So You Want To Expand? Proceed Carefully!

Before you buy equipment and add staff to pursue a new shop or another gunsmithing specialty, evaluate your idea using the three P’s.

I built a deck out on the dune. It turned out well. Not perfect — when you do the work, you always see the minor imperfections no one else notices — but overall, I was satisfied.

“That looks great,” a neighbor said. “You could start a business building decks.”

Hmm, I thought. I could. After all:

Home improvement spending has spiked because of higher home prices; homeowners who might have moved up have chosen to improve what they own instead.

Finding people to do that work is tough; 90% of homebuilders report a shortage of carpenters, according to a National Association of Home Builders survey.

There’s definitely a market; a deck is a relatively inexpensive way to meet the stereotypical “space for entertaining” desire of every homeowner on an HGTV show.

No capital is required; I already own all the tools I need.

So, yes. I could start a deck-building business — but that doesn’t mean I should.

When asked how he validates business ideas, here’s what HubSpot co-founder Dharmesh Shah had to say: “The most dangerous ideas are not the bad ideas. Those you can discard easily. The dangerous ideas are the ones that are good — but not great. Yes, it could work, and yes, I could do it — but that doesn’t mean I should.”


Profit Potential

It’s not about the failure rate — I’m actually OK with that. It’s that good ideas eat up a lot of time/calories, leaving little time for the great ideas.

Why would starting a deck-building business be such a dangerous idea? At face value, it wouldn’t.

Product/market fit? Check.

Skills/market fit? Check. While I’m no genius, I would be smart enough to walk away from projects beyond my skill level.

Reasonable profit potential? Check. Especially now; the supply and demand curves would definitely be my friend.

But that still doesn’t mean I should. I enjoyed building my deck. But I don’t want to build your deck — and I definitely don’t want to spend all day, every day building decks.

That’s the other half of Shah’s could/should equation. Here’s his simple framework for judging ideas:

·      Potential: If it worked, how big could it be?

·      Probability: What are the chances it will work?

·      Proximity: How close is this to things I care about, know about, or am passionate about?

How you weigh each category depends on your situation. Early on, Shah focused heavily on probability for success; risk is not your friend when your primary goal is putting food on the table.


Examine Potential Returns

“Today,” Shah says, with a $17 billion company under his belt, “I solve mostly for numbers 1 and 3: What has great potential that I’m passionate about? (Even if I fail, I’ll have no regrets, because I cared enough about it).”

And that’s where the deck-building business falls apart for me. Probability of success is high. Growth potential? Sure — but scaling would require hiring and managing and infrastructure, and all the stuff I wanted to stop doing when I left a corporate job.

That only adds to the proximity problem; not only do I not want to manage dozens of people, I don’t really want to build decks every day. I like building decks for me and mine. I wouldn’t like building decks for other people. And I’m fortunate to have other work I enjoy more.

Trying to decide whether starting a particular business or adding a new service to your existing business makes sense for you? First, consider your situation. If you’re just starting out, the probability of generating enough money to live on could be the most important factor; what you need to do matters more than what you like to do. What you could and should do is put food on the table.

If probability is less of a factor, then consider potential.

And how easily you can scale to meet that potential. Unlike some ventures, a deck-building business isn’t easily scalable. No matter how big the potential market, you need to be able to service that market — and want to build and run the type of business required to service that market.


Do What You Love

Then consider whether you care about the business you will create. I could run a deck-building business. I could run a successful deck-building business. But I don’t want to.

The best way to define professional success? Whether you get to do work you enjoy. Work that leaves you feeling fulfilled, and satisfied, and happy. Work that allows you to control, as best possible, your own destiny.

The beauty of starting or expanding a business is that you are free to choose what kind of business. Not the business you could start, but the business you should start. Because we all have to make a living. But we also need to live.


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