TES 037 - Choosing The Best Business Idea

Hey there, real quick before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Hey there. I'm Mel Abraham, the author of the number one best selling book the Entrepreneur's Solution and the founder of Business Breakthrough Academy where we teach you how to design a business and create a life, a life of financial freedom and peace of mind. And welcome back to this episode of the Entrepreneur Solution show. And in this episode, we're going to get a chance to answer a question that comes up often. And that question is how do we know which is the right opportunity to spend our time and energy on? And you know, that came up for me. It comes up for entrepreneurs all around. I get asked it all the time. So in this episode, right after this brief introduction, I want to give you my framework and a tool, the opportunity evaluation matrix of how I look at opportunities, which ones I filter through and decide to do first, what I let go. So right after this brief introduction, we'll come back and answer that question. You know that as I said, there's a tool associated with this that's my opportunity evaluation matrix. And if you want to get access to the tools, just go to melabraham.com session037. And if you happen to not be by your computer and you're out at the gym, maybe you're out at the gym, maybe you're jogging, maybe you're, you're working out, maybe you're driving. I want you to be safe. So simply just text at some point. When it's Safe, just text mylegacy one word to 38470. We'll make sure that we send you the download link so you get the full value out of this episode for you. And so when we come back, let's get to figuring out what's the right opportunity to look at. See you soon.

Welcome to the Entrepreneur Solution where highly successful entrepreneur Mel Abraham becomes your entrepreneurial mentor. Here, Mel reveals his business building strategies and even gets a chance to answer your questions. Mel Abraham, a CPA by education, but an entrepreneur by exhilaration and a True believer in the entrepreneurial way of life. It's through entrepreneurship that we create community, support society and live our dreams.

It's where possibility meets reality again and you can have the life and lifestyle you want. One of freedom and peace of mind. Welcome to this episode of the Entrepreneur's Solution where it's time for you to be bold, dream big and live life your way.

Great. Welcome back. I'm Mel Abraham, the author of the number one best selling book, the Entrepreneur's Solution. And welcome back to this episode of the Entrepreneur's Solution show. And in this episode, as I said, I'm going to talk about an often asked question about how do we know which is the opportunity that we should be looking after? Which opportunity should we go after? Because you're going to find it's interesting, the more successful you are, the more opportunities are coming your way. I mean, I get calls at least weekly where someone says, hey, I've got this business opportunity for you, I've got this possible opportunity for you. I've got possibly this speaking opportunity for you. I've got this, I've got that. So they're coming at you and they become rapid fire and with an entrepreneur's nature which I, you know.

We have this shiny ball syndrome, I call it the hummingbird syndrome, is that we want to take on every opportunity. We want to take it in, but there's a problem with that because we can't satisfactorily, we can't effectively serve each and every opportunity that comes our way. So we need to have a way to filter that. And why this is important, if we understand this, is that.

If we are always taking on opportunities without any process, without any thought process, without any basis or framework in which to look at them, we're going to be completely lack of focus. And so now we're going to be all over the board. We're going to be jumping around from opportunity to opportunity, opportunity. We're going to wonder why none of them really come to fruition. None of them really come to their potential. None of them really grow to the level that, that they should. So one of the big problems if we get this wrong is that we end up with this complete lack of focus. The second problem if we get this wrong is that we lack the resources.

We have limited resources, if not in money, and we typically have limited resources and money, although we can make more in time, we do in time, in energy, in people and all of that. So what I need to do as an entrepreneur, understand here's my finite at Least for the short term. My finite set of resources. Where am I going to dedicate those resources? My time, my money, my energy, my team's time, my team's energy, my team's resources. Where am I going to dedicate those that are going to make the biggest impact? Because we're going to run out of resources if we try to take on other opportunities. And the other thing that happens if we get this wrong, if we get the opportunity selection process wrong, is that we end up not getting results. And now what happens is that we've got a lot of half started projects that none of them are really producing, none of them are really creating anything, none of them are really profitable. And now all of a sudden we start to question our ability to be effective. We start to question our ability to create profits and create viable businesses. But it's not because we don't have the ability. It's not because we don't have the competency. It's not because we don't have the entrepreneurial chops, if you will. It's because we spread ourselves too thin and we're not focused in the right areas. And so if we get these wrong, that becomes a challenge.

But if we get these right now, all of a sudden.

We have more focus, we have more results, we have dedicated the resources in the right places, so we're producing additional results. Which means that we have more resources to expand our reach, to expand the work that we're doing. And do that. In order to do that, we need to think about three key principles. And this is the way I look at.

Opportunities as we, as we move forward. So the three key principles that I want you to take away here is one. We need to follow our core strengths. You know, what are our core strengths? If we are outside our core strength element, then we're not operating in the most effective, efficient way possible. And what this is going to require at some point is doing your core strength kind of inventory, if you will. To really come to that. The second principle that I want you to understand is we want to follow the profitability. There's each opportunity has its own possible profitability and we want to follow the ones that make sense. And I'm going to give you a tool, or at least the way that I look at that. And then last, we want to bet on the probabilities. So not every opportunity that comes in, interestingly enough, not every opportunity that comes in has the same probability of success for whatever reason. It could be legislative, it could be technology, it could be resource oriented, it could be strength oriented, it could be market oriented, it could be for a whole host of reasons. But every time an opportunity comes in, I want to evaluate it on a scale of what are my core strengths, how does it fit within my core strengths. I want to value it on a scale of what's the profitability of it, and I want to evaluate it on a scale of what's the probability of success. When I understand, when I understand those three elements, how it fits in my core strengths, the profitability and the probability of success. Now I have at least the foundational elements to say this deserve this opportunity deserves further look. This opportunity deserves a further analysis. This opportunity deserves some attention to see if it can move forward. Here's how I do this. Just to give you an idea, let me give you a little backstory about how this all came about. I happen to sit on a board of directors. One of the board of directors that I sit sit on is for a company that was founded in the late 1800s. And we have a biz dev team, a business development team that goes out and brings business in to the company. And we've managed to build this company up in, I don't know, 10 years. We built it up from 30 million in revenues to 250 million in revenues. But one day I'm sitting in the board meeting and there's a whole board of directors in there. Here comes the business development team in there, and they're telling us all of the efforts that they're going through. You know, they're running to Japan and they're running to Canada, and they're going to Russia and the Ukraine and all of these places to look at these opportunities and evaluate them. And I said, and I asked the question to them, I said, just curious, what mechanism are you using, what framework are you using to decide which one to chase after? Because we were spending at least a couple million dollars, just cost, to send our teams all around the world to chase these opportunities. And the question really is, did that make sense? And, you know, the director of Business development looked at me and said, well, actually, we don't have a framework. We don't have a system. We don't have a process. We simply hear about an opportunity and we go after it. And so I introduced them to this tool to say, at least at a foundational level, we need to evaluate these things before we start spending good money to chase opportunities that maybe are great opportunities, just not for us, or they're great opportunities, just not at this time, or they're great opportunities, but they're not within the parameters of our vision, our directive, and what we want to do. And so the three things that I want to look at with respect to.

With respect to opportunities is to start looking at things at four different categories. And what I'm going to look at is trying to understand.

Which opportunities are what I call the pebbles. So here's how we're going to evaluate it. And if you can picture for a moment, a quadrant model. So we're going to just draw a crisscross, if you will, and on one axis, the up and down axis, that's our level of core strengths. And the horizontal axis, down at the bottom, is the level of profitability that the opportunity has. And so what I want to evaluate is, at least initially.

What is this opportunity relative to our core strengths on a scale of 1 to 10, on a 0 to 10, if you will. So the higher in the core strengths, the more likely we'll go after the opportunity. The lower on the core strengths, the less likely we go after the opportunity. Then along the other axes, I just want to understand.

What'S the level of profitability of this opportunity. The lower the profitability, the less likely we're going to go after it. The higher the profitability, the more likely we're going to go after it. And so, at least at the initial analysis, I want to know how it is on my core strengths, how it is on profitability, and I categorize, if you will.

The opportunities at four levels. The first is what I call pebbles. Now, the pebbles are those that are well within our core strengths, but there's very little profitability. In other words, there's very little to make out of. And a pebble is a small stone. So we got to get a lot of pebbles to make any kind of money. So there's not much profitability in it. And I'll talk about this. It says enhanced pebbles. I'll explain what that means when we get to that in a moment. The second category of opportunities is what I call boulders. Now, those are the ones that really light up an entrepreneur because they're high, high, high, high profitability. The problem with it is that they're not in our core strengths. So we've got low on the core strength scale, high on the profitability scale. We want to chase it because there's money in it, and we realize that we can use that to have a greater impact. The challenge is we don't. We're not good at it. So it's like trying to move a boulder, you know, so there's a way to deal with those that I'll talk about in a moment. But just understand that we've got pebbles and we got boulders. There's a third category. Now that third category is what I call sand. And we're going to avoid the sand because that is low profits, low core strengths. Okay. In other words, it's not high on any part of the scale and there really is no reason for us to go after because we're not going to be good at it and we're not going to make much money at it. So we want to identify those and avoid them and just kind of, just kind of get rid of those in doing that. And then the fourth category, this is the one. These are the ones that we want to really go after first because they're what I call the diamonds and we want to embrace those diamonds because those are the ones that are high core strengths.

High profitability. So we know how to do it really, really well and we can make really good money at it. All right, so that's, those are the four categories. If we put this in a, in a quadrant model matrix, if you, if you think about it this way, it would look kind of like this. So you would have at the bottom, the bottom corner, the bottom, bottom corner would be the sand. Is it low core strengths, low profitability? We move up the core strengths, that's where the pebbles are. We move to the right of the sand, that's where the boulders are. Because it's high profitability. And we move up in the upper quadrant, which is where we want to be. High core strengths, high profitability, that's where the diamonds are. Here's the thing to realize when we do this is that those opportunities.

That are sustainable and built on your positioning in the marketplace are the ones that are on the high core strength side, high profitability side. Otherwise we're dealing with commodity types of product and unsustainable profitability. Okay, hopefully that makes sense. Is that when we look at some of the, the work that we're doing, if it is low profitability, typically it's commodity based, which means that all the decisions in the marketplace are being made on price, not on quality, not on service, not on reputation, not on all the other things that will position you uniquely in the space. So let's think about this. We take what happened with this, this business development team is they came and I said, alright, so let's place these, let's rank these based upon core strengths and profitability and let's then graph them on the graph if we look at it this way and we say 0 to 10, 0 to 10. You know, on the graph, rank them. We can graphically, we can pictorially see this. And for those of you that may be listening on just the podcast, download the guide. It'll make it more sense. Make sure that you download the tool, download the guide, and you'll have it in front of you. I'll make it a little easier for you to understand. So we take each and every.

Opportunity and we put it on the graph. And now we have the basis in which we can look at it and say, oh, wow, this opportunity is all the way down here. It's a boulder. Which means that, yeah, high profits, not core strengths. I got to figure something out. Or this one's in the sand. It's low profits, low core strength. Or this one is a pebble because it's high core strength but no profits. Then that one's the diamond. And we're going to go after the diamonds. We're going to chase the diamonds first and we're going to leave the sand behind. The ones that are low core strength and low profitability. And then once we're done dealing with the diamonds, we might look at the pebbles and we might look at the boulders. Here's the key. Between the pebbles, the boulders, okay? Remember, the pebbles are the ones that are high core strengths, which means that we can do it well.

But they're low profitability, which means that even though we do it well, we don't make a lot of money at it. So what we need to do is enhance the value. Remember that earlier I said enhance the pebbles, so we need to enhance the value. So what kind of value add can you create? So the pebble, the perceived value in the marketplace, goes way up. Can you bundle things, can you package things differently? When you enhance the value, your pebbles will now become diamonds because you've enhanced the value in the market's eyes, and now you've moved the profitability up and down the line. The alternative is I have a boulder. Well, boulders are high profits, but low core strengths. The way to deal with these things is that. And once I've dealt with the diamonds first, I'm always going to do diamonds first. I'm going to leave alone the sand, and then I'll look at the pebbles and boulders. But with the boulders, what we're dealing with is we got the profits if we can do it right, but it's not in our core strengths. So what do we need to do? We need to bring it into our Core strengths. And the only way to do that is one of two ways. Either through education, meaning that we have to go train ourselves and get the training necessary to make it part of our core strengths, or through association. In other words, we create a joint venture with other entities that have the core strengths that would allow us to do this at a much higher level. And so when we either enhance the pebbles or.

Educate or associate the boulders, we now can move them into the diamond quadrant. And again this, this will be easier for you to understand when you download the guide and the tool that allow you to do it in your own world. And so that's really the key is that when we look at.

When we look at opportunities that come our way, I will always evaluate them on what are my core strengths? What's the ranking? My core strength ranking? 0 to 10. I will always rank them based on the ranking with respect to profitability, zero to 10. I will then look at them and say, great, I'm going to deal with the diamonds first. As long as it's in the path of my vision, it is in the path of my purpose and it's not taking me off in another direction from where I've committed as an organization. I'm going to look and do the diamonds first. I'm going to forget about the sand and then I secondarily I'll say, can I make the pebbles work out or the boulders work out? I hope that that makes sense to you. Then once I know what I have that are the diamonds now I start to look at them and say, alright, so now what's the probability of success? What are the risks, the risks associated with it? How can I mitigate those risks or reduce those risks and how can I increase the probability of success? So when I look at that diamond, the diamonds, and I have say three opportunities there, I want to look at them and say which one has the highest probability of success? That's the one I'm probably going to do first, then the second one, then the third one, in that order. So it's a process that you can go through. It's a way for you to be able to say no, not now or not ever, or not this way in doing that. Because I can assure you this, as an entrepreneur grows, as you continue to grow, you're going to get plenty of opportunities coming your way. And if you don't have a vehicle, a process to evaluate them, to rank them, to filter them, to turn around and know, these are the ones that I'm going to completely disregard, these are the ones that I am going to absolutely go after, and these are the ones that I might consider.

You're going to go after everything and then you end up with that lack of focus, lack of resources, and lack of results. And that's what we want to avoid. We want to give you a focused direction as an entrepreneur. We want to give you a way to produce additional resources so you continue to grow and continue to go after other opportunities and to get the results you want. And the Opportunity Evaluation Matrix is one of the keys to allowing you to do that. It's a tool that we use. It's a tool that I use with my clients. My clients use this all the time. So I hope you found this of value. I hope that this serves you. I hope this answers the question of what opportunity should I go for first and look at it in that context. And again, if you want to get the tool, go to melabraham.com session037. And if you're not at your computer, if you're not at your desk and you don't have the ability to access that, then automatically go to text us to 38470 my legacy, one word, no spaces. MyLegacy to 38470. I'll make sure that we send you the download link for the Opportunity Evaluation Matrix so you can get that and start putting it into play in your business, in your world, in your life, so you don't spread yourself too thin, so you make sure that you figure out what your diamonds are, how to go after your diamonds, how to make those reality. And if you found this of value, do me a favor, do me a favor, share it with a friend. I'd love to give these tools and give this to the people out there that are, that are looking for ways to build their business, to build a new life, to create a new paradigm, to turn around and say, I would really like to be on this entrepreneurial journey and this is my way of being an entrepreneurial mentor to the many that can't necessarily come in and work with me one on one as a mentor or work in some of the small group work that I do. So share it with a friend. If you haven't done so already, make sure you subscribe because I'm doing these episodes obviously weekly to make sure that I'm here for you as you move forward. And just like this question came in, if you have a question about entrepreneurship, about business, about success, about wealth, go ahead and go to askmelnow.com leave me your question. We'll make sure that we get it answered on one of the upcoming episodes. I'm here to support you. I'm really looking forward to hearing about your journeys, to hearing about your successes, to seeing the impact and the difference that you're making in the world with your ideas, with your products, with your services, with your being. And I think that's what we're really here for as entrepreneurs. We are here to create community, support society, and live our dreams. And if I can have any hand in doing that, I feel blessed and honored to do so. So until we see each other on the next episode, may your vision be grand, your journey epic, and your legacy significant. See you soon. Cheers. Bye.

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