From hotel worker to start up CEO
An idea that just sits there is worthless. But an idea that moves and grows and infects everyone it touches… that’s an ideavirus.
– Seth Godin, Idea Virus
Everything starts with an idea. Good or bad, it is the catalyst in any venture moving forward. Just like the thousands of businesses before, my business started with an idea while on a walk.
But I am getting ahead of myself. First, a quick background check to give you a sense of where I am coming from.
My most recent career path has taken me into the world of hotels, with a focus on revenue management (controlling rates) and participating in the development of marketing and business plans to continue moving the two hotels I worked for forward. After two years as a manager and building the revenues to a level just shy of $5 million, I left to move to the sunny interior of British Columbia to start a family. At the time of that decision, my girlfriend and I were unaware of what the employment situation was like there. Needless to say, it sucks. Big time.
After a year of living here and no good job opportunities arising, I was taking a walk with my daughter in November when I started to think about what to do. Do I take a few crappy jobs to bring in any amount of money, or do I hold off in hopes of something better, or do something else?
At this time, I had been reading several other blogs about freelancing and entrepreneurship – mainly to do with making money online. I thought about getting into the various ways of making money online, but my skill set does not align very well with that kind of work. There were several who were running consulting agencies and other small businesses, however, which appealed to me. I was at a loss of which direction to take with it though. I had several ideas running through my head based on my current skill set: I could help people with their computers and other tech products they own; be a freelance copywriter on eLance or Odesk; help local businesses with their websites or social media; do extra work for hotels; or be a virtual assistant for several people.
A few weeks after that initial seed planting, my family were starting to explore the idea of purchasing a motel to operate. I started digging into the financial information to build a model of what the future may look like for the operation, started developing a rough business plan, and everything that would need to be done with the current building and business. That venture fell through for us. It did help me start formalizing a plan of what shape my consulting agency would look like.
That takes me into the New Year, which is when the action started to happen. My idea started to change.
Improve, Don’t Move
The hardest part of earning more money is finding a profitable idea.
In January, three things happened that made the sparks start flying for my idea.
First, was a mini-course Ramit Sethi (a key influencer of mine) produced on his website, Earn1K, which was designed to help people find that first profitable idea. I will write more about this in later.
Second, my former employer contacted me to see if I would be interested in consulting for them to help them improve their operations. My first client before I officially setup a business. Surely, that is a sign not to be ignored.
Third, I immersed myself into some key books to help me start adapting a better business mindset. REWORK (by Jason Fried and David Hansson of 37 Signals), and Linchpin, by Seth Godin. These two books have been truly inspirational for me in developing my idea further and making it work.
A Profitable Idea
The biggest question I had with my idea (and I’m sure most people have) is: Will anyone pay for my product or services?
Ramit Sethi provided a few exercises to first improve the idea, and to test it out. To improve an idea meant to narrow it down to the niche level, by using the two qualifier method:
[Qualifier 1] – [Qualifier 2] who need (Your Service).
The qualifiers are for demographics, geography, business type, and so forth. An example he provides is: Bloggers with 1,000 to 5,000 subscribers who want to develop information products.
Ramit’s focus for his course is people who want to earn an additional $1,000 on the side of their current job. You can see how his qualifiers come into play here: Currently employed people who want to earn $1,000 more but need Ramit’s course to help them reach that goal. He was very specific when he said $1,000. Not more, not less.
I decided to take the same approach to my business idea. Earning an income in the $2,000-3,000 range would allow me to live comfortably and cover all my costs. It would be a great start, at the very least.
To narrow my idea, I started to think more about who would actually hire me – in other words, who could I help more?
The are many large hotels and resorts in my surrounding area who have longstanding histories and connections. I interviewed with several of them, so I knew that their management teams had been in place for a while and had internal solutions to a lot of their problems. They wouldn’t be looking to hire one person to help redevelop a website and strategize about revenue enhancement ideas.
The smaller motel operations, like the operation my family had looked into, would be the right group of people I could help. Most are living in isolated communities and rely on random highway traffic or acts of nature (like an avalanche) that forced people to stay in town. They are unaware of what role social media could play in their operations, have dated websites, and some do no sales or marketing at all. A small investment into my services could easily add 10-15% to their bottom line, whereas my services at a larger hotel could maybe manage 1% due to their larger budgets.
My Qualifiers are: Small motel operations of under 35 rooms in southern British Columbia who need to earn more market share and revenue.
The second part of improving upon the idea is to test it out. This was partially answered when my previous employer contracted me. That wasn’t enough for me, so I decided to ask a few more people in the hospitality industry – both people that were currently working in the industry, and another hospitality consultant in my own province. All the answers provided told me that I was heading in the right direction. I was extremely pleased that the hospitality agent took the time to respond to me about it, because I was worried that I was treading on his turf.
I am feeling good about this idea of consulting for smaller motel and hotel operations. I decided to do some general market research to figure out how many motel operations there were in my surrounding area, as well as, if there was any competition. There are over 2,000 motels listed for my province, nearly half were small to medium-sized operations. The competition that exists focuses on the larger half of medium-sized hotels up to the larger resorts, so there is room for me to slot in there and to grow with time.
The Core Ideas
For people looking to start a business of any size, here are the questions that I started with and I hope you will be able to use them, as well:
- Brainstorm and mind-map your skills and main knowledge bases (be specific, look at your previous positions and also at what you enjoy doing)
- Write out 5 ideas that you are interested in pursuing.
- Ask yourself whether those ideas align with your skills and knowledge.
- Take the ideas that do align with your skills and knowledge and narrow them down using a Two Qualifier Method.
- Test the idea out by researching the competition in that area, post ads on Craigslist, or use the Google Key Word tool to see if people are searching for that product already.
I want to provide at least one or two tools for new entrepreneurs to use in forming their business idea in each of my posts. For this one, I will focus on the idea generation:
Google Keyword Tool: Most have heard of this, but it was essential in me discovering an area to focus on. I played around with certain search terms to make sure there were no searches exceeding 1,000 times – I wanted to stay narrow and small, not get overwhelmed answering inquiries.
MindMeister: I tend to brainstorm on paper first, and then transition the thoughts into a mind map to help me stay organized. I’ve been exploring MindMeister and finding its services suit my purposes. Here is an example business plan. There are plenty of other options, however, so please suggest your favourites in the comments.
Apart from Ramit Sethi, I am going to suggest Seth Godin. A favourite of The Big Red Tomato (sign up for the newsletter to get the Idea Virus free), Seth Godin has been inspiring me for the past year in various ways. My current favourite is Linchpin, which helped me discover my true artist within me and how indispensable I can be for a company. It steered me in the direction of helping many businesses, rather than limiting myself to only one.
The Next Steps
Now that I have a solid idea in place for my target market, the next steps I am going to be taking are to develop the services I plan on selling. After my initial brainstorming session about the number of ways I could add value to a motel operation, I had a list of items that was too long. I am in the process of narrowing those ideas down into four core pillars that will become the base for the services I plan on providing. In next month’s post, I want to share that procedure a bit and why I think it is important to have a strong product/service to sell before creating the website. I also hope to have the website operational, and start exploring the idea of legalizing the business.
This is a guest post by Canadian based James McCullough from foursides.ca. Faced with the prospect of long term unemployment in a difficult job market, or providing for his family, James has taken the leap into entrepreneurship. Starting today, James shares his monthly diary of his quest to be a business owner and start up CEO, the ups and the downs.
Please share your thoughts or encouragement in the comments section below.
If you’d like to guest post for BRT you can check out our guest post guidelines.