Most entrepreneurs I know are also athletes – by nature we are a competitive bunch. Athletes don’t expect to master anything without practice and they know practicing will never end.
I played basketball in high school and still play today. I practice at the YMCA and I will not leave the court unless I hit at least 7 out of 10 free throws.
In high school, I shot 100 free throws everyday on a dirt court my Dad made behind our house. We had a very steep driveway so a basketball court there was out of the question. So Dad fired up the tiller and cleared a space in the woods then rolled a log across it to compact the dirt into a smooth court. Yes, the Jaunzemis clan is quite resourceful and bootstrapping was a way of life. OK, maybe we were squatting on land that was not ours, but Dad also taught me to take risks.
Like sports, entrepreneurship requires the same commitment to practice. Practicing is an action which is different from learning. Practicing allows you to know how the action feels mentally and physically. So you know what it feels like to make money, to win, to lose, to sell, to ask, to put yourself on the line.
Jason Fried of 37signals wrote a great article about this titled, How to Get Good at Making Money where he offered this exercise:
So here’s a great way to practice making money: Buy and sell the same thing over and over on Craigslist or eBay. Seriously.
Go buy something on Craigslist or eBay. Find something that’s a bit of a commodity, so you know there’s always plenty of supply and demand. An iPod is a good test. Buy it, and then immediately resell it. Then buy it again. Each time, try selling it for more than you paid for it. See how far you can push it. See how much profit you can make off 10 transactions.
James Altucher encourages exercising your idea muscle with the Ultimate Cheat Sheet for becoming an Idea Machine, you have to go read the post to truly appreciate the waiter’s pad:
Take a waiter’s pad. Go to a local cafe. Maybe read an inspirational book for ten to twenty minutes. Then start writing down ideas. What ideas? Hold on a second. The key here is, write ten ideas.
Some of my exercises include:
- using the Amazon app to scout for books at the Goodwill which I then sell on Amazon
- listing things on Ebay or Amazon to exercise my online marketplace muscles
- re-listing the things my partner can’t sell on Craigslist to see if I can sell it with improved copy writing or photos
- attending business events just to practice my networking skills
If you want to practice buying a business, try this:
- sign up for alerts of businesses for sale on bizbuysell
- For every business you might be interested in make a list of five ways you would grow that business.
- For every business you read make a list of three people, businesses or investors who should buy that business (you don’t have to know these people, but think about who would benefit by buying it).
- Occasionally share the business for sale with one of the people on your list with a note explaining why you thought they would be interested.
- Keep doing this until you find one that you can’t stop thinking about, one you know you could grow with all the creative ideas you have.
- Now go pitch those three people on your list and ask them to invest in buying the business.
One of the most common questions I get about buying businesses is how do you get the money to buy your first one? If you practice this enough you could land an investor in the process.
Dana,
I enjoyed your interview on ecommercefuel and also have gained from your articles here. I buy into your argument that it is best to buy a business vs. starting one from scratch for many of the reasons you stated. I also think given the right business, prices are “cheap” for the cash that is generated and that online business can scale. However, I have never run a business and, specifically, never run even a blog online. I am not clueless about technology, etc., but would be starting from ground zero if I bought an online business. Also, I have fairly good business knowledge around the #s, valuation, etc.
All that said, do you feel it would be best to start from scratch, say, an ecommerce site in order to learn? Or, would your advice still be to buy and figure it out?
Thanks and am just looking for your opinion as someone who has bought, sold, and run businesses.
Jonathan
Hi Jonathan,
I think buying a business is very good for someone just starting out because most of the time you get training from the seller. The seller will tell or show you everything you need to do to keep the cash flowing. Sometimes you may not understand why you need to do it that way and you will come to that understanding later as your own knowledge base catches up to the business you are running. Think of it like on the job training.
Starting a business from scratch is very hard and can be incredibly discouraging when you have no sales and you don’t know how long it will take to get to a profitable level. So many of the tasks in a startup, you will only do one time and you may never have to do them again. This is why I like a business that is already profitable…those things are finished and I can focus on growth.
You have to be ready to learn and research the things you don’t know, but you will have a foundation to build on when purchasing an existing business.