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Welcome back to Problems to Profit. I am excited to bring you another exciting episode. This one is going to be titled if I started a business in 2025, here's the three types of businesses I'd start, which is a line of clickbait bullshit. And anytime you see clickbait bullshit, remember, bait is for the fish. And you don't want to be the fish, you want to be the fisherman. That's what business is all about. Now I'm not going to go into three types of businesses I'd start because really what matters probably most in starting a business is are you going to be passionate about it. Like the idea of a business is to create a vehicle, something that makes it easier for you to enjoy life. It's a financial vehicle. You could walk to the store or you can drive to the store. When you drive to the store, it's a more efficient process. There's a vehicle involved. Business is the financial vehicle. When you set it up, that makes your life better. So rather than giving you three types of businesses I'd start, I will give you maybe some questions to ask to figure out what type of business you should start and if it's aligned with the time for you to start it. So one, first thing, are you passionate about it when you build this vehicle? Because you don't go to a business dealership and buy a business normally. Normally you build the business. So it's kind of like if you wanted the car, you got to build it before you can drive it, right? So you're going to build the business. Is this business something you're passionate about? It's a problem you love solving, it's customer you love serving. And can you be certain that you're willing to invest the time to go all the way to build the vehicle and then drive it? Because I mean, it's a long term relationship. It's going to be like a family member in your life. So number one, passion. Number two, do you understand the economics? And not just the economics, you know, maybe going on in the world around you, but the economics of the business. What are the costs associated with acquiring the products or services? You need to be able to, you know, grow and scale and profit within this business, but you don't want to ignore the economy around you either. I like looking at, before I ever start anything, a competition study. I want to see, you know, a, how many competitors are out there, how's the lifestyle of the owners of those competitors? Like that. That'll give you a good indication of the margin and the Profitability. I mean, remember guys, luxury margins come from luxury products. And if all your competitors are making a bunch of money, that's probably an indication that there's enough margin for A you to make some mistakes in that first year or two when you're starting up, but B, that once you're done making some of the dumber mistakes or, or maybe the more immature mistakes, you have a brilliant revenue stream opportunity that's going to take you for the long haul. Okay. The other thing I like to see in the economics of the business is, is it at like I'm going to say market scale? Is this something really small scale or it's large enough scale where there are enough competitors, where you know there's a talent pool trained in the business. Like if, if you're going to be the first of a kind of business ever created in your industry, you don't have a talent pool to farm from. You can't go fishing, you can't put out that bait and catch the fish because you don't even know what the fish are going to bite on. You don't know who the fish are, you don't know where to find them, where to get them, how to train them, anything. So you're going to be pioneering a lot of processes. I like going into established, profitable areas. Like if there's an established, profitable industry where you have a large enough market where you can bring in a talent pool that after the business is just you and you're starting to build that team approach, you can hire other people to begin the process of automation. So profitability, understanding the market, understanding your competitors, knowing your suppliers, can you acquire enough different suppliers to maintain good costing, Keep the suppliers competing with one another, keep your costing low so that when you're selling to whoever your customers are that by there being many competitors, there proves there's a demand for the product that you always have a margin within. Probably the last piece that I really focus on is the exit strategies. Anytime you're going into a business, a big concern is going to be risk. Like every business is a cost benefit analysis and a risk reward analysis of is it worth it for me to commit my time, my energy, frankly my life? Cause there is no work life balance when you either start a new business or have a new baby. Like let's be real, you don't have a newborn baby and be like, hey little baby, let's, let's schedule when you're gonna take a shit and I need to change diapers. What happens in a startup business or with A brand new baby is they own your schedule. And so I wanna know that there's exit strategies. If I can make an entrance into the market, if I can build and scale a business, can I sell it to one of my competitors? Can I sell it to one of my employees? Is it something like, say, that I could piecemeal off and sell the parts of for more than what it cost me to get into? What was that statement I heard at one point at a seminar, and it was like, what's the upside? What's the downside? Can I live with the downside? And that was kind of more around investing. But I think it's relevant for business too. What's the upside of the company? What's the downside to the company? Can I live with the downside? In every business I've ever looked at, the reason I'm looking for exit strategies, and that does work for investments too, by the way, is because if I've got more than one, then I've got a security blanket around the business. And the other piece of exit strategies is it identifies that there's going to be a higher valuation on the other side. And so with that, let's jump into multiples. One of the big reasons to build a business is to have an asset, okay, an asset that's not just producing you wealth and revenue and income, but also providing higher net worth on your personal balance sheet. And the benefits of those assets is as we're aging or as our goals and priorities are changing, we can sell them. So having the knowledge of what multiple that business or industry is selling at on the market in one of the exit strategies, like whether you're, you know, going public, selling to a local competitor, whether you're doing kind of a, an M and a growth strategy, and then taking an arbitrage approach and selling however you're selling, knowing the multiples within the industry of the different businesses that make up the market that you're in is key because that's what's going to drive wealth and net worth. The single largest generators of wealth on the planet are businesses. So understanding what is your multiple is critical. And let me, let me give you an example of what a multiple is. A lot of people don't think about business. A lot of people think business is, where do I go to work? What's the job that I'm going to have? Like, job just over broke right at this business. And when you look at it that way, it becomes that it becomes your slave driver. When you look at it as an asset you own the asset, it doesn't drive you, you drive it, at least at later stages in the game. And when you're driving it, you can automate it, you can pull in talent from the market, you can turn it into a cash flowing asset that eventually has a saleable value. Right. What's the market cap? If you were to sell all the shares of that business, public or private, how much is that business going to be worth? It's the way to generate wealth, like businesses. If you go look at the, what probably largest investment, you know, arena on earth, it's probably the New York Stock Exchange. Okay. And if we go look at the New York Stock Exchange, which is arguably above 50 trillion at any one day of the week, then that's the single largest hold of wealth on the planet. Well, if we know that's where all the wealth lies, and we know that every business on the New York Stock Exchange is a business, then are you scaling this business because you want to build it up, develop it and sell it? Are you scaling this business because it's your life purpose? So not just knowing the valuation, but knowing what's your strategy of generating income and, or long term net worth and or a large exit, Almost treating a business like a flip home, like, I'm gonna put it together, I'm gonna fix it up, I'm gonna exit it with a large amount of cash, hey, maybe go take a vacation for two or three years. So rather than going in and looking for all the clickbait bullshit, if I started a new business, what would it be? I would say let's look at the idea of asking all of these different questions and trying to put all the right ingredients in to making the right decision. Because what you don't want to do is go have to start multiple businesses over and over again because you've continually failed each time. You want to put the right amount of due diligence into a business. Look at the economy around you, look at the competitors around you, look at the talent within the market around you that you can hire from to automate, look at your competitors, look at your suppliers, look at the profitability, look at the margins in the business, look at the multiples that they're scaling on, look at the different exit strategies, look at the valuations, look at all of it. But most importantly, are you passionate about it? Hopefully this adds some value to your entrepreneurship decisions in 2025. I look forward to seeing you out there. I hope you have an amazing day on purpose.