The basic criteria for starting a business

January26

I’ve run two businesses and written several more business plans so I feel I’m getting more and more in tune now with the kind of businesses I’m after.

These are my criteria:

  1. Scalable - the business could be massive
  2. Passionate - the business is something I’m really interested in and excited about
  3. Need/Want - it really satisfies a need, want or desire
  4. Low capital - hopefully this is temporary but currently I have little capital to invest

If my business idea doesn’t have these attributes then I simply won’t take the project on. If it can’t grow big quickly then it’s not worth my time. If I’m not truly passionate about the idea then when times are tough I’m going to really struggle. If it doesn’t satisfy a need or want it will never work anyway. And if it’s a high capital investment then financially I’m not going to be able to afford the sunk costs to get it off the ground.

You might think these criteria are a real hindrance but actually they’re a great help. From having a long list of ideas I can quickly narrow down to a small number of options and focus my attentions on one project quickly.