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One great buisness or 100 good ones?

Discussion in 'General Business and Entrepreneurship' started by Isaac Kieffer, Apr 22, 2016.

  1. Isaac Kieffer

    Isaac Kieffer Entrepreneur

    When talking about starting a business which would be more financially smart? To go for 1 great business that you build to be the next best thing? Or 100 good businesses that you can build and sell. My goal would be to become a venture capitalist! Would I have better chances creating small businesses and selling them as I go, or build a great business and sell it? When looking at the worlds billionaires you see people like Elon Musk or Mark Zuckerberg who create a life changing business then moved on. Then you see Donald trump who invested and diversified. What is the difference between the two and which has better odds?

  2. bob1978

    bob1978 Entrepreneur

    Thing is, you'd have to know whether you're starting a good business or a great one. Question is, can you? Not just talking about potential here, because every business has potential. A good number of business owners probably had dreams that their business would one day be a great one. I'd wager than unless one invests heavily into their idea (monetarily speaking) and it succeeds wildly, most wouldn't have a clue whether the business is a good or great one. There's always something that holds them back that prevents them from knowing for sure.

    But let's say you're able to tell the difference between both, and you choose building and selling 100 businesses instead. Would that actually be possible? Can you actually build 100 successful businesses that make money, and sell them off for profit? Lots of folks have tried, but many have failed. You'd first have to find gaps in the market, then you'd have to build something to satisfy that gap, and then you'd have to somehow make money off of it for the business to survive. There's a lot of moving parts there, some of which aren't repeatable for other businesses. Are you confident you can accomplish this?

    Being financially smart isn't about the number of businesses one starts, it isn't even about how great the business idea is. It's about minimizing risk. You accomplish this by doing thorough research about every aspect of the business - the customers, the solution, the profitability, the maximum market size it can support, and so on. If it still looks good at the end of the day, you can try to accomplish what you've set out to do in the business plan, to see if it works. Whether or not it's successful depends on a whole range of factors. Whether customers accepts it, whether the solution works, how the competition will react, how well the owner/leader manages the business, and so on. Past that point, then sure, we can talk about concepts of one or a hundred businesses, and whether it's a good or great company.

    As for the odds of it working out, I'd say trying multiple businesses has better edge. You're trying different industries out, you're doing broad research into different markets, you're connecting with more people, you're offering different solutions. One of them is bound to be a better fit of your capabilities and resources. Whether it's good or great however, that's a big question mark.
    Isaac Kieffer likes this.
  3. T J Tutor

    T J Tutor Administrator Entrepreneur

    Great businesses are usually the result of entrepreneurs with their fingers in a lot of pies. They don't generally focus 100% on a single business, even after they have one soaring to success. Read the portfolios of Zuckerberg, Musk, Gates, Jobs, et al, and you will see that they have all been quite diversified from the beginning. Most of us just don't happen to hear about their other exploits of successes and failures until we go searching for them. Try searching for their past business ideas, both successes and failures and you will see that none of them ever had all of their apples in one cart.
    Isaac Kieffer likes this.

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