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The Best Business Opportunity Can Be the One You Don’t Take

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I was recently approached by another blogger and internet marketer about launching a joint venture. The idea behind it was great and I could tell by his enthusiasm and my initial enthusiasm that we were on to something that could turn out to be very special.

There were few, if any barriers to entry. All we needed to do was buy a domain, start a blog, and market it. But the more I looked into the opportunity, the more I realized that while this idea had merit and could potentially do very well, everything didn’t add up.

Analyzing a business opportunity with a  SWOT Analysis

A SWOT anaylsis is a way to perform a strategic business analysis. It stands for Strengths, Weakness, Opportunities, and Threats. To do a SWOT analysis, you make a quadrant on a sheet of paper and brainstorm all the possibilities for each of the four categories.

For this opportunity I came up with this SWOT Analysis (My SWOT was actually longer, I only used top level results as examples):

  • Strengths: Excellent idea in an under served market; there is a need for this type of website.
  • Weaknesses: No business plan in place; we have knowledge, but are not experts in niche.
  • Opportunities: Possibility to establish an authority site in the niche.
  • Threats: We aren’t experts in the niche, so it may be easy for an expert to surpass us.

A SWOT Analysis can be applied to many situations, including your business, career, educational opportunities, and even your personal finances. Personal finance example of SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats.

Other factors to consider along with SWOT Analysis

Is there a market for the business? This was one of the biggest strengths to the idea. We both strongly believed there is a market for this type of site. Neither one of us have found a good example of what we had in mind. The opportunity is rich for someone to create an authority site in this niche.

Have a strong business plan in place. As I mentioned, the idea behind the site was excellent. But as we discussed the details of how it would be run and what each person would be responsible for, I came to the realization that a good idea does not equal a good business plan.

We had a good understanding of who would use the website and how it would be used, and we knew how we could make money from the website, but we did not have a clear understanding of each person’s responsibilities. Before long, it became evident to me that while the other party brought the initial idea to the table, I was going to have to do the bulk of the legwork.

Know your strengths and weaknesses. I have a good understanding of what my strengths and weaknesses are related to the internet and blogging, and after talking to the other person and examining his work (which is very good by the way), I realized that too many of our strengths and weaknesses were aligned. Most business partnerships work out better when each partner brings a separate set of skills to the table. But our skills were very similar and we were deficient in several places – potentially creating a weakness to the business.

Don’t spread yourself too thin. This was the biggest hindrance for me. I currently run this website and several others, and I have a full time day job. I love running my websites, but with my current obligations and a baby on the way, I simply don’t have time to take on another project – even though this one has merit.

Recognizing when to pass on an opportunity

This was one of those times that I felt it was best to take a rain check on this opportunity. I believe we could pull it off if we both had the time in our schedules, some solid preparation time, and a strong business plan. But right now those things didn’t line up just right. This is a great idea and opportunity, it’s just not the right time.


Published or updated February 24, 2010.
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{ 14 comments… read them below or add one }

1 Money Beagle

Back around college, I jumped into three ventures that I wish I had through through with this. None of them ever got off the ground so they didn’t cost very much money, but it was still significant time and some money spent that was wasted. I’ve actually been approached on a couple of other occasions where I’ve passed, after doing an analysis similar to what you posted.

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2 My Journey

Wow great explanation! Why not run with a similar idea?

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3 Ryan

My Journey: The idea was good enough to work, but I’m not in a position where I can take advantage of it right now. I don’t have the time to devote to it without my current projects suffering.

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4 Wealth Pilgrim

Really nicely done. I haven’t jumped into too many businesses in my life but I am being presented some opportunities now. Thanks for a great tool to evaluate them with.

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5 Craig

A lot of ideas sound great until you realize what actually goes into making it work. If you can make it work, great. But too many times people rush into things (not just work related) without fully taking the time to plan, research and figure out if it’s a good idea or not. Nice post.

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6 Will

This is sound advice. I jumped into a business idea which sounded good but we had not researched it fully enough. I pulled out before I went bankrupt and I am still suffering the financial consequences of it. I wished I had done far more research into the niche before jumping in. The business was the only one doing it and we thought we had a good opportunity to make it work. My business partners are still hanging on in there with the business but they are only hanging on with their finger nails.

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7 MLR

Right now I am looking at starting a B&M business.

The analysis is the same, the investment is usually more, and often times people still don’t do a SWOT analysis. I don’t get it :/

I feel like I am back in school… all of this business plan writing and analysis. Neighborhood council meetings. Zoning board meetings. Ugh.

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8 Ryan

MLR: But the work will be well worth it if you decide to go through everything. Think about how complicated things are now, then imagine they would be infinitely worse if you didn’t do as much planning!

I hope it works out well for you! :-)

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9 Ben

nice analysis. Spreading myself too thin is one of my biggest weaknesses, I’m constantly having to ask myself if I need to refocus on my core projects.

Plus now that you’re having a kid, there will soon be less of your time to spread around :)

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10 Miss M

I’m amazed you can keep up with several sites, I have a hard enough time keeping up with one blog. I’ve let another die off, I didn’t have the time to devote to it and it wasn’t as aligned with my personal goals. Sometimes the weakness can be a personal one like lack of time to make it a success.

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11 Ryan

Miss M: It’s a struggle! CML is my main site, and gets most of my attention. The others I manage get updated much less frequently, and as a result have less quality content, lower traffic, and earn less money. But I keep them going!

One of the big road blocks in this case was the time issue. I simply can’t add new projects right now.

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12 anon

What was the idea? weighting out the opportunity cost is another thing I use to determine if a venture is worth it or not.

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13 Ryan

I’m keeping the idea on the back burner for now. :-)

Opportunity cost is an important consideration, and I would have had to stop working on my current sites to have the time to create the new venture, which was not an option.

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14 DDFD at DivorcedDadFrugalDad

Two thoughts:
1) It pays to look before you leap and
2) You have to say “No” to the iffy– so you can say “Yes” to the winners.

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