Contrary to popular belief, not all businesses are the same: some are just not worth pursuing.
They may make you a lot of money, but they end up trapping you in a viscous cycle like a job.
How can we make sure we start the right business type; by following these 5 commandments:
The Commandment of Control: you have complete control over all aspects of the business.
The Commandment of Entry: there is a high barrier to entry/less competition in your niche.
The Commandment of Need: your business must solve a real problem differently to others.
The Commandment of Time: your business must not be attached to your time like a job.
The Commandment of Scale: your business must not be restricted to a geographical area.
In this blog, I talk about the 5 commandments of starting a business and give some examples.
To find out more about these commandments, check out the book: The Millionaire Fastlane.
The Commandment of Control
The commandment of control states that you must control every aspect of your business.
This includes areas such as your brand, customer acquisition, distribution channels, cost, etc.
When you can’t change the product, pricing, etc. then you don’t have control of your business.
This may sound obvious; don’t all business owner control all aspects of their business?
Not quite: you’d be surprised how many business models don’t allow control of their business.
- If you have a franchise you’re not in control; your whole business is subject to the franchiser’s.
- If you have a YouTube channel, you’re not in control: YouTube may stop showing you to users.
- If your income comes from Google Ads you’re not in control if Google stops showing your ads.
As you can see if you can’t control every aspect of your company you are not in control of it.
However just following this commandment isn’t enough, you must follow the other ones also.
The Commandment of Entry
The commandment of entry states that there must be a high entry barrier for your business.
If anyone can start a similar business, you will experience a lot of competition in your space.
Take for example a manufacturing company; this type of business requires a lot of capital.
Factory, machinery, materials, etc. there is a lot of upfront costs in just starting this business.
Does it meet the commandment of entry – absolutely, very little people can start like this.
On the other hand let’s look at starting a YouTube channel; this business requires little capital.
All you really need is a smartphone, tripod, computer, and the internet to start your business.
Does it meet the commandment of entry – nope, which is why there are 1000s of channels.
Anyone can start a YouTube channel, which is why this is such a competitive space in business.
Just think, if you can start a business in 10 minutes, then it’s likely that anyone else can too.
The Commandment of Need
The commandment of need states that you must solve a real world problem for real people.
Not only that, but you must solve those problems in a way that’s different to everyone else.
A lot of people start a business with a solution in mind: ‘an app that helps people lose weight’.
Why is this your business idea? Have you have talked to people and they’ve asked you for it?
Unless you’ve talked to people and know there is demand for it, your business will likely fail.
Rather than asking ‘what product can I sell?’, instead ask yourself ‘what problem can I solve?’
The world doesn’t need more shiny products, it needs better solutions to existing problems.
Before starting a business, identify a reoccurring problem for people that you want to solve.
Having identified a problem, think how you can solve that problem using a product or service.
All successful companies have identified a problem, and solved it for people in a unique way.
The Commandment of Time
The commandment of time states your business must not be subject to your time, like a job.
Any company that earns income as a result of the owner working violates this commandment.
For example, say you are a doctor and you decide to leave your job to start your own practise.
Rather than seeing patients at the hospital, you’re now seeing patients all day at your practise.
This business violates the commandment of time – as your income is tied to your actual time.
To escape this, you could hire doctors to see the patients, or rent out your practise to doctors.
This frees up your time to focus on growing the business, without it affecting your income.
You could also create a product to sell; create it once, and sell it forever, even while you sleep.
This breaks the time for money cycle: it is tied to how many you sell, not how long you work.
Business owners need to be able to put a lot of time in at the start, and work less over time.
The Commandment of Scale
The commandment of scale states that you must not be restricted to a small pool of users.
In order to succeed, your business must be accessible to customers from all over the world.
For example, let’s say that you write a book, as you want to meet the commandment of time.
However, you then decide to only sell your book in your local bookstore, in your local town.
This violates the commandment of scale: your book is only available to a small pool of users.
To meet the commandment of scale you book must be accessible to users all over the world.
The best way to do that would be to sell your book online, through services such as Amazon.
(Although that violates the commandment of control – that’s a conversation for another day.)
The same goes for any business that has a physical presence; you’re restricted in your traffic.
That’s not to say you shouldn’t have a store, just make sure to have an online presence also.
So make sure you have considered these 5 commandments of starting a successful business.
To find out more about these 5 commandments, check out the book The Millionaire Fastlane.
In this book, the author talks about he followed these 5 commandments and retired early.
Are you following these 5 commandments for business? Please share in the comments below.
If you want to find out more about entrepreneurship, you can find more of my blog articles here.
