Okay, so let's assume you wanna make enough money to be financially free.
But you don't just want financial freedom, you also want time freedom, ie you can have the flexibility to spend your time however you want.
And you also want creative freedom to do work that energizes you and that feels kind of fulfilling.
I am a big advocate for one particular method of getting those things, and that is to start your own business.
And so I've been talking about this sort of thing for the last year or so.
And the single biggest question I get from people in the audience is how the hell do I come up with a business idea?
And that is what we are gonna be focusing on in this video.
This video is gonna be all about what you can do, the practical steps you can take to try and come up with a profitable business idea, And to the end we have also created a nice little like workbook for you that goes through all of this stuff.
It is completely free.
There is a link down below.
If you download it, you can print it off, and this will help you come up with a profitable business idea.
It's linked down below if you want it.
Okay, so how does this process actually work?
Well, as you might know, all money is basically an exchange of value.
Unless you are the Fed or unless you are like the bank, you're not allowed to print money.
Unless you want to go to prison, you're not allowed to steal money.
Therefore, the only way for you to make money is for someone else to give it to you.
Therefore, we need a person.
We need a person who's gonna give us the money.
Now then, the question we need to ask ourselves is why would a random person choose to give you money?
Well, the reason a random person would give you money is because they have a problem that you are able to solve.
So we have person and we have a problem.
So there is a person who's willing to give you money in exchange for a problem being solved.
But in general, you don't just wave a magic wand and solve their problem.
That is where the third element comes in, product or service that helps solve the problem.
So that gives us what I think of as the holy trinity as it relates to business ideas.
We need to figure out who is the person who's going to give us money?
What is the problem that they have that they deem sufficiently valuable that they can give us money to solve?
And what is the product or service that we can create that helps that person have that problem solved in exchange for their money?
And the way I like to think this is that it's almost like you can think of these as Lego blocks.
You can think of them as like a deck of cards.
It's like you know.
Imagine you've got like I don't know the cards here for different people, different products and different problems.
Like in order to get a profitable business idea, you just need one.
You need to choose something from your person stack.
You need to choose something from your product stack and you need to choose something from your problem stack.
And then you have a business idea.
If the person has enough money and or the problem is sufficiently valuable for them to spend money on it and they deem the product to be a reasonable exchange of value ie they care about having the product and therefore solving the problem, more than they want to hang on to their money you then have a profitable business idea.
It's not complicated.
It's a fairly simple process to get these things.
But back when I was a noob to entrepreneurship, I just didn't appreciate any of this stuff.
Okay, so how do we figure out person, product and problem?
Well, there are three phases to this process.
The way I think of it is sort of using this kind of diagram.
Phase one is diverge.
Phase two is converge.
Phase three is emerge.
This is sort of the general process of creativity.
You start out by like thinking broad divergently, coming up with loads and loads and loads of different potential ideas.
You then, by process of elimination, converge on the thing that you think you wanna do.
Run as an experiment.
And in the process of doing that kind of discovery the right kind of niche or business idea for you emerges.
And that is how you get to all of the money that you want to make and the financial freedom, time freedom and the creative freedom that you want.
So if you download the worksheet, this is the process that we're going to take you through.
And I'm going to sort of talk you through some of the bits of this process so you can see exactly how it works.
But if you want to do it yourself, you should check out the worksheet.
Now, given that we know we want these things person, product and problem a mistake that a lot of beginners to entrepreneurship make is that they start here.
They start with the product.
They think I want to build an app, or I want to design a hoodie, or I want to build a tote bag, or I want to design a like, whatever.
They're starting with the product in mind and it's an okay place to start.
But from having coached a lot of people through the process, generally you get quite a lot more value by thinking person and problem first, before you worry about the product.
Now this combination and person of person and product is often called a niche.
It's sort of like you have a group of people.
So person plural, they have problems.
And this intersection of, like a specific type of person who has a specific type of problem, is then defined as your niche.
And so within our Lifestyle Business Academy, when we take beginners through the process, the first thing we do is that we try not to worry too much about the product.
And we instead try and figure out like what could the niche Now, as we talked about, we're going to start thinking divergently.
So there's a few different ways we can try and get at who is the person and what is the problem.
The first one is that, before doing any of that, you should just write down any initial niche ideas you have.
That is the very first thing.
If you imagine, what sort of problems could I solve for what sorts of people?
And you just take whatever comes to mind, you just go on the worksheet and you're like I could potentially help this sort of person, potentially solve that kind of problem.
Okay, so method number one of figuring this out is to start with our, what I call craft skills.
What do I mean by craft skills?
I mean basically any skills or expertise that you already have as a result of your personal or professional or life experience.
So you might wanna ask yourself, what are the sorts of things that you are good at?
What are the sorts of things that people come to you for help with?
What are the sorts of things that your employer is already paying you to do?
What are some skills you've developed as a result of solving certain problems in your own life?
All of this basically gives you a list of skills.
For example, when I first launched my medical school admissions business, like 13 years ago, I did a similar sort of exercise where I was like okay, what am I good at?
Well, I know how to make websites because I'd spent like ages trying to teach myself website design when I was a kid, because I was weird.
I mean, really cool.
I was like I think I'm pretty good at teaching because I had been working as like a private tutor for kids for a few years at that point.
And I sort of backed myself as it relates to teaching.
I was pretty good at close up magic.
I was like, can I start a business based around close up magic?
I tried getting some gigs at a restaurant that totally flopped.
I also did pretty well in the med school admissions exams back when I was applying to med school.
I kind of vaguely know coding like super basic.
And so, for me, these were just like random skills that I developed when I'm aged like 13 to 18, of just like exploring random crap.
If I think of examples of students in our Lifestyle Business Academy, which is our like online business school mentorship program that helps beginners start businesses, we have quite a lot that have experience in like people management because they've worked in corporate and so they've been managers.
A lot of them have the skill of what I'm going to call biz ops or business operations and things like that.
A bunch have the skill of automations because they've built like Zapier and Make and recently NA10 automations at work or inside projects.
AI is a big skill set that some people have these days.
If you have ever been interested in being a creator or something, maybe you have the skill of video editing.
I didn't when I started out, but now I would say I have the skill of video editing if I need it.
Something like being confident at speaking on camera, camera confidence.
Something like public speaking could totally be a craft skill.
Quite a lot of this stuff is very vague, but again, we're just thinking divergently.
We're just trying to come up with as many different cards as we possibly can, because this is part of the diversion thinking process.
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And let's get back to it.
So we now have a list of our craft skills.
The next thing we want to do is we want to create A list of things that we are passionate about.
Can we add anything to the list if we think of passions?
I mean.
For me, it would have been like World of Warcraft, which was one of my passions back in the day.
Would have been like watching trashy TV shows.
Can't really build a business off of that, but like, you know what?
Screw it.
We're just gonna, we're thinking divergently.
We're gonna put it down.
I was passionate about singing.
I really sucked at it.
So it wasn't really a skill, it was more like a passion.
These days I would say one of my passions is Harry Potter.
Actually, Harry Potter in general would have been a passion back then, but recently actually, Harry Potter fan fiction is a passion of mine.
And so you know what, I'm just gonna stick that over there.
You get the idea.
We're sort of divergently thinking and listing all the things that we are passionate about.
And if, for example, you find that you feel like you don't have enough of these skills, you can do a third thing, which is skills I'd like to learn.
You do not have to start a business based on skills you have.
You can actually start a business based around skills you would like to learn.
So maybe AI is on your list of skills you'd like to learn.
Maybe UX design.
Now I think, you know what?
I really wanna learn the skill of therapy, shall we say.
Forget about the credentials and all that kind of stuff.
I just wanna learn the skill of therapy because I like the idea of being able to offer therapeutic support to people.
And you know what?
I really wanna get better at guitar.
Why not?
We'll stick that on the list.
Great.
We now have a list of skills.
And, by the way, this diverge converge, emerge process is sort of what inspired this little pen that I have designed in collaboration with my favorite stationery brand, Baron Fick.
If you are into fancy stationery like I am, you might like to check it out.
I'll put a link down below.
It's a really cool pen.
I've been using it for months now, ever since I got the first prototype.
The story behind this is that I was at a writer's retreat where James Clear, the author of Atomic Habits, happened to be there.
And so we were hanging out and he gifted me a copy of his own pen.
And I really liked that pen.
I thought that pen was absolutely sick.
And it became my favorite pen for a very long time until I lost it.
And that pen was designed by Baron Fick.
I was like, oh, Baron Fick, I've heard of them.
Like, because I'd seen their notebooks around.
And because I loved that pen so much, I ordered a bunch of stuff from them and fell in love with the stationery brand.
And then I got an intro to the founder Joey and reached out to him and I was like hey man, I love the James Clear pen but like I really wish it was in white.
Can we design like a more light mode version of like the James Clear pen?
And he was like, oh, funny you mentioned that.
We actually have this hexagonal one that we can potentially collaborate on a design for.
And so we've collaborated on a design for it.
There's a link down below if you are interested in fancy stationery for whatever reason.
This is not a paid partnership.
They're not sponsoring this video or anything, but we do get a tiny cut of sales from the pen.
If you're interested in checking out the pen, it's yeah, it's great.
I love it.
So, now that we have this list, what we basically wanna do is figure out.
Okay, can I think of any combination of people and problems that any of these skills could potentially help with?
And again, we are thinking divergently.
So the goal here is quantity rather than quality.
My passion for World of Warcraft.
To what extent could that potentially solve a problem that someone has?
Well, It's a passion rather than a skill.
If I was really really good at playing World of Warcraft, maybe I could help aspiring professional World of Warcraft players solve the problem of like, getting better at World of Warcraft.
But like, I'm nowhere near good enough for that.
So like, okay, what else?
I'm passionate about World of Warcraft.
What problems does that help me solve?
Not very many.
And I'm not gonna throw it away.
It's still useful to have in our list, but it doesn't immediately lend itself to a problem that I can solve for someone who would genuinely have that problem.
What about website design?
Like okay.
Well, website design is one of those skills that obviously solves the problem if someone needs a website.
So you're like, all right, cool.
Well, there are lots of people in the world that have the problem of they need a website.
And you know, if I were to design websites for them, then maybe that could be a thing.
So for the problem of I need a website, what I'm then trying to do is think about who are the people that I know who have the problem of needing a website that I could potentially solve.
We generally don't want to think of people in the abstract.
It is generally easier to start a business where you know the name of your first client or your first customer.
So actually the first money I ever made doing my own thing was actually website design.
And I went to all my friends.
Back when I was aged 13 years old, went to all my friends in school and I said hey, does anyone's parents need a website?
And one of my friends, Luke, hooked me up with his stepdad who needed a website.
And so I designed a website for that person.
He paid me like 30 quid to design that website.
And then I was able to make money at the age of 13 by solving a problem for someone who had it.
But there are loads of people that I would know, beyond my friend Luke's dad who, for example, need a website.
One thing you might wanna consider is who do you know who owns a business or who is high up in a business?
Because, like for example, businesses have loads and loads and loads of problems and generally it is easier to sell stuff to people who own businesses because they can generally justify the return on investment for the thing.
If, for example, you've got a friend who owns a business and they'd be totally down with you buying them lunch and just asking them about their problems, That is where you get amazing, amazing insights as it relates to business ideas.
If you're thinking that you don't know any business owners, you probably do.
You're probably just like one degree of separation from them.
Do you have a friend who knows someone who like, runs the local kebab shop or who is a freelance designer?
A business does not have to be a big thing.
There are loads of people out there who are like self-employed.
You probably know someone who's self-employed.
Or if not, you probably know someone who knows someone who's self-employed.
Like could you find a way to talk to a bunch of different people and ask them about their problems so that you could generate niche ideas, if nothing compelling is emerging from this sort of divergent process that we're going through?
So, again in the context of web design, I'd be listing out all the people that I know, like actual names of people.
I'm like okay, you know, my friend Johnny runs his own like accounting practice.
Looked at his website and his website kind of sucks.
So maybe he has the problem of like needing website design, you know, that sort of thing.
This is just my hypothesis.
I'm just like spitballing here.
We're just thinking divergently about what potential business idea it could be.
Maybe I'm like, oh, my friend Ravi is actually a private practice plastic surgeon.
And then I'm like, hmm, I wonder if Ravi has a website.
And then I'm Googling him, looking at his LinkedIn profile and being like, uh yeah, he's got a website, but it's just like a GoDaddy sort of landing page.
So he doesn't really have a website.
You get the idea.
You start doing this for people you know.
If you have been creating content for any length of time and you have a bit of an audience on social media, your person could be and this would be vague, but it could be something like people in my audience.
Of course we'd want to get a little bit more specific about what sort of people and all that kind of stuff further down the line.
But hey, we're just spitballing here.
We're just thinking divergently.
We don't need to overthink it.
For example, one of our Lifestyle Business Academy students, his name is Ricardo.
He has a YouTube channel where he does like medical content for people who speak Italian.
And so people in his audience are generally people in Italy.
And so then he might be asking himself, what problems do they have?
And one big problem that he identifies was that they want to lose weight.
And he, as a doctor, is able to prescribe them like Ozempic, or give them weight loss advice or whatever.
You get the idea.
Again, we are thinking divergently.
No idea is a bad idea.
And there's a nice phrase from a chap called James Altucher, which I really liked.
I came across it many years ago, which is if you can't think of 10 business ideas great, think of 20 instead.
The goal here is quantity, not quality.
And we really do not want to be quite mired in overthinking right now.
And I'm deliberately being like, vague and messy about this.
If I'm taking someone through the process one-on-one or through a Zoom, call we literally if it's real life, we get out post-it notes.
If it's on a Zoom call, we get out a Figma board and put post-it notes on the thing.
And we just do this as a messy, divergent, creative process that helps us generate a bunch of ideas.
We do not want to be judging any of the ideas at this stage.
Now we are moving to the converging phase.
Once we've generated loads and loads and loads of different potential business ideas, we're going to try and converge onto the ones that make the most sense to experiment with initially.
There's lots of different ways of doing this.
Alex Hormozy has a framework, but the framework I like most of all is from a guy called Taki Moore, who's one of my mentors.
And it's based on this idea of person, problem, promise.
And then you are asking yourself three questions for each of these different potential niche ideas.
So let's say I was like, person is, I don't know, World of Warcraft players.
The problem that they have is that they're not very good at playing World of Warcraft.
And the promise is, I don't know, maybe I help them improve your enjoyment of the game.
So let's say that is niche number one.
Let's say, if I think of my first business that actually worked, it was sort of medical school applicants in the UK.
UK med applicants, that was my person.
The problem was that they were bad at the BMAT medical school entrance exam.
And the promise was ace the BMAT medical school entrance exam, with the implication that that will increase your chances of getting into med school.
Therefore, enter a med school.
And let's use another example of one of our Lifestyle Business Academy students.
Their person is UK accounting firms.
They're selling to businesses.
The problem is that client onboarding takes too long and their promise is automated client onboarding to save time, or something like that.
Now, in reality, your list would be like 15 to 20 different things long ideally, if you're following along with the process and following along with the worksheet.
And then we are asking ourselves three questions.
Number one, do I like the idea of working with this group of people?
And you rate that red, yellow, green.
Question number two can i actually help these sorts of people with that sort of problem?
And you rate that red, yellow or green.
And then the final question is will this sort of person be delighted to pay to have this kind of problem solved?
Which sort of gets at.
Do they have the money to pay and is the problem enough of a problem in their life that they will be delighted to pay for it?
And you rate that red, yellow and green.
So you've got your three questions.
Do i like them, can i help them and will they pay?
If you've seen previous videos of mine here on the channel talking about business advice, My recommendation is that you start a business in the high ticket space.
High ticket meaning you're charging at least $2,000 if you can.
Obviously adjust depending on your currency and stuff.
But if I was starting a business from scratch today, I would try my best to sell something for at least 2000.
And so my question would be, does this sort of person have that kind of money?
And secondly, is the problem sufficiently painful for them that they would be willing to pay at least 2000.
So would World of Warcraft players who are not very good at World of Warcraft pay 2000 to improve their enjoyment of the game?
Absolutely not.
It's not a painful enough problem for this sort of person.
Would medical school UK applicants who are bad at the BMAT exam pay $2,000 to ace the BMAT?
Well, That would be a yellow.
I'm unsure.
It wouldn't be the students themselves who are paying.
It would be the parents.
If they're rich parents from like China or something like international medical school applicants and they're paying 50000 a year in terms of like university fees, then paying two grand for them to ace the BMAT to increase their chances of getting into med school doesn't seem like too much of a stretch.
But if I'm targeting homegrown students in the UK which is kind of what I was doing rather than international students, and I look at my competitors and see what prices they're charging, it was a lot lower than two grand.
And therefore I'm like, eh, maybe they wouldn't have the means to pay for that specific thing.
Let's say my person is UK accounting firms and client onboarding takes too long and therefore my promise is automated client onboarding to save you a bunch of time.
Do I like them?
Well, you know, I've got a couple of friends who own accounting firms and I love talking to accountants.
You know, they're kind of boring, but they're very humble and very nice.
So like, you know, yes, that's a green for I like them.
Can I help them?
Well, I mean, I've never actually worked with accountants before but, like you know, I'm pretty good at like automations.
I've used Zapier, I've used Make, I've used NA10 before.
I kind of get the theory around how to automate stuff.
So yeah, you know, I back myself at potentially being able to help them.
And will they be happy to pay at least $2,000?
Well, yeah, probably.
If the accounting firm is doing I don't know six figures in revenue, maybe even seven figures in revenue, then paying like two thousand dollars to save a ton of time would probably be something that is worth it to them.
So that kind of idea would then get green lights across the board if i was in that specific situation now.
When we take students through this exercise, they always really worry about the will they pay column.
They're always like oh, i'm really not sure if they'll pay.
I don't know.
It seems like a lot of money, etc etc.
What i normally say is when you're doing your first pass through the exercise, just like go with your gut.
This is still a very rough process.
Just go red, yellow, green, depending on how you feel, depending on what your intuition says.
And then, of course, we can always do a little bit of market research to see are there competitors offering similar price points?
Because if competitors exist in a market, that is generally a good sign rather than a bad sign.
It means that there is at least a market there.
If the competitors are charging 5000, then you know that there are probably at least some people out there who are willing to pay at least 2000.
But if all of the competitors you can find are charging 20, you probably have a good sense that like okay, maybe 2000 might be a bit tricky of an ask for this specific person and this specific problem.
The other thing here that adds a lot of nuance is that there are premium products and premium services in any category you can think of.
For example, how much does a backpack cost?
Well, most people wouldn't pay more than like 50 for a backpack.
But if that backpack had Louis Vuitton written all over it, or like had Hermes written on it, suddenly people are willing to pay thousands, if not tens of thousands of dollars for basically what is the same thing.
And in fact, in every market, you get this sort of like distribution of stuff.
You get the 1% who are the luxury buyers.
You get roughly 9% who are premium buyers.
And then you get roughly 90% who are the mass market.
And generally we do not want to be starting a business that caters to the mass market.
This is playing business on hard mode because generally this requires quite a lot of volume and generally the mass market shops in terms of price.
And so you end up just competing on price.
It's very hard to compete on price, especially against competitors who've been in the game for longer than you.
If you're just starting out, it's also quite difficult to target the luxury market, because the luxury market doesn't buy based on features, they buy based on status, for example.
So, unless you have an in there where you can create like a I don't know concierge experience for the luxury market or whatever, or like help make the case that your product or service will increase their status somehow.
It's also generally not sensible to target the luxury market if you're a beginner.
But man targeting the premium market, the market of people who are willing and happy to pay for high quality stuff.
That would be a very good thing to do.
So a mistake you don't wanna make early on is you don't wanna just assume that they won't have the money.
You wanna think, okay, person, problem, promise.
Even my example earlier of helping kids get into med school.
Back when I was doing this business back in 2012 to 2019, I was charging between 50 pounds and like 110 pounds for like a classroom course that was teaching people in a whole day how to do well on the medical school exams or medical school interviews.
But a few months ago, I was in London and I hosted an event for entrepreneurs.
And there were three different entrepreneurs who came to that event, all of whom had businesses helping kids get into med school.
And they were charging five to $15,000 to help kids get into med school.
I was charging 50 to $100 to help kids get into med school.
What was the difference between what they were doing and what I was doing?
Well, partly it was the product.
They were doing more of a one-on-one mentoring service rather than a group course, so sure.
But if I were to offer one-on-one mentorship to someone getting into med school, I'd be thinking that's like 200 pounds, 300 pounds maybe, like.
30 pounds an hour for like 10 hours, for 300, but they were charging five to fifteen thousand.
The difference was is that i would have thought to target people in the uk who i knew, friends of people i knew, parents of people who i knew, but they were targeting people from mainland china, parents in mainland china whose kids were already going to expensive private schools in the UK or in the US ideally boarding schools and who really wanted their kids to get into, for example, a UK medical school.
Now these parents had loads and loads of money because they're like China rich.
And therefore for them, five to 15 grand was like literally nothing.
And therefore these guys were able to have like multi-million dollar businesses as effectively junior doctors in the UK, because they were targeting rich people, even though they were basically helping them solve exactly the same problem.
So the thing to keep in mind here is that don't let yourself get put off by a particular business idea because you think it's like not expensive enough or whatever.
It's like trying to remember that in every market there are people willing to spend lots of money on the thing, provided the problem is sufficiently painful.
Okay, once we've generated our shortlist of potential niches at this point you might end up with a couple of different options that you're like feeling relatively okay about, fingers crossed.
Here are some journaling prompts that we have in our workbook that students in our Lifestyle Business Academy get a lot of value out of.
Firstly, we have the two year test.
Imagine you're gonna be working in one of these niches for the next two to three years.
Which one feels most exciting?
Which one makes you think, yeah, I could see myself doing that?
Prop number two, the no fail scenario.
If you knew you couldn't fail, if success was totally guaranteed, which niche would you choose?
This removes the fear and reveals what you actually want.
Journaling prop number three, which niche feels the most you?
Which one aligns with your values, your story, and the kind of person you want to become?
Which one would you be proud to tell your friends and family about?
That is an interesting question.
Often results in a niche that's less profitable, But it's always interesting to see like whether our heart aligns with where the profit is.
The fear check.
Which niche scares you a little bit in a good way?
Sometimes the thing that makes us slightly nervous is the thing we care about most.
What's pulling at you?
And then we've got a couple more questions over here, but it's all in the workbook, if you are interested.
And so the idea is you can print it all out.
You can write it by hand if you want.
You can like fill out the PDF by computer if you want, whatever.
And then based on your answers above, which three niches seem to be rising to the top?
So we've gone through a divergent process to try and generate like a few dozen different niche ideas.
And then we've gone through a converging process to rate them on, do I like them?
Can I help them?
Will they pay?
And then, following these sort of journaling prompts, to figure out okay, what's the business idea or the niche that I might potentially wanna pursue.
At this point.
We generally recommend students fill out like just based on gut feeling what's your gold niche, your silver niche and your bronze niche?
Like who's the person, what's the problem?
Why are you excited about it?
Why do you think they'll hopefully be willing to pay lots of money to have that particular problem solved?
Any concerns that you have and any additional notes.
Now, if you are part of a mentorship program like our Lifestyle Business Academy, then you know we ask our students to send us this sort of document and we give them feedback on it and we kind of go back and forth with them.
Alternatively you could do that with like Claude or ChatGPT, but hopefully this process gives you a bit of a sense of like how to take a bunch of different things and narrow them down to a potential business idea.
And if you're interested in how this process fits into the wider roadmap that helps you go from zero to building a multi six-figure lifestyle business, check out that video over here that explains the roadmap in depth.
Thank you so much for watching.
I hope you got value from this.
Check out the workbook down below and I will see you later.
