Don't choose a business that is too niche.
And more advice from Jim Munson, CEO of Brooklyn Roasting Company
Brooklyn Roasting Company sources and serves superb and sustainable coffees from the world’s most renowned growing regions. They favor third-party-certified coffees in order to help guarantee a living wage for historically impoverished farmers. They celebrate the strong local character of Brooklyn and its rich coffee-roasting heritage and have cafés throughout NYC.
1. Don't pick a business that is too niche.
There are all kinds of businesses, and if you are going into business, you have a ton of choices to make. First of all, are you going into a business that already exists? Are you going to try to invent some kind of new business? When I started, I figured there are certain businesses that I might want to be in and other businesses that I wouldn't want to be in. One business that I knew existed that I thought that might be attractive was coffee because it satisfied a couple major mental requirements. It was big, so it had commercial potential, and it wasn't limited to some small niche. I wasn't going to be making the snaps for some luxury handbag or making a type of specialty citrus tea that people like in certain neighborhoods. It was going to coffee, one of the most widely consumed beverages in the country. There are lots of big industries. And, that was attractive as a business because it is popular and popular things might be profitable as well. However, if you are passionate about Indian handbags and you know that's what's right for you, then maybe even that passion will drive a small niche business into a success.
I thought it would be a good idea to start in a big business. Pick a business that matches your personality or your business goals. I liked the feeling of coffee. It had a romantic, warm, cool, vibe to it. So part of it is the scope and size of the opportunity. The other is just the vibe of the business. I liked the people I knew in the coffee. I also had some prior experience. If you think you want to be in the car business, it is probably a good idea to have some car business experience. It is tough to say, "well I always wanted to build a cool car with wings that floats just like Chitty Chitty Bang Bang. I am going to start with it even though I haven't been in the car business." Maybe not. Experience helps, the vibe helps, and your business goals are also very important.
2. Don't be afraid to make mistakes.
You have to except that nobody has a crystal ball. You are going to make mistakes. You have to have flexibility and agility when it comes to recognizing those things. Not letting the big waves turn into tidal waves. They are going to cream you. You have to swim through some stuff. You need things to succeed especially when you are new and small. Imagine starting with a snowman. You start with that little ball. It doesn't feel like a snowman the first time you roll it in the snow. It can fall apart for all different kinds of reasons. A young business hopes to be a big snowman someday and that first part is essential. If you start a coffee business, it only becomes a snowman if it grows big. It is not a coffee business the first year. You need money, good partners, and help. You need to have a vision for the product. I was really lucky in all those areas. We managed to put together the building blocks of a good coffee team. But, we made mistakes.
3. Be selective with investors, if you can.
You need to think about strategic investment. You need to think about people who will bring things to the table. That is really hard to do. There is "before money" attitude and "after money" attitude. You don't know what people are going to do when they are invested or when they are confronted with partnership instead of just individual ownership. Can they play well with others? Do they have that ability or not? Irrespective of their intentions, some people don't have the constitution to be able to wind up to grow the snowball to make a snowman. You think about everything when you are bringing on investors. Is this the right person? Is it the right amount of money? Is it the right rate of return? Are we going to be able to do what we said we were able to do? After a certain point, we got to pick who we wanted as investors.
4. Don't stray far from your original idea.
Stay true to your original idea. Opportunity itself does not mean success. Have one clear idea. If you do one thing well, you have the best path to being successful. Focus. Short-term opportunism can lead to a diffusion of your idea. Let's imagine that we just wanted to have coffee shops selling coffee. You have all these people coming into your coffee shop that want to buy all kinds of things. You could sell doughnuts and pastries. If they are coming in for that, you could sell them toothpaste; they are going to need that. Lottery tickets, cigarettes, and gasoline. Next thing you know, you are a convenience store. And you are like, wait a second, we are out of our market, we don't know what we are. Now we don't know what to do next because we have out hands in so many things. Our identity is lost. People seem to need to have handles to grab onto in business. Customers reward businesses that put themselves in focused corridors.