 Okay. So you want to start a business and you're deciding, should I do this? Okay. Should I start this business? Is this business a good idea? Okay. So I'm going to give you a few frameworks and questions that you can ask yourself so that you can assess whether this business is a good idea in the first place. Okay. Hi. This is Jonathan from getting paid.io getting paid.io. And in this video, I'm going to do just that. Okay. Is this business a good idea? Okay. So let me show you on my iPad as well so that you can see for yourself. Okay. Before you start any business. Okay. You need to assess the opportunity vehicle. Okay. Let me explain to you situate what opportunity vehicle is and how should you see it and like your entire business and how to examine the factors of whether it's good or not. Okay. So opportunity vehicle is, Hey, this business model right here. Okay. You are probably not going to see massive success for at least three years. Okay. Most people in general, they take around three to five years for things to really click and for you to make life changing money, just letting you know. Okay. So with that in mind, right, you know, you're going to do the work already. Okay. And that is why you need to do this analysis. Okay. So every time you see an opportunity, okay. You need to see things in pros and cons obviously, right? And always there's an upside, right? And that's the downside. Okay. This is quite simple to people, right? How much like upside, what are the pros of doing this? And what is the risk that I'm taking in order to get this upside? For example, okay. The downside, right? This could mean, um, how do I say this? This could mean money, right? You can put in money, you can put in, uh, capital to actually put in and start up the business. For example, uh, you could mean, uh, connections, for example, do you need to use someone's connections in order and you lose social capital and stuff like that. Okay. So what are good opportunity vehicles? Okay. Good opportunity vehicles are business models where the gross margin on every sale is very, very high and it's easy to scale. Okay. So let me show you what that means. Okay. Good opportunity vehicle. Okay. You need to assess number one. Okay. How much gross margin you can, you can make. Okay. I'm going to explain to you gross margin. If you don't understand what that means later on as well. Okay. Multiplied by the number of units that you can make. Okay. So simple, right? If you, uh, have a hundred dollars, if you make a hundred dollars in gross margin for every single product that you can sell, and you know, you can estimate that you can sell around 10 of them, right? You're going to make a thousand bucks. Does this make sense? Okay. That's, that's the first thing that you need to consider. Okay. The second thing you need to consider is that this equation right here, this, how much profit, you know, gross profit that you make, right? Can you actually pay? Can you play employees? Okay. So when you're starting out your first business, right? Or your second or whatever it is, right? You always know you need employees in the future. You definitely need employees. Okay. You need to pay transaction fee. Okay. You need to pay for growth. So if you want to, for example, buy more units of your product, for example, or if you want to, you know, spend more on marketing, for example, you need money to do that. Okay. So you need access money. You need profit to actually do these things. Okay. And the last one people forget. Okay. You need to pay yourself. Okay. You need to pay yourself. Okay. So in order to assess this opportunity vehicle, sorry, you need to be able to see, okay, is that enough profit for me to run the business? And am I able to do these things? Okay. If you think, you know, if you've calculated, you've done the math and stuff, and it's quite okay. Right. Then you should definitely consider this as a good opportunity vehicle. Okay. Let me show you the factors that I do not assess. I don't care if there are lots of competitors. Okay. Let me tell you why. If there are competitors, it probably means there's money in the market. When there's money in the market, it means that there are many people actually buying this thing. Okay. Otherwise there won't be competitors. Does that make sense? Other people are not dumb. Okay. They actually go into business as well to make money. Right. So if there's no money in the market, if there's the people that they are serving have no money, they probably won't be in that business. Does that make sense? Okay. So it's important to have competitors. If you are the first guy in the market, unless you have a hundred million dollar venture capital around coming to you, you probably shouldn't do this business. Just be honest. You know, obviously sometimes you could, however, there's a lot of risk that you're taking. So I would prefer if there's actually competition in the marketplace. Okay. So that that's the factor that I don't consider that I don't consider. I don't care how many competitors there are. Okay. I care whether you know, we can build a good product and stuff like that. Okay. So let's now talk about what are the factors that you do consider? Like what, what should you care about? Okay. So the first one, right? Is can this business make you at least a hundred K in profit every single year? Okay. The reason why, uh, sorry, let me put this reasonably. Okay. The reason why I put, uh, can, can this entire business make you a hundred K profit on a personal level is because you still need to pay your bills. Okay. So no matter what happens, you still need to pay for electricity and food. Right. So you need to be able to make profit for yourself. Okay. I just put a random a hundred K number here purely because usually when people make 80 to 100 K, uh, their lifestyle doesn't really change. It doesn't affect what they do. Okay. As long as you can hit a number like this, it's totally fine. Okay. So that's the first factor that you, you know, from your gross margin analysis here, your good opportunity vehicle, right? You assess for yourself. Okay. Secondly, you want to see whether this business, right, does it get easier to scale as it grows easier to scale? What does that mean? Okay. So for example, when you start a business, it's going to be very, very difficult at the start, just letting you know. Okay. Your first few customers are going to be, you're trying to figure stuff out, trying to work on your SOPs. You're trying to get used to acquisition. You're getting used to servicing the customer stuff like that. And so you're figuring things out. Okay. However, once you've got your foundations in place, once you've got infrastructure in place, okay. As you scale, as you get more customers, it should get easier and easier to scale purely because number one, your audience gets bigger. So it's easier for you to acquire customers over time. Okay. Number two, you have economies of scale. So for example, if you have a supply and stuff, something like that, right, the more units you sell, you can decrease your cost of good soul or whatever or your cost to fulfill the product is as well. Okay. And number three, as you get more customers, for example, those customers are going to refer more customers to you. So it's going to be easier and easier to get more customers, get more cash into the business so that you can reinvest. Okay. If it gets harder to scale. So I'll give an example of, um, uh, of a freelancer. Okay. So this is a very, very simple analogy, but I think you understand this. If you are a freelancer, for example, and if you have many, many different clients, okay, as you scale the number of clients, imagine you have two clients and you scale to 10 clients. It means that you probably need to do five times more work. Okay. That is difficult to scale because you need to keep hiring people to do the work, for example. Okay. So that is a business that is very difficult to scale. Does that make sense? Okay. That the more clients you have, the more customers you have, the amount of work exponentially, like, you know, it increases as you go along. Okay. Generally, uh, the amount of work that you have to do actually should decrease over time. Okay. So that, that's the second factor. Okay. The number three factor is the longer that you do this business, do you have a mode, the longer that you do this business, do you have a mode? So for example, there are a lot of companies, um, that in year one, year two, year three, they do very, very well, right? And in year four, their entire business tanks for some reason, like sales not, not good enough, stuff like that. Or you have sold too many of the products. Everyone has bought it already, something like that. Okay. But that's a bad business because a business should get better and stronger as you grow. The more capital and money that you make, right? The stronger your mode should be. It should be harder for competitors to come into the marketplace to grab your market share. That's that makes sense. Okay. So the longer you do this business, does it have a mode? Okay. Usually in the online business, generally, if you're doing the right thing, okay, uh, your mode should be larger and larger because your email list, your customer base is larger. You can serve more and create more products. You can create more revenue and value at the same time. Okay. Most of the time, if you execute correctly. Okay. Number four, uh, is this mode defensible? Okay. So if you're able to create modes, for example, if you're able to create some very good technology, uh, some very, very good product, people know you for a specific thing. You have a very good reputation in the industry, for example. Right. And that mode should be defensible. It shouldn't be such that someone comes into the market and able to take your market share immediately. Okay. That's a bad business. Okay. So that's kind of mode slash competitive advantage. I would say competitive advantage. All right. Okay. The next one is number five. Okay. So can this business consistently produce cash flow? Okay. So what is cash flow? So predictably, does revenue come in very, very predictably? So I know that next month, three months from now, you know, there will be, there will be customers, there will be revenue coming in. Okay. Can this business constantly bring in cash and revenue? Okay. That's, that's number five. Okay. And lastly, number six, which is a more personal thing. Okay. In three to five years time. Okay. Would you still be interested? So if I told you, you started this business today in 2022, in five years time, right? In 2025, for example, would you be still interested in running this business? If the answer is no, then you should probably not start it because you didn't even want it in the first place. Okay. However, if the answer is yes, right? Then you should probably continue exploring this. Okay. So like, let me just summarize one more time. Okay. Can this business make a hundred K profit reasonably? Right. So even if we are not like the best in the world, can we make a hundred K in profit? Yes. Okay. Is it easy to scale? If I get more customers, is it more and more difficult to run the business? Okay. If it's more difficult, then you should probably not do the business. Okay. Number three, is there a moat? Right. Is there something that we are doing that as we go along, we can build better systems that will actually make it harder for competitors to come in? Number three. Okay. Number four is the most defensible. Do we have a competitive advantage somewhere? Okay. Number five, can it pretty consistently produce cash flow? Right. Can it predictably bring in cash? Even if we turn off all of the advertising, for example. Okay. And number six, in three to five years time, would you still be interested in running this? Okay. For me, you know, obviously I'm in online business technically, right? So in online business, a lot of the things check, checks the box. Right. And so for you yourself, right, you are starting a business. You are making a real commitment right here because you are going to give up your weekends. Okay. You're not going to see your family. You're going to talk to your girlfriend or whoever or your boyfriend less and less. Okay. So you need to understand the commitment that you're giving to this business and this idea. Okay. Hopefully this is makes sense to you. Right. Hopefully this gives you a good, solid framework of how to make your decisions moving forward as well. Okay. If you are stuck, if you're trying to decide and stuff like that, you know, feel free to use this framework for yourself. Okay. If you want a more scalable income, you know, feel free to click the link down below and go to getting paid.io and sign up to our email mailing list. Okay. And if you have any other video ideas that you want me to do, you know, feel free to put them down in the comment section below so that I can see them and I also can see your feedback as well. Okay. Thank you so much. And I will see you in the next video. Hopefully you're subscribed. Okay. See you.