How to analyze a business idea in 5 minutes or less

Before we jump in:

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  1. Real estate project
  2. Investment Firm
  3. Residential contractor
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How to analyze a business opportunity in 5 minutes:

My friend in Athens told me recently that he wanted to start a house painting business.

We were sitting on my back deck on a Saturday at about 4pm. He asked me what I thought. I went to work.

I typed “House Painting” into Google Maps on my phone.

10 results popped up nearby.

I hit “call” on the first one. A guy answered on the second ring. He was nice. He told me he could come to my house anytime on Sunday or Monday to give me a quote. He could have a crew available right away.

I hung up and dialed another one. No answer.

A third one answered on first ring. Very nice. Wanted to take down my info right away. A trained salesperson. I deflected the question and asked how far out he was booked up. He said he could have a crew ready for me on Monday.

The 4th call also answered. At 4pm on a Saturday. He could also stop by for a quote on Sunday morning after I asked. I thanked him and hung up.

This was a terrible business opportunity. Of the 4 house painters I called outside of business hours 3 of them answered and had immediate availability. That means there isn’t much work and I’m sure they are very competitive on price.

You can run this experiment on any business.

Power washing. Call around for a quote. Tree removal. Call around for a quote and ask the owner about availability.

If nobody answers the phone that is a good thing. Business owners are less likely to answer the phone when they are booked out 3 weeks and overloaded with work.

It is a great way to cross off a lot of opportunities. You don’t want to compete against eager, hungry operators. You want to compete against folks who are overloaded with work. Simple.

So next time you have a business idea stop wasting your time. Stop working on your business plan. Don’t take the franchise meeting.

Simply call around and get a feel for the market. It’ll tell you a LOT!

A few tweets from this week:

Onward and upward,

Nick Huber

Before we go:

Titan Risk, an insurance company that I am a customer of and an investor in, hired a business insurance specialist.

If you run a business and you are unhappy with your premiums, coverage or service – reach out to Titan or respond to this email and I can make a personal introduction.

We’d love an opportunity to earn your business.

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.