DEVELOPING BUSINESS IDEAS - PART 2

For those who have been following this column, you will recall that last week’s topic was “Developing Business Ideas”. In a previous article I defined a business as “A system through which a product or service is produced or provided to meet needs or solve problems.” Then I stated that if you want to develop business ideas, there are two things you need to do. Firstly, you need to observe and identify the needs and problems of society. What is one need or problem many people in your community, city or country face? If you think of a business as a problem-solving or need-meeting system, the playing field gets so wide that there is definitely one thing you can do. You will not run out of ideas. In fact, the only limitation will be your imagination. Or as people say, the sky will be the limit.

I have stated that after you have identified a need or a problem, the second thing you have to do is to assess yourself to see how you can provide a solution to that problem or meet that need with who you are and what you have. And I have discussed the importance of meetings needs using your natural talents, your hobbies and your special skills.

I informed readers at the end of last week’s article that this week’s discussion will be on conducting market research, but I feel I should dwell a bit more on business ideas because I believe that this area needs further elaboration. I would also like to share with readers my own personal experiences in relation to business ideas. Let me state right from the outset that the purpose I am sharing my experience is not to boast to you but to get you to think about what you can do for yourself.

Failed Attempts At Business
I have attempted several businesses. The first was a second-hand clothing shop. The second was operating a PMV bus. The third a piggery in the village. The fourth a fast-food outlet in the town I live. One thing that is common about these attempts at business is that they all ended up failing. There are several reasons why each of these businesses failed, which I will not get into here. But one thing I realize now is that I started all these businesses without any preparation and research. I started them mainly because I saw other people doing these things and seemingly making money from them. In other words, I was a copycat instead of being an original. Just because other people were making money, I thought I could make money too. I learnt the costly lesson that this was a wrong premise altogether.

Consulting
In 2001 I tried doing consulting work and conducting training on coffee factory management, quality control and international trading (exporting). I based this business on my knowledge of the coffee industry, which I had worked in for some years. It worked for a short while but soon I realized that the market for my services was too small. Even though the industry is big, the number of players who would need the kind of services I was selling was small.

Book Publishing
So I went back to the drawing board and started thinking about what I should do next. That was when I started examining what needs are out there, and my own talents, hobbies and skills. And that is how I ended up going into book publishing followed by motivational seminars. I realised that writing is one of the many talents I am gifted with. So I wrote Success After Graduation, my first book, and had it published in 2006. The book discusses issues which students do not learn about while in school, such as what the job market is like, how to write a job application and perform at an interview, how to develop work habits that will help you rise up the corporate ladder, what you do when you are fired by the boss, how to plan for retirement, marriage, and self-employment when job hunting becomes unfruitful. The book was self-published, and it sold out in the first lot within 6 six months. After reprinting a second time, I have expanded the book and am now in the process of publishing a second edition under a different title.

Young Money, my second book, was published in 2007. I wrote this book to help working class people manage their salaries in a way that can help them become financially independent and free. The need for such a book became clear to me when I saw that the bulk of working people were living in habitual debt due mainly to financial mismanagement. That book sold out within the first 3 months and I have had it reprinted twice already.

In 2009 I published Be Your Own Boss, my third book. This book has impacted most people that have read it. I am hearing that many people have started their own businesses after reading the book, which is exactly why I wrote it in the first place. Many of the articles in this column have been based on this book.

Steven Winduo, an academic from the University of PNG, stated in an article in The National of 16th July 2010 that as far as he is aware, nobody in PNG writes for a living. He was wrong, because I have been writing for a living for the past 4 years now. I am not saying that I am rich from this profession (hopefully one day I will), but I am making a living writing full-time.

Mr. Winduo was probably correct as he was discussing book writing for a living from the perspective of an academic. There isn’t a lot of money instance from writing poems, novels, biographies or technical papers. But I believe that if you write a text book and market it well, you can make big money because locally-written textbooks are a need in this country. You can in fact retire on one well-written and marketed secondary or high school text book that is in line with the new education curriculum. Most teachers have been complaining that the out-come based (OBE) curriculum requires teaching materials (text books and student workbooks) which are not available. Well, there is a need right there. If you meet it with your writing skills and teaching experience, you can literally set yourself up for life. Something for teachers and lecturers to think about.

Going back to my publishing business, I have identified so many needs in the country that I have a plan to write at least 10 different books to meet those needs. I will shortly be publishing 2 of my latest books, one of which is aimed at addressing the needs of students and the other the financial problems faced by church-going people. From the responses I have been getting from readers of this column, I have identified the need for a book on how to start a business, so I have started writing it. I have also been asked by many people how they can write books as well. I take that as a definite need, so I am writing a book on how to write a book. Two other books are on real estate and stock market investing.

Books are products I am developing to meet needs and address problems faced by many people in this country. Making money is secondary to me. If I can help people solve their problems or make their lives worthwhile, I know that money will come. That is the attitude you need to have. Don’t go for money first. Don’t start a business to make a lot of money. Do something that helps people, and money will find you.

Motivational Seminars
When I published my second book, somehow Radio Australia’s Pacific Service got wind of it and did a live interview by telephone. Among the listeners was an Australian manager of Hasting Deerings (PNG) Limited based in Port Moresby. After the radio interview ended, he contacted me by email and asked if I could come talk to his employees. He also attended the launching of the book by Grand Chief Sir Paulias Matane.

In our discussions, he told me how much the company paid its employees, and how that the majority of employees were constantly running out of money and asking for company advances. He also stated how surprised he was to learn that many of his employees had been borrowing from more than one lender. He stated further that indebtedness was impacting on peoples’ performance, such that some people were not turning up for work on paydays because their debtors were waiting outside the office to collect their money. Some were even having problems in their families because of financial difficulties.

That discussion helped me realize that this was a nation-wide problem. It also brought back memories of observations I had made of the people I had worked with before. I also recalled how I used to run out of money too and borrowed several times when I was on salaried jobs. It further reminded me of a recent attempt by then Chief Secretary Isaac Lupari to stop public servants from borrowing money from finance companies, and how the borrowers colluded with the lenders to take court action against him because people felt that he was trying to cut off their sustenance.

I therefore designed a motivational training program called “Seven Steps To Financial Freedom” to address the problem. Financial freedom is the point in life where you do not need to work, either for yourself or someone else, and yet you are able to meet all your living expenses. You live the life of your dreams because your money works for you. This contrasts with what school has taught us to do, which is to work for money.

I am thankful to Hastings Deering for helping me launch the seminar part of my publishing business. The company took me to Lae, Port Moresby, Tabubil, Lihir and Kokopo to teach employees how to manage their fortnightly pay with a view to becoming financially free through budgeting, saving, starting businesses and investing. I have also presented this training to employees of the Coffee Industry Corporation, the Investment Promotion Authority and Barrick PNG’s Kainantu gold mine. This week I conducted pre-retirement financial management and investing training for PNG Power employees aged 47 years and over at the Yonki township. Next week will be in Hagen. I am in discussions with Air Niugini, PNG Forest Authority and Barrick Porgera as well.

Other seminars I have developed cover academic excellence for students, book publishing, real estate and share market investing. I have also been in discussions with several MPs about the possibility of conducting business training for unemployed young people in their electorates.

I am not telling you all this to boast about what I am doing. My purpose is to help open your eyes to look around and see needs and start meeting them with your unique set of talents and skills. After having tried several businesses which were based on what other people were doing, I think I am now in a business that is unique, because it is based on my own uniqueness. I am probably the only one writing and speaking for a living in PNG today. That places me as the first in the writing and motivational speaking market. I have two income streams which are complementary. I write books and design seminars based on the books. I get paid to speak, and I also sell my books.

I am enjoying every bit of it because what I am doing is inspiring other people to believe in themselves and realize their potential. People are using my ideas to start their own businesses, invest in properties and shares, etc. For example, I know of two recent university graduates who started their businesses after hearing me speak at a church. One of them has reported that he is now running a million-kina operation after only 2 years of starting the business! Many people have given up on betel nuts, alcohol, smoking and gambling, while others have come out of debt and have started to save money for the first time. And yes, I am making money from these seminars, which as I have stated, is secondary. I help people become successful, and I make a living in the process. That, I reckon, is the real purpose of a business.

If you do what others are doing, you will face competition right from day one. But if you do something completely different, you will be first in the market. That will give you a head start. My challenge therefore is that if you are really interested in starting a business, think of doing something unique. Think of needs which nobody else is addressing. In other words, think of carving out a niche for yourself.

However, if you run out of ideas and resort to doing what people are already doing, do it a little bit differently from the rest. Add your personal touch to it. Do something that will differentiate you from the others. This is the second best option available to you. The best, and more challenging option however, is to start a completely novel or new business.

Developing Business Ideas

In the last article I discussed natural talents, hobbies and skills as the basis for a thriving business. The crux of the discussion was that if you are to go into business, make sure that business is aligned to your talents and hobbies, because only then will you enjoy running the business. If the business is based on your skills or on what other people have been doing (meaning you just copied their ideas), you may make money but you may not be satisfied because it goes against your nature. If you ask seemingly successful business people, they will tell you that they still feel there is something missing in their lives. Their real interests (talents and hobbies which give them real satisfaction) lie elsewhere.

Let me give you an example. PNG has recently witnessed a boom in motels, lodges and guest houses, both in rural areas and in the main centres. This has been a response to the shortage of reasonably-priced accommodation in the hospitality industry. All the hotels have priced their rooms out of the reach of the majority of clients, so small lodges and guest houses have sprung up to meet the needs particularly of ordinary Papua New Guinean travelers, small business people, public servants etc. Many families in urban centres have converted their houses or parts of them into guest rooms which they charge on a nightly basis instead of renting the houses out for monthly income. A four-bedroom house can be rented at between K500 and K1,000 per week depending on location, but it can also make between K80 and K150 per room per night. In this instance, the owner has the potential to make between K9,600 and K18,000 per month (assuming 100% occupancy) instead of just K2,000 and K4,000 per month by renting the house.

I have been doing a bit of travelling lately. As a small business person, I cannot afford staying in a hotel, so I have been staying in lodges and guest houses, most of which are run by families. What I have noticed in many instances is that even though the location of the place and the rooms are okay, the atmosphere is not inviting. Sometimes people do not greet you; some are rude. You can feel that the people who run the business are only interested in money, not you as another human being. If you look into the lives of such people, you will invariably find that they are not naturally generous and hospitable people. They are running the place just to make money.

A family friend recently established a lodge. The man and his wife are very compassionate and generous people. They have looked after a lot of other peoples’ kids over the years. You can sense love in their hearts when you talk with them or visit them at home. Their lodge is always full of guests, so they are making a lot of money. But for them, the lodge is not merely a money-making venture. It really exists as an extension of their hearts of hospitality and generosity. It is an avenue for them to meet people and show them acts of kindness. You can sense generosity when they give you a free complimentary breakfast. Their meals are also very generous. You get more in terms of quality and quantity than you can get from a hotel. For me, this family is in the right business. They are doing something that aligns well with their nature and the kind of people they are.

What Business Should You Start?
As you may recall, I have defined a business as a system established to solve problems or meets needs of society. When we see a business in operation, our minds immediately go to the money that is made. But money is only a reward. The main purpose of the business is solving problems and meeting needs.

If you think of a business in this way, you will realise that the sky is the limit when you start thinking of what business to start. This is because whichever way you look, you will see problems to be solved or needs begging to be satisfied. Most people see these problems and needs as just that: problems and needs. But people with entrepreneurial minds see problems as business opportunities. They believe that problems and opportunities are opposite sides of the same coin.

So if you have been reading the articles in this column and have been wondering what is the best business to get into, I encourage you firstly to open your eyes and see the needs that are out there, and secondly, to see how best you can marry or match those needs to your special set of talents, hobbies and skills. That is if you want to do something that is novel or completely new and unique, something different from what everybody is doing.

I have been emphasizing this because I believe that your chances of success are greatest if you are the first to spot an opportunity and establish a system to take advantage of it. When you do something new and start making money from it, other people will definitely copy what you do. But being first in the market gives you the advantage of establishing contacts and developing a client base which newcomers may have a difficult time winning over.

The next best thing you can do is to look at what other people are already doing, and introduce a product or service that is somewhat differentiated from what is on the market. Or if you live in a centre where nobody is doing what you have seen people do in another place, you might introduce exactly the same product or service if you have the means to do it. This is in fact one of the main ways the majority of businesses have been started. That is why the majority of businesses are similar, with only a few differences in the way the businesses are conducted or the products or services are packaged and delivered.

Let me give you a simple example in the PNG context. Consider the market for live chickens. In Goroka where I live, 8-week old chickens used to be sold for K20. Today, demand is such that chickens are sold for between K25 and K30 at ages ranging from 6 to 8 weeks. You can easily sell 6 week old chickens for K25. Most farmers buy day-old chicks in lots of 50 at a time. They then feed the chicks for 6 weeks before selling. After sales they buy another 50 chicks for fattening. So their sales regime is 50 chickens every 6 weeks. Assuming that all the chickens live and get sold, their gross income is K1,250 every 6 weeks. Half of that income would cover costs, with the other half being profit.

If you wanted to get into the live chicken business, you could do it a bit differently as follows. Instead of buying 50 day-old chicks, you would buy only 20. After 2 weeks you could buy another 20, and another 20 the following fortnight. In this way you would have a constant supply of 20 chickens to sell every second week.

Let us consider your income potential under these two regimes. If you sell 50 chickens every 6 weeks, you would work with 9 batches in a year. Your gross income would be K25 x 50 chickens x 9 batches = K11,250. With 20 chickens every week, your potential annual gross income would be K25 x 20 chickens x 26 batches = K13,000.

The advantage of selling 20 chickens every second week is not so much the money you make. Of course you are in the business to make money so money is important. But what I want you to see beyond money is the need for live chickens that you would be meeting. No matter where you are, there is a big need for live chickens. There are always different kinds of parties, celebrations and ‘mumus’ going on. In PNG society traditional ceremonies take place almost every weekend, even in urban centres. And people prefer live over frozen chicken.

What I have noticed is that many farmers do not have chickens to sell on a consistent basis. Most of them tell clients that they have run out of chickens or that the chickens are not ready for sale. Not many have chickens to sell every week. So their incomes are sporadic, not constant.

If you came up with a plan to sell batches of live chickens on a fortnightly or even weekly basis, you would have a beaten path to your house, because buyers would know that no matter what day or time they come looking for chickens, you would not turn them down. You enable them to meet their needs, and they happily pay you. The word would also get around that you are a serious farmer who has chickens to sell every day.

You could start with 20 chickens a fortnight, then to 20 a week and maybe increase to 50 or 100 a week after you gain experience and establish an efficient management system. At that level it would be a business turning over thousands of kina in a year.

I am sure that you can think of several other businesses people already run which you could improve on and make a comfortable living from.

Brainstorm Several Ideas
It is better to consider between 3 and 5 ideas instead of locking yourself into just one idea. The more ideas you consider, the more likely you are to zero in one that works. Don’t limit yourself. Be open-minded, and don’t be afraid to even consider ideas which seem crazy.

I have discovered in my own life that ideas in my mind come to me in a different way when I speak them out and hear myself express them. I therefore like discussing with people, not to get their opinions but primarily to use them as my sounding boards. All I need for them to do is to just listen and allow my words to bounce back from them. The more I speak, the more new ideas come to me in ways I never thought of initially. It is based on this experience that I also like listening to people talk about their dreams and aspirations. They need me as their sounding board. They need to get their ideas bounce of me and return to them in a new ways.

It is for this reason that I normally advise young people and students to establish what I call ‘success councils’ made up of like-minded people where they can generate and share ideas. Some people call them ‘master mind’ groups. Most young people get into groups to talk about their boyfriends and girlfriends, or sports, politics, religious beliefs, etc. While these may be important subjects, I propose that it is even more important to talk about business ideas in such groups.

Many large corporations which are progressive have such groups where they encourage employees to talk about ideas to take their organizations forward. They are already successful but they don’t rest on their laurels, because the business world is becoming increasingly competitive. In order to survive as well as to make progress, they generate new ideas through the ‘master mind’ groups.

I have read that an increasing number of educational institutions in America and elsewhere have been encouraging students to form such groups and start businesses even while studying, in recognition of that fact that paid jobs are scarce. Many universities now boast student entrepreneurs as a result of these business brainstorming programs. This is something for our institutions of higher learning to consider.

The subject of today’s discussion is obviously extensive and I know I have only scratched the surface. The two possible ways to develop ideas which I have highlighted are firstly to consider starting a business which is completely new by tapping into your talents or hobbies and matching them to the problems and needs around you. Secondly, to take ideas which are already working and make improvements to them so as to make your business stand apart from the rest.

I hope you have gained some insight into how you can develop a business idea.

Starting A Business: Your Talents, Hobbies And Skills

The first step to starting a business is discovering who you are and what you have.

What Are Your Natural Talents?
What you must understand is that you are a unique human being. Out of the 6 billion or so people who inhabit planet earth today, there is no one exactly like you anywhere in the world. You are so intricately designed that the very marks on your palms and fingers are completely different from everyone else’s! That is why criminal investigators take peoples’ finger prints. Even identical twins have different sets of finger prints.

You are the only one of your kind. What follows from this is that because you are unique, there is something that you can do, the way only you can do it. Other people may try to do what you do, but they can never do it exactly like you can. Other people may try to be like you but they can never be you. Neither can you be like others so there is really no point in trying to be like other people.

Secondly, you need to understand that regardless of whether you believe in Charles Darwin’s Theory of Evolution or the “survival of the fittest” doctrine, or the Bible’s creation account, there is something you have been born with which is designed to enable you to survive. In other words, you have an in-built talent or ability which you can use to make a living for yourself as well as to bless the rest of society in your own unique way.

I raise the above points because when it comes to business, there are a lot of copycats around. People see what others who are in business do, and the kind of money they make, and they try to do exactly the same. This is especially true in Papua New Guinea. That is why there are so many failed businesses and only a few successes. That is also why there is a lot of competition in the business world. Everybody tries to cut corners and undercut or outdo the others in the marketplace because they are all in the same business.

If you want to succeed in business, you need to discover and build a business based on your unique natural talents. You may be doing what other people are doing, but the application of your talents will set you apart. What you do will be different from the rest. The product you supply or the service you provide will be differentiated by your nature, and you will be able to carve out a niche for yourself. Only then can you be in business for life.

Let me give you a personal example. I am in the business of writing books and conducting motivational seminars in the areas of academic excellence, financial management, business, and investing. Writing is a talent I was born with and have developed over the years. Speaking was a talent which was dormant for many years until only recently. In fact I didn’t know that I had the talent to speak in public in a way that would inspire other people. I have been a very shy person from birth. Many people who knew me in the past are surprised when they hear me speak with boldness and confidence in large gatherings or on radio.

I express my uniqueness when I write or speak. I do so in a way only I can do it. This differentiates me from other writers and speakers. That is why I am not afraid to tell other people how to write books. I openly share with them the process involved in getting a book from the stage of an idea to getting it published and placed on the shelf of a bookshop, because to me, nobody can ever write the way I do. I don’t see other writers as competitors, but as colleagues in a market so wide as to accommodate every one of us.

I hope you get my point that to succeed as your own boss, you need to discover and build a business on your natural talents. If you look at who makes the most money today, you will see that it is movie, rock and sports stars. Most of these people are not highly educated or skilled, but they are very talented. The more they express their uniqueness to entertain or satisfy the emotional needs of other people, the more they get paid.

Recently, on a plane trip from Port Moresby to Mount Hagen, I found out that the gentleman sitting next to me was a recording artist who was returning after recording his latest album with Chin H Meen studios. I discovered from the conversation that he had left school after Grade 6 and had become an ordinary villager. But he was making a name for himself as well as good money from his natural talent as a musician and singer.

What Are Your Hobbies?
The second thing you need to find out about yourself as a first step towards becoming your own boss is to discover what your hobbies are. Hobbies are things you love doing without being told to do so. A job is what you do because somebody stands at your back with a command or a stick; a hobby is what you do because you just love doing it. It is something you do without struggling – something that is so natural that it moves you in its direction every spare time you have. You can build a neat business out of what you ordinarily do.

If you go into any office today, you will see pot plants. These plants are placed there by people who grow them as a hobby. They grow the plants and either sell or hire them out. Some of these people do it as a part-time activity to supplement their income, while others do it for a living. These people are invariably hobbyists. The same goes for most of the people who grow and supply flowers.

Most of the large corporations in the world today were started as hobby activities by the founders. Popular corporations such as Dell Computers, Ford, Honda, Microsoft, Virgin Airlines, Kentucky Fried Chicken, etc started out as hobbies. Most of the founders started out on a part-time basis. Michael Dell, for instance, is said to have started Dell Computers in his college dormitory using his student allowances. He would buy used computer parts and build computers to customers’ specifications using his dormitory as his workshop. He became so engrossed in it that he flunked his studies. But that didn’t worry him. He simply moved down the road, rented a small warehouse and started his business, and became a multi-billionaire within 15 years.

I have a friend who started his business based upon his hobby of buying wrecked vehicles, getting them fixed and selling them. He was trained as an agriculture officer, and worked in the primary industry sector for many years. But his hobby was vehicles. I have watched him starting with just one used vehicle in 1998. Today he runs a very successful hire car and trucking business. He talks and breathes trucks and cars. That is what moves him such that he can’t stop talking about them. Money is secondary to him. I know this because he has not changed his hire rates for the past 12 years, and his trucking rates are currently the lowest in the market. He is in the business not to make money; rather, he is pursuing his hobby, and money just flows in.

My hobby is reading. I have been reading since primary school days, and still read every day. I carry books everywhere I go, and literally sleep with books. This helps me in writing books. In the past 4 years I have written 6 books. Three have been published and three will be printed later this year. And I have many more coming. Many people have asked me how long it takes me to write a full-length book of between 180 and 200 pages. My response is between 4 and 6 weeks when I concentrate. For smaller books, a week is probably sufficient. This is how long it takes me to write books on subjects I am passionate about.

I have not made much money or become rich and famous as an author yet (I hope I will one day), but money is not what motivates me to do what I do. What moves me to write and speak is the passion and desire to see other people getting inspired on the inside so much that they take action on the outside to improve their lot in life. I just enjoy getting people to believe in themselves and do things they wouldn’t do otherwise. That is why I write on subjects which most people consider to be secrets to success.

That is what will happen when you focus on your hobbies. You enjoy what you do, and money flows in as a bonus. Your real reward is the satisfaction and enjoyment from what you pursue.

What Are Your Skills?
Most people tend to look towards their knowledge and skills when it comes to deciding to get into business. But for me, knowledge and skills come last, because not everybody possesses them whereas everyone has a talent.

Many people dream about starting businesses but because they don’t have educational qualifications or special skills, they convince themselves that they cannot do anything. The result is that a lot of potentially successful business people live in unnecessary poverty and struggle. They are destroyed by the ignorance of their natural talents and hobbies which if they knew possessed, they could turn them into thriving businesses.

That is in fact the problem faced by the majority of school dropouts and unemployed young people today. They focus so much on the knowledge and skills they don’t have, that they become blind to the natural talents they have been born with. What actually hinders them from succeeding in life is not what they don’t have, but what they don’t know they have. They focus on what they don’t have, and overlook what they do have. They also believe so much in knowledge and skills as necessary pre-conditions for starting businesses, that they don’t realize the fact that some of the most successful business people in the world today were dropouts or have never been to school at all.

Having said that, let me say that I do not discount at all the skills which you have acquired in an institution or at the work place. You can start a business using the knowledge and skills you possess.

Today, many experts are leaving full-time jobs to work as freelance consultants. While they were working, they gained experience, received further training, and established contacts which they can now make use of to further their own businesses. The increasing trend in the corporate world towards outsourcing has opened up opportunities for such people to start consultancy businesses, which is the reason consultancy is a multi-billion dollar industry today.

As you ponder becoming your own boss, I encourage you to look inward first before you look around you. If you build a business based on your natural talents and hobbies, you will enjoy what you do. If you copy businesses you see other people running, you may make money as well, but you may not enjoy what you do. Remember that you are unique, so find out your special talent or hobby first. Also assess your special skills and knowledge which you can build a business upon.

As I have highlighted in a previous article, the Government plans to encourage as many people as possible to become self-employed and run their own businesses under Vision 2050. Training in business start-up is essential. Such training should start by getting trainees to discover their talents, hobbies and skills.