If you have a dream for the perfect business, don’t jump in just yet. There are a lot of reasons why it might be better to shelf your small business idea and copy somebody else’s instead.
So you want to be the next Facebook? Maybe the next Amazon, or Apple? Each of these businesses started off as dreams for the one or two people that thought of them. They later became a reality and today, they are three of the largest and most successful companies in existence. These companies started as small business ideas and became three names that are known by virtually everybody.
While these companies started with innovative and unheard of ideas, that doesn’t mean you should do the same thing. Although we know about these success stories, that are untold thousands of businesses who never followed the path to greatness and if we look at the odds, yours could follow the same beaten path. The sad fact is that these types of companies typically fail. In fact, 8 out of 10 will be out of business within 5 years of opening their doors.
There’s a better way to start a business: copy somebody else. Look at a company like Walmart. Walmart didn’t invent the discount shopping experience. They copied an existing business model, innovated it and turned it in to a company that ranks just as high as the three we mentioned above. What are the advantages to copying somebody else idea?
If you decide to copy a company like Estee Lauder, it only takes a Google search to find market research. Is makeup only purchased by women? When are the highest revenue producing months? What demographics purchase high end makeup? If you start a business from scratch with a brand new idea, you will have to do your own research and that costs a lot of money.
By starting a business based on your own ideas, you’re giving up the community of people who could help you during the infancy of your business. Any small business owner will tell you that the beginning stages have a lot of ups and downs, unknowns, scary times, and a lot of questions. By borrowing an existing idea, you can find support within the community of people who have already gone down your road. They are an invaluable source of wisdom during the most difficult times.
The idea that you have for something that will change the world may be a great one but taking it from an idea to an actual business will take a lot of business sense and even more important, money. Investors, either private or banks, won’t lend to you if they don’t feel comfortable and often comfort comes from experience. If you want to open a new restaurant, an investor already knows how a restaurant operates and finds comfort in that. Your pitch will use terms and imagery that every investor can identify with: the experience of dining out.
If you want to open a company that sells cars that run on residential trash, an investor won’t have the same sense of comfort since they’ve never seen it and it’s impossible to know how much demand is out there for it.
The best way to start a business is to start with an existing model and innovate. Later, once you’ve learned to play by the rules, you can start another company based on your innovative small business idea. By then, you’ll be able to finance yourself.