When searching for something to build a business around, don’t forget your early training.

Maybe you trained in a trade or service before abandoning it for something else. Either you were bored by your employment or you were offered an appealing way out.

However, when it comes to starting your own business you need to be master of your craft. What seems exciting in the mind’s eye, may not be at all feasible when you and you alone have to make it work and earn revenues.

Here’s a good example of that. Over at Syntagma, there’s a piece by John Evans on how Google’s attempts to knock competitor’s advertising off many websites, set his mind pointing back to early training.

I’ve been writing about my interest in the economics of the retail sector for a year without very much happening. Now the long-gestated project is beginning to come to life thanks to our contacts with a number of specialist retail analysts …

The idea goes back to my initial training in information science at the Central Office of Information in London.

Read Syntagma moves into specialist information products here.

Sir Ronald Cohen is reported to be a close friend of new British Prime Minister, Gordon Brown, and a donor to the Labour party.

Cohen is the founder of a private equity company, Apax Partners, and has just written an interesting book covering his business activities and philosophy : The Second Bounce Of The Ball: Turning Risk Into Opportunity.

Gems of wisdom from the book include,

“Start young, think big and stick with it.”

“Seek out uncertainties. Risk is where the money is.”

So, if you like excitement mixed in with your business dealings, pre-order the book now.

A New Series on Business Startups — Part 11

Many startups plunge into the marketplace on a wing and a prayer. The young, inexperienced hopefuls have great expectations, but little knowledge of the complexities of the business they are getting in to.

The problem with this approach is that, except in rare instances, the new entrepreneurs will be forced into mimicking what’s already out there, including their main competitors. They will be competing directly with hard-bitten professionals and mature operations. They don’t stand a chance.

One way round this head-to-head gambit is to set up the enterprise initially as a hobby project, rather than a registered business.

The advantages of this alternative approach are many:

* You can win your spurs without too much financial drain or loss of face.
* You can gain expertise by copying the market leaders with little comeback.
* You can mature in the job and branch out from your competitors.
* You can gain respect in the market before making big investments.

This path is especially easy on the internet because entry costs are so small. Syntagma Media was started in this way, first as a tentative hobbyish project to test the waters, then as a semi-commercial enterprise with all profits reinvested for growth. Finally, as a registered business earning good returns for its owner.

Where entry costs are low, it’s always best to reach the comfort zone before fully committing yourself to a real business with all its overheads and legal headaches.

After all, you may not like it once you’ve tried it out for yourself.

A New Series on Business Startups — Part 9

Many people dream of quitting their day job and starting their own business on the internet. It seems simple enough, doesn’t it : working from home, low costs and boss of your own time?

But what about the technical side, the long lead-in to a decent income, and the flakiness of many internet projects?

John Evans, boss of Syntagma Media, has given an interview about the trials of creating an online content business to Gerry Reynolds, business consultant and retail analyst.

Here’s a preview :

Gerry : What are the economics of an online income stream? [...]

John : If you set no upper limits, you’re really at the mercy of events. It’s no good having a $10m business if your costs are $11m. Mr Micawber defined that problem 150 years ago.

The trick is to set an upper boundary that gives you the best split between receipts and obligations, building in the vagaries of the tax system, of course, and depending on the amount of effort you can comfortably provide. Everyone will reach a different conclusion, but it has to be within your comfort zone. You are, after all, in this for the long haul.

Gerry : So you’ll not be selling the business?

John : I’ve personalized the business so much, it’s hard to see who would buy it now. But the idea of creating an empty shell of a company, with no branding, so that anyone can buy it, just isn’t how I do things. I’ve always preferred chocolates to boxes.

Read both posts here : #