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The Entrepreneur Dilemma

In his recent book From Zero to One, legendary entrepreneur and investor Peter Thiel argues that businesses that have the best chance of success are those with zero competition. This may be because the business has a unique idea or technology, or because it has simply wiped out the competition – it really doesn’t matter which.

Of course this insight is self evidently true. If you have a unique service or product offering that people want to buy, then surely the only things stopping you would be lack of money, or just incompetence.

Sir John Harvey Jones the ex ICI boss and the first BBC Troubleshooter used to say “find a niche and dominate it”, surely this is close to the same thing.

What hope is there, therefore, for the carpenter who wants to start making chairs, or the Electrician who wants to start a new business? Surely there is no hope unless your offering is revolutionary in some way  – frankly why bother?

This whole mentality of course makes little sense in the everyday world where sometimes the creation of carpentry, or electrical businesses are every bit as much about need as aspiration. A niche, or unique offering can be as much about style as substance. While the average bottom is getting progressively larger, the general principle of a chair remains the same – although the style, the materials and the combination of the two still present seemingly infinite possibilities for variety.

Similarly, new ways of living seem to present many new opportunities for electrical business in the area of smarthomes, the passivhaus or even just networking.  It can often be just the way in which the service delivery is undertaken and offering real care and consideration to the customer as opposed to just wading in with two feet first.

Cavemen Entrepreneur Re-inventing WheelIf we regard the true entrepreneur as a wealth creator,  a value adder and someone truly able to make a business grow to its fullest potential perhaps it does not matter what the seed idea is at all, but the way in which it is realised.

Surely true entrepreneurial insight and skills applied to just about any business area can find value and opportunity if there is any there to be had at all.

This has to be true as we see it time and time again with new entrants into markets which seem to be beyond mature. Who would have thought supermarkets could be re-imagined before Aldi and Lidl came on the scene?

For the true entrepreneur looking to make a start in, or even disrupt, an existing market, the dilemma is whether to start from scratch with a new business (green field site), or take an existing business and re-work, or re-imagine it (brownfield site).

Building on a green field site seems so attractive, offering the clarity of a new piece of land with no history, or any of the baggage that might come with that. However, in building on a new piece of land you will have to have services put in, perhaps with a connecting road, and there may be lots of local knowledge that you may not have and which may cause problems and create time delays that risk the killing off of the project all together.

With a brown field site, there will be historical baggage and you may have to tear down old buildings, but the chances are that all of the services you will need will be in place and it is much easier to find out information about things that physically exist.

With a brand new business almost everything has to be created from scratch, even the people who will do the work will have to be recruited with all of the risks that will entail. The journey from zero to profitable sales, or even to some sales, may be much longer than projected and when the money runs out – the road may suddenly come to an end.

With an existing business you may be buying some entrenched thinking and the risk of a past bad reputation, but the road to income will already be clear – the records will be available. You will also have in the team that comes with the business expertise on both the market and the existing customers that will be the proving ground of any new offering you may be planning to make.  This may present, in the final analysis, the lower risk option of the two.

Often the reason for not opting for the brown field option is cost. Starting from scratch can often be achieved very cheaply – at least in the early stages. However, what is often missed is the total cost to get to the point at which the newly imagined business is fully established – even if the new business is as radically different from the original as is possible to imagine.

WPP the international marketing business started life as Wire and Plastic Products Plc and was re-purposed as a worldwide marketing services company in just 3 years.

Here at A2Z Business Brokers we are offering brown field sites, but the opportunities they present to the imaginative entrepreneur are as fresh and full of potential as any green field site – without the uncertainty and unquantifiable risks.

If you are that imaginative entrepreneur and want to see just where the opportunities lie – take a look at our business for sale listings.

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A 2 Z Business Brokers Ltd
Suite A01, The Long Lodge,
265-269 Kingston Road, Wimbledon,
LONDON, SW19 3NW

Tel: +44(0)208 819 3538

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