My take is this: “Do what you love” advice–given as a blanket statement–is completely wrong, and I have a very relevant perspective.

Once Something Becomes Work, It’s Work

It doesn’t matter what you are doing, once you are forced to do it it just becomes another job. People are terrible at predicting what will make them happy. Do you think pursuing your dream of hanging out at the gym all day playing sports will make you happy?

Wait, sorry, that’s what I did and it bombed (more on that below). In general, people have a hard time predicting what will make them happy because of what’s called impact bias — the tendency for people to overestimate the length or the intensity of future feelings.

Hobbies Don’t Make Good Businesses

When you poll a randomly sampled group of people on “what they love” most will come back with answers like: “Going to the park, playing sports, hanging out with friends, having sex, and sunsets.”

Now take a look at the list of Fortune 500 companies and let’s cross-reference their core businesses to the average person’s “what I love” list. Sure, you might love spending time on Facebook, but unless you’re a developer it’s probably not a feasible business decision.

So what’s the magic formula then, Matt? Now this is easy.

Instead Do What You’re Good At

This will afford you the most freedom and financial stability to do whatever you want. I have a unique perspective because I took the statement “Do what you love” at 100% face value. In my second year of college, after hearing this advice, I sat back and asked myself, “What do I love doing that makes me happiest, that I could turn into a career?” Got it! Open a boxing gym. I love sports and fitness and being social. It’s perfect! Eureka! A couple years later Final Round Boxing was open.

So did my hedonistic Richter scale go off the charts and did I find myself live happily ever after? Not quite. What happened? I started to hate boxing. When you become a slave to something, it doesn’t matter what it is. You’ll end up resenting and hating it most of the time.

Consider these Hygiene and Motivational Factors

Here’s a thought exercise:

Subject A is working in a field he/she doesn’t really care for — selling women’s health products. Subject B is doing something he/she “loves,” running her own yoga studio. Subject A makes a great salary (including sales bonuses), has little supervision, and flexible work hours. Subject B has to teach yoga all day, every day, and to make ends meet has to work 10-14 hour days 7 days a week. Which would you rather be?

This all comes back to what’s known as the “two factor theory,” a theory published by Fredrick Hersberg in the Harvard Business Review. In the article Hersberg reasons that there are certain factors that impact workplace satisfaction — known as ”hygiene factors.” This includes pay, hours, job security, company polices, and supervision. If those aren’t done right then you’ll be unhappy (I think everyone can agree on that).

1. Three Common Challenges Entrepreneurs Face (And How to Overcome Them)

Starting a business and becoming an entrepreneur is exciting — it is also terrifying. After you leave the safety of a full-time job, you will face several common challenges that all entrepreneurs face–chief among them instability, stress, and solitude. In my experience, I have found that embracing these struggles is the first step to overcoming them. Read more

2. Startup Panic: How to Release “Right Now” Thinking and Make Powerful Progress in Business

It’s natural for business owners to want everything done as quickly as possible, making the most of the little time that they have. While business owners should maximize their productivity and utilize their time wisely, taking your time may be the best choice for your business instead of being driven by fear and panic. Read more

3. Starting a New Business: How to Land Your First Clients

Once you’ve developed and established your startup, the next step is to find your first clients. It may be harder than it looks to land those first clients, especially when your business still has that new car smell. Consumers tend to stay with what they know and trust, and with your business being new, they may be reluctant to try what you have to offer. Here are a few tips to help you lock in your first few clients. Read more

4. Starting a Business: One Thing Every Entrepreneur Should Do Sooner Than Later

New business owners should take every chance they can to strengthen their product knowledge and gain industry exposure. As a new business owner, you may naturally lack in these areas. Attending an industry expo as soon as possible may seem risky, but is one way to network and gain industry knowledge. Read more

5. Entrepreneurship is All About (Active) Risk Management

One of the most important lessons a successful entrepreneur has learned is the ability to manage risk. The ability to manage risk is what sets an entrepreneur with an idea apart from one that actually builds a business from it. The greatest risk any startup could run into is running out of cash or available credit. Entrepreneurs should relentlessly concentrate on controlling costs and managing this risk. Read more

6. 20 Reasons Why Entrepreneurship is Awesome

Entrepreneurship is the new American (and global) dream. Everyone wants it but few are bold enough to do what it takes to make that dream a reality. At YFS Magazine we know how awesome it is to be an entrepreneur and endeavor to empower you to know the same. Read more

7. Before You Quit Your Job to Start a Business, Read This

I recently received a message from a long-time friend who launched a part-time business several years ago and is now considering making the transition to full-time entrepreneurship. I decided to take a trip down memory lane to when I launched my first successful and profitable business. This is what I told her — and what I recommend that you consider before you quit your job and start a new business. Read more

8. The Art of Starting a New Business 

Everyone has at least one idea that could be turned into a viable business. The idea sparks something inside of us and ignites this little frenzy of passion which is difficult for some to ignore. When we feel this spark start to smoulder in that passion part of our being, we do one of two things – we either act on it or we let the spark sizzle until it dies. Read more

9. Starting a Small Business? Ten Ways an Accountant Can Help 

As a budding entrepreneur, you may be an expert on the day-to-day activities that directly impact revenue. However, many fail to acknowledge the importance of financial management. An accountant acts as a financial business advisor, focusing on the financial areas you may not be knowledgeable in or have the time to commit to. Read more

10. Startup Business Planning: To Plan or Not to Plan, That is the Question 

When it comes to starting your own company, nothing is more controversial than the preparation of a business plan. Mixed reviews abound on whether to spend time writing a business plan rather than just starting the business. Like many business decisions, it depends. Read more

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Photo: Moose Knuckles

First off, the biggest difference between these two company types is in their top objectives. Small businesses are driven by profitability and stable long-term value, while startups are focused on top-end revenue and growth potential. Steve Blank (i.e. a Silicon Valley serial-entrepreneur and academician who has founded or worked within eight startup companies, four of which have gone public) shares great insight on the primary differences.

Blank suggests, “Founders wake up every morning saying, ‘I don’t just want to be self-employed, I want to take over the universe — I want to change the world; I want to do something important! This is the most exciting thing I could ever do.’ This … is the first major distinction between scalable startups in the technology cluster and small business.”

Earlier this year, I also got the opportunity to meet Mark Cuban, Kevin Plank, and Scott Case, who asked me a classic question with a special motive: “What do you want out of your life in five years?” I knew how Cuban and Plank had made eight-figure companies in their twenties, so I said, “Thirty million dollars,” thinking it would impress them. Instead, Plank said, “That’s a terrible goal!”

That remains the best piece of business advice I have ever gotten. Instead of focusing on great products and huge customer bases, I was too focused on dollar amounts — a small-business mentality instead of a startup mentality.

Consider it your roadmap towards being profitable. Before you start lining up investors, or borrowing money for startup costs, here are some tips for creating a business plan that will help you map out your entrepreneurial journey.

1. Value Proposition

What do you have to offer consumers that other companies do not? If you follow the 10 elements of a sound business plan, this should be part of your executive summary. It is important to keep in mind that your business has to serve a real need, preferably one that is not being met by many competitors. Your business will stand a much greater chance of being profitable if you can fulfill the needs of a niche market that others do not.

2. Financial Analysis

Prospective investors have every right to know how you plan to spend their money. You want to show them a model that projects profitability as early as possible. Even if you are not courting investors, you need to know how you are going to make ends meet while you are building a viable business. Be meticulous about calculating your expenses and make sure that you have a plan to cover all of them, including unforeseen expenses.

3. Documentation

If you are seeking out investors, do not just expect them to take your word for it. Even if you are funding a business by borrowing money, it is still good to have everything in writing, especially when it comes to lease proposals, material quotes and other items that you will need to start your business. Do not let a property owner or vendor promise you one thing and then change his or her terms. Get everything in writing and include it as part of your business plan.

4. Competition Analysis

Every niche has competition. You need to size up your competitors and find a way to differentiate your business. Perhaps they do not have much of a presence online and you can build your business through online marketing. Another idea may be to offer products they do not. It is critical to know who your main competitors are and how you can gain an advantage over them and claim your fair share of the market.

It doesn’t matter how original or groundbreaking your offering is; in today’s market it is the factors behind the product or service that actually matter. This may seem counterintuitive, but sometimes how you sell a great offering overpowers how great your widget is in the first place.

Recognize Profit Points

Ensuring your new launch is profitable can help you to realize future sales success.

In fact, before presenting something new to the public, ensure it is needed and will, in turn, bring in revenue. Sure. It appears to be easier said than done, but by preparing correctly for your new launch you can reap tremendous benefits.

First consider why products and services are profitable.

They are often profitable because of what is behind them, not due to the function or purpose they serve. For instance, disciplined planning and implementation of factors such as advertising, cost and price controls, and great management are all needed to roll out a new product or service.

Next, tell me what makes your company’s products and services profitable?

Consider why customers need a product or service and what it can do for them. Translate that into why customers should pay money to receive the value your company can provide. It seems like good old common sense, but it is easy to forget this important factor.

Recognizing your profit and value points makes it easier to create success strategies that work.

Another way to find the profit points in your products or services is to determine the strategic partnerships needed in order to “take flight.” Developing strategic partnerships with other companies can assist with your launch and help you maintain feasible marketing and advertising expenses. Find out your service’s points of value as soon as possible; time is not on the side of a new business venture.

Determine Revenue Models

It is vital to understand that products don’t help build companies, but revenue models do. An efficient and solid revenue model is just another step toward ensuring your company’s success. Your specific revenue model does not have to be unique or necessarily original, but its implementation should be better than the competition.

Remember the Snuggie’s success?

It might not have generated profits, as it was a completely innovative idea. Prototypes of the Snuggie were made years before the infomercial for the fleece garment was shown on television. But the Snuggie became a household name because of those infomercials, and soon, a successful product launch was underway. This product’s advertising techniques, price points, and partnerships made the product’s success possible — not the fact that the blanket had sleeves.

Prepare for Profits with Proven Tips

Prior to a new launch, think carefully about why your product or service is needed and how your company can deliver value to the public. Strategy and preparation are two critical components of ensuring revenue and a positive response. Therefore, ask yourself:

1. What is the Lifetime Customer Value?

Thinking about how the customer will perceive a product’s value is imperative in preparing for its launch. If you are selling a single product or service to each customer, you might be at a disadvantage. Instead, try to pair products and services together, and think about a long-term strategy for the products’ brands as a whole.

In a recent post entitled “One Reason Why Your Business is Not Generating [Massive] Revenues”, Tara Gentile correctly surmises that “it is easier to earn your second $50,000 than it is to earn the first $50,000.”

Slingshot Capabilities

Before an entrepreneur or small business executive can earn the first $50,000, he/she must develop what I call a “Slingshot” capability (operations excellence) and establish a brand identity.

Few people remember the days when Wal-Mart was still a startup. The Arkansas-based company avoided markets dominated by goliaths like K-Mart and Sears. During that period, Wal-Mart invested billions (as much as K-Mart made in profits) on its Slingshot advantage, a world-class inventory management system.

Once perfected, Wal-Mart had a solution that improved inventory turns twice as much as the industry average and reduced its shipping and distribution costs 200 basis points below any major competitor.

If you are launching a business and your plans don’t include the development of a Slingshot capability, you aren’t ready to leave your garage.

Brand Identity vs.  Slingshot Capabilities

Brand identity is the recognized, differentiated outward expression of your business’ products or services.

My research suggests that it takes less capital intensive service-oriented businesses (i.e., barber shops) 3 years to develop a brand identity; whereas it takes a capital intensive product-oriented business up to five years.

If it takes 3-to-5 years to build a brand and approximately the same amount of time to perfect your Slingshot capability, what should an entrepreneur do in the interim?

Fortunately, I do have a framework that provides a little more guidance than my declaration to “launch your business from your garage.”

First, Clean Out Your Garage

In a classic 2×2 matrix format, I present two questions to business owners: (1) “Does the task differentiate your business (x-axis)”; and (2) “Is the task critical to the daily delivery of your product or service (y-axis)”.

Recently, I advised a friend who felt hopelessly stuck in the process of growing his small business. As we talked over coffee, I asked him a few simple questions to help him gain more clarity about his business despite its slow take-off. Afterwards he shared with me that he walked away from our conversation with newfound focus and confidence. He now knew how to grow his small business faster.

If you find yourself in a similar scenario, here are the three questions that every entrepreneur should ask themselves to jump-start business growth:

1. What is already yielding results in your business?

The one thing your small business needs, more than anything else, is momentum. Momentum is critical for keeping your energy and spirits high as you deal with the inevitable ups and downs of building a startup.

The key to gaining momentum in business is to work smarter and identify what is already working, and then do more of that activity. Use the Pareto Principle to your advantage. This principle (also known as the 80/20 rule) states that roughly 80 percent of all effects come from only 20 percent of causes.

For example, if you look closely at your business, you will likely find that 20 percent of your marketing activities are resulting in 80 percent of your revenues. Look closer and you may find that (an estimated) 20 percent of your customers account for 80 percent of your sales.

In my friend’s case, partnerships were the biggest success factor in his company’s success. In a relatively short period of time, he had attracted some very powerful partners who were capable of delivering thousands of customers to his business. Because partnerships were already working, the conclusion was to focus more energy on cultivating relationships with existing partners, while bringing new partners on board.

2. What’s not working in your business?

Next, identify what is not producing results. Look for problem areas within your business that have caused one too many sleepless nights. Then, instead of trying to fix what is broken, stop investing your energy in that area.

This advice cuts against the grain of conventional entrepreneurial wisdom. As an entrepreneur, you have probably been told that perseverance is the key to success. While that is true, you may not have enough time or resources for unlimited spins of the wheel.

Instead, put whatever is not working on hold and focus your resources on areas that yield favorable results.

For example, my friend had been focusing all of his time and energy on search engine optimization (SEO), even though it did not immediately generate short-term revenue for his business. For that reason, I advised him to pause his focus on SEO and invest the majority of his resources into partnerships that had the potential to drive immediate revenue.

Let me shed some light on five reasons why entrepreneurship can potentially be harmful at a young age along with tips on how to minimize the downside.

1. Your school marks could suffer when you start a business.

There is absolutely zero doubt that becoming an entrepreneur will take dedication. No matter what happens, you must take care of your products, employees, and customers.

Do you have a big exam tomorrow? It does not matter. As Kevin O’Leary, venture capitalist and ABC’s Shark Tank television personality would say, “Money does not care.” Let’s hope that your small empire can survive the next 24 hours without you. If not, guess where you will be? Fixing it.

Tip: Understand, early on, the dedication, commitment and discipline it will take to run a company and manage your coursework.

2. Your social life will perish.

It’s Friday night, where are you? Unless you are satisfied with your accomplishments (which you should not be, regardless of how your week went) you should be at home innovating. There is always something to be done when you start a business. In fact, it often seems as though there are not enough hours in a day.

Tip: Make sure you use each day wisely. You have one shot in life, make sure it counts.

3. The possibility of of failing is real.

You have probably read the quotes about experiencing failure before achieving success. But the possibility of failing is a part of motivation. No one wants to fail, but in reality you are not invincible.

Chances are you will fail hundreds, if not thousands of times, before you hit a real success. Whether it is an email you should or should have not sent out, or a marketing strategy you should have used … you will fail many times.

Tip: The key to avoiding embarrassment is to keep your ideas to yourself until they succeed. When starting a business, it is sometimes best to keep it quite until things start succeeding.

4. The associated risk is colossal.

Well the risk is not as big as starting a business at any age after 20, assuming your parents pay your living expenses. But entrepreneurship is always risky, regardless of your age. If you decide to attend college, chances are, you will be working towards paying for your tuition. Spending time to start a business, may be difficult when it comes time to pay for college.

Tip: Consider all of the risks associated with starting a business and decide what you’re willing to lose in order to gain the title of “entrepreneur.”

5. Age barriers can be frustrating.

The majority of business vendors, especially payment processors, have a minimum age requirement — usually 18. If you are forced to verify your age, you could be without a payment processor for weeks, or even months!

Tip: Ask your parents, siblings, or friends to help you get started with new vendors and overcome associated age barriers you may encounter.

6. Your parents may not support you.

You may not think it is a big deal. However, “Get out of the house!”, “Go play with your friends!”, “Do something productive!”, “Get a job!”, could be some of what you could hear after a few months of starting a company. It can be very discouraging at first, but if you are like most successful entrepreneurs, it will just provide you with the motivation you need to succeed.

Tip: Look for support in local entrepreneur organizations, business clubs and other like-minded peers.

In conclusion, being a teen entrepreneur certainly has its downsides. So next time you hear about a teen making thousands, or even millions, think about what he or she has scarified and overcome in the process.

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Photo: Bershka

Josh MacDonald is a Canadian teenage entrepreneur. He has found success in the software industry, specifically SEO tools. With thousands of paying customers and dozens of employees, it’s hard to say what this young entrepreneur will be doing next.

Often many would-be entrepreneurs would like to turn their hobby — something their passionate about — into a for-profit venture. If your hobby has the potential to become a lucrative business opportunity, take note of these twelve tips on how to turn your passion into profit.

In order to turn your hobby into a business:

1. Choose passionately and viably.

“Be very passionate about your hobby. Not just enjoy it, but live it and breath it. You have to have an idea that is financially viable in some way.”

- Carolyn Wilman, Owner of contestqueen.com: @ContestQueen

2. Provide a valuable product or service.

“Provide something that others want to buy. It’s really as simple as that. As soon as you can offer a product or service to sell, you’ll see if you have a viable business. I think too many people waste time “building a platform” around an idea only to discover it isn’t actually a viable business. First, find out if you have something to offer that people want to buy. Then go to work building your business.”

- Laura Roeder, Founder of LKR Social Media: @lkr

3. Network and establish yourself.

“Start by networking and establishing yourself as an authority on the subject. This is simple to do when you are already familiar with the subject matter and enjoy talking about it. Focus on sharing your knowledge on the major social networking websites and on blogs and forums as well. Once you have a strong reach and have established yourself as authority, all sorts of possibilities will open up for you – both online and offline!”

- David Hermansen, Co-Founder of Store Coach: @StoreCoach

4. Love to do it for free.

“Businesses that start as hobbies are best because you already love what you do enough to do it for free!  You have the luxury of slowly developing your plans and customer base and transitioning into a full-fledged business without spending too much capital.  After all, you can’t really “be your own boss” if mounds of debt only allow you to choose the most profitable short-term options.  That ruins the whole point of making [sic] your hobby into an business.”

- Melanie Angelis, Holistic Health Practitioner at The Grecian Garden: @GrecianGarden

5. Don’t quit your day job … yet.

“Until your market is defined, concept proven [sic] and cash-flow [is] flowing, you need the security of a paycheck. When you start worrying about money your creativity is fettered and decisions are made based on the bottom line rather than unbridled potential. Contrary to popular opinion, most entrepreneurs are actually risk averse so we plan ahead and keep cash flow top of mind.”

- Michael Peggs, CBO of Michael Peggs: @MichaelPeggs

6. Dive in.

“You should always do something you love or are passionate about. You can make money doing almost anything, from selling stamps on EBay to starting a tech company. The first step is just diving in. If you think about it like a business and figure out how to scale and grow, you’ll be surprised how fast it evolves.”

- Max Teitelbaum, COO and Co-Founder of WhatRunsWhere: @MaxTeitelbaum

The tick-tock of the clock weighs heavily upon us. We soon become acutely aware of precious time slipping through our fingers.

As entrepreneurs, we become preoccupied with the idea that to be successful we must be Superwoman  (or Superman) and make it happen right now, today, or yesterday! This thinking is reinforced by society and mainstream media; it is the traditional self-development ideology that is “chocked-full” of seize the day mantras and painful reminders of the fragility and reality of life that faces us all.

Now I am not saying this type of encouragement is wrong.

In fact, I am a huge believer in putting yourself on the line — just going for it! For it is often the reluctance to do so — fueled by fear and unhelpful ego chats — that blinds us of our true potential. But what I am acknowledging is that diving in “right now” as though your life and business depends on it is not always the best approach in every situation.

The Pressure of “Right Now” Thinking in Business

Instead of giving in to the relentless pressure of “right now,” when we give ourselves the space, freedom and permission to take our precious time it can be the right thing to do personally and professionally.

For example, one of my clients is in the process of clarifying her ‘niche’ and the unique selling point (USP) for her business. She is still working a full-time job and has absolute determination to get her business up-and-running as soon as possible. However she has put herself under a lot of pressure to figure out the perfect niche “right now” — in hopes that she will prevent delays in the process.

There was just one big problem with her strategy; piling on the pressure so that she could come up with that golden moment of inspiration just was not working.

Rather than trusting the entrepreneurial process and coming from a place of contented self-assurance, she was being driven by fear and panic. These emotions (which are rife amongst ambitious young professionals) stem from what author Victoria Castle calls “The Trance of Scarcity.” When we operate our businesses (and lives) under the trance of scarcity our focus is on the “not enoughness” in our world, life and our selves. We perceive that there is not enough time, money, perfection … the list goes on.

This is problematic because when we look at life through the lens of not having enough we create that precise experience of lack for ourselves. This type of thinking can be likened to trying to light a flame with a dead match. You cannot set it on fire, and even if it magically did produce a flame, it would not likely burn for very long.

When we address our businesses from a place of lack and panic, we become just like that dead match — cut off from our real blazing potential. The result is mental exhaustion and deflated self-confidence; certainly not a state where our most soulful and powerful work can be born.

Yet the most ironic thing about piling on the pressure of “right now” is this:

When we let go of the pressure to get things done now, quickly, today, tomorrow; that is exactly when things become easier and we end up getting things done that previously felt like an uphill struggle.