers.

Katie Rodan, founder of Proactive acne treatments knows what I mean.   See the video at the right, or see what Katie says about business plan research here.

And personally, I’ve spoken with and studied hundreds of entrepreneurs, and they roughly fall into two buckets:

(1)   The Careful Engineer. This guy has been in his industry for years and knows everything about it.  The Careful Engineer leaves the rat race to take advantage of that knowledge in their own company.

(2)  The Mad Scientist has an idea completely unrelated to their current job. And they spend just a few months researching the concept, the market, and the competition before jumping head-first into a new company.

Which type of entrepreneur do you think is more successful?

In my experience, the more successful business is actually built by the Mad Scientist…  and here’s why.

The Engineer lives his whole life in one industry – plumbing, airplane building, construction, pharmaceutical research, whatever – and he’s gotten complacent.  After years of doing the same thing over and over again, he knows a lot about a very little.

Right?  Everyone tends to know just what they need to get their job done.  The Engineer is smart, but specialized.

And worse, this kind of entrepreneur thinks he knows a lot more.

For example… If you’ve been a roofer for 20 years, you probably think that installing solar panels on the roof is no big deal.  And from a labor point of view, maybe that’s true.  So you start a business to install solar panels.

But what do you really know about solar power? Do you know which types of panels are the most efficient?  Do you know which brands work together?  Do you know which companies are already serving your area?  Do you even know how many homes have enough sun-lit roof in your area to qualify for solar panels?

In this case, the newbie has the advantage.  A Mad Scientist starting from scratch will beat the Careful Engineer every time.

The Mad Scientist starting from scratch will ask the right questions, be open-minded about the answers and find a position that makes sense.

The Careful Engineer will assume he knows the answers, commit to a weak position based on emotion, and strike out on his own with little more than a gut feeling.

I’m not saying that you need to know every step of the path before you go down it.  But be sure you know which way to hold the map.  A lot changes in an industry while you are not looking: if you’ve had your head down working in your niche, its time to come up for air.

How much time should you spend researching and planning?

Believe it or not, over and over again I hear the same answer: 6 months.

If you can truly do 6 months of intense research, you will be one of the most well-informed people on the planet in your industry.

DO THE MATH: Six months is about 180 days, or about 1,800 working hours.  If you spend even half of that time – 900 hours  — dedicated to learning a new skill, you will have more education than the average MBA student gets in two years of classes.  (I went to class ~12 hours a week, about 40 weeks a year, or just 480 hours a year.)  And since you’ll be studying just one thing, you are bound to learn way more than a college kid who mixes classes on bowling and basket-weaving with those in accounting and finance.

Time after time, successful entrepreneurs who have created amazing, ground-breaking companies, have told me that the first thing they did was to take 6 months and learn everything about their new industry.

The next thing they did?  Well, they put that knowledge into a business plan… but that’s a topic for another day.  

Dedicated to your (semi-annual) profits,

David

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