businesscareerseducation

60: How to Get a Profitable Business Idea: 4 Steps to Creating a Great Business

About this Episode

Billy Murphy is an ex-professional poker player, entrepreneur, blogger and business coach. He’s the founder of foreverjobless.com, a blog for entrepreneurs.

In today’s show, Billy shares some brilliant ideas for any author, entrepreneur or artist who wants to create a profitable business and avoid one of the biggest mistakes for a startup: starting a business that has no hope of profitability.

Getting Started in Business

Billy started playing poker online in college. He didn’t have a credit card when he started so his roommate deposited $50 in a poker room for him.

He started playing at the penny tables. He didn’t make any real money at the beginning but he did learn how to play. When Billy heard that people were making a living playing poker online he decided to go all in and figure out how to do it for himself.

Billy hired 2 poker coaches and learned how to make a living playing poker.

He played poker online professionally for four years. Online poker was never his long-term plan. It was just a way to make good money easily from home.

He knew if he wanted to create some serious success in life, he had to invest his money wisely in business.

So he began investing in online businesses in 2009, and then started foreverjobless.com in 2011.

How to Find a Great Business Idea

The way Billy became successful in poker is the way anyone become successful in business too.

You become interested in an opportunity.
You experiment with the opportunity you’re interested in.
You hire a coach or find a mentor who has achieved the success that you want to achieve. They can guide you down a proven path of success.
You take what the coach teaches and apply it to your own life to achieve your own brand of success.

Everyone starts out at zero in business. You learn as you go. You succeed the fastest when you find mentors who can show you a proven path to success.

“We all stand on the shoulders of giants. All the people who came before us did the hard work. There’s no good reason to go into a new job or calling and try to reinvent the wheel. It’s insane.” – Tom Corson Knowles

Manage Your Business Risk

Billy now helps people start profitable online businesses with his online business incubator program.

The foundation of that program is Billy’s four step process for evaluating profitable online business opportunities.

Billy’s philosophy is that you should know whether your business is going to succeed before you start investing time and money into it.

And if you’re not 100% sure the business is going to succeed, the business should have a sufficient expected value that it’s worth taking the risk.

Expected value is a poker term. It’s the value of a decision over the long term.

For example, if Billy bet me $100 that flipping a penny would result in the penny landing on heads, and I bet him $100 that the result would be that the penny landed on tales, over the long run the expected value of that bet for both of us is zero because a penny will land on heads or tails 50% of the time, over the long run.

In business or life or anything else there’s an expected value to every business decision you make. The key is to figure out the expected value before you invest significant time and money into a business. You want to make sure that the business opportunity you’re pursuing is in line with your business, income and life goals.

It’s always important to have the best idea of the expected value of your business you can before you commit time and money to bringing the business into the world.

It becomes especially important when you invest large amounts of money in a business opportunity.

4 Steps to Create a Profitable Business Idea

There are 4 steps you need to go through to start a profitable business.

1. The Idea Phase

This is where you come up with your business ideas, do your market research and find the right opportunity that the market actually wants.

It’s also important during this phase that you identify gaps in the market and work to fill those gaps. You don’t want to start a carbon copy business. You want to stand out from the crowd, not just be another member of it.

Having a carbon copy business is one of the most common reasons online businesses fail.

Be different or unique in some way that’s important to your customers.

2) The Marketing Phase

This is where you figure out exactly how you are going to reach your audience and grow your customer base from day 1.

If you don’t know how to do marketing or don’t think you can market your idea, it’s best to try to find somebody else who can help you with the marketing or move on.

3) Due Diligence

In the third phase of Billy’s system he asks the following questions:

Who are my competitors?
What can I do better than them?
Can I reach my audience the same way they are reaching theirs?
What are their traffic sources?
And what percentage of their sales does each of those traffic sources account for?

This is where you do some serious detailed research on what the competition is doing, how you can do it better, where mistakes are being made, and what core product features and service features you may want to model to make your customers happy.

You’ll also find out exactly how much your competitors are earning, and where those profits are coming from so that you can make sure you have the right distribution strategy for success.

Competitors are a great thing. They’ve already done the hard work of showing you that your product is viable.

You just have to figure out how to set yourself apart from them and serve your customers to the best of your ability.

4. Predict Your Profits

This is where you calculate the Expected Value of your business now that you have all the data.

You’re not trying to get an exact figure here (as all predictions are inherently flawed), but you want to get a range of revenues and profits on the high end and on the low end, so that if you choose to pursue the idea, you’ll have a good idea of what your profit potential is before working your butt off to make it happen.

It’s important at the beginning of this process to have an idea of how much money you want your business to generate for you.

You want to have an income goal in mind as you begin this process so that by the time you reach step four you can decide whether the business opportunity you are pursuing is worth your time and money.

Too often people waste time and money pursuing a business opportunity that won’t help them achieve their goals.

Mistakes are okay. We all learn from our mistakes. But if at the end of this process you have a business that will doesn’t meet your financial goals, you’ll never get your time back.

Business Success Stories

Billy’s online business incubator just started a couple months ago. And it already has several successful students.

There are students doing service businesses.
There are students doing product based businesses.
One student just launched his product based business this month and he’s going to make between $4000 and $5000 on the first month.

Those are the type of results you can expect when you go through Billy’s four step online business opportunity evaluation process. When you think through the business logically and launch your business with a plan you can be successful very quickly.

When you join Billy’s business incubator he helps you go through the steps of evaluating your idea (or helps you come up with ideas that could work for you) using his four step process.

His business incubator is a practical business school.

When I went through the entrepreneurial program at Indiana University only one of my instructors was an actual business person. All the other instructors were academics who were teaching entrepreneurial theory. Billy teaches you what actually works in the real world.

“Anytime I take advice from somebody who hasn’t been there I don’t do very well because the advice isn’t coming from someone who built the roadmap. With poker, with business, with fitness stuff I hired someone who had already been there. It made my life a lot easier.” – Billy Murphy

The most successful entrepreneurs look at expenditures as investments.

All that really matters is how much value you can create in your business in relation to the time and money you’re spending.

How to Create Massive Value in Business

The best way to create massive value for your audience is to do your market research. You want to identify the gaps in the market that will allow you to do something different and appeal to customers that’s unique and helps you stand out from the crowd.

Filling a gap of demand in the marketplace is one of the fastest most surefire ways to become successful online.

When Billy launched his blog foreverjobless.com he looked at over 500 blogs and realized none of them had really long in-depth blog posts.

He decided he could fill that gap and be the blogger who wrote really long in-depth blog post about entrepreneurship. Billy’s goal with foreverjobless.com is to put content out for free that other people charge for.

It’s that commitment to excellence that has set Billy apart from the crowd and helped him build a platform of thousands of followers.

Billy’s goal is to be the number one writer on the topics he writes about.

When you go to foreverjobless.com you immediately see that his blog is different. He has one blog posts that are over 8000 words long.

The main focus of his blog are his readers. He is writing his blog to add value to their lives.

“Most people go into business thinking what the business can do for them. That’s backwards. If you go into business asking yourself how can I be the best at whatever your trying to solve, as a byproduct it will be really easy for you to do very well because you’ll be number one to that person.” – Billy Murphy

Focus on Making Your Customers Happy

Billy writes for his readers. He doesn’t write for Google or search engine optimization. After he launched his blog, he had 1000 subscribers the first month simply because he had no competition when he decided to start that blog.

Billy writes for entrepreneurs who are where he was 5 or 10 years ago. He is writing on the subjects that he wishes he knew more about when he started.

One way to guarantee your success is to provide more value than anyone else in your market. When you provide more value than anyone else in your market customers can’t help but find you, and they will give you money in return for the value you offer to their lives.

When Billy started his podcast he looked at the market again and found that no one was doing a short bite-size tips type podcast. So that’s what he decided to do.

The key to growing your platform rapidly is to study the market that you wish to enter, identify the gaps in the market, and fill those gaps to serve the customers who aren’t currently being served.