As human beings, we’re all emotional creatures yet, how often do we make business decisions based on emotion instead of our intellect? While making decisions based off of emotions shouldn’t be completely ruled out, when it comes to business, its all about the numbers.
I have a friend who buys bullion coins like Silver American Eagle one ounce coins and such. One day, we went out to dinner and he was so happy with his purchase that he brought one of his shiny coins so I can see how cool and shiny it looks. Then my friend went on about how perfectly graded the coin is and that someday it will be worth a lot of money. My friend was in heaven and this coin made him really happy, so happy that he decided to bring it to dinner so he can talk about it. When discussing some more with him about this coin, he admitted that the coin makes him happy.
The problem my friend faces and I am only assuming many others face as well is that we tend to make our business and financial decisions based on emotions. Here is the formula for how emotions are created:
- Your Thoughts lead to your feelings.
- Your feelings lead to action.
- Your actions produce your results.
In the case of my friend, he bought the coin for $75 but the worth of the coin in market value is only $30. The reason why it cost him more is because it was included in a nice case along with a certificate to show the grade of the coin. My friend bought the coin purely as an investment but the moment he bought it, he lost $45. If he decides to resell the coin, he will only get the spot price back (whatever the market wants to pay for your one ounce silver coin.) These coins are developed for two types of people — the emotional investor that likes shiny objects and the coin collector who will eventually pass it on to his children or keep it for years or decades. My friend on the other hand wanted it as an investment – clearly he made an emotional decision because the coin made him happy.
When I started my businesses more than ten years ago, everyone always asked “how did you get into sunglasses and why?” and my answer was that at first I didn’t have to carry any inventory and the profits were astronomical. Whats there not to love in this business model? Instead of sunglasses, I could have sold anything but I really didn’t care as long as the cost was low and the profits were high – as an Entrepreneur, this business concept is really not genius, it is common knowledge to buy low and sell high.
How to Pick a Product To Sell or a Service To Offer:
1. First find out what people are looking for.
2. Find the product and sell it to them or learn the skills and teach it to them.
3. Collect profits and secure your niche.
Business is an Intellectual Sport
- Its good to feel good about something but instead, do the math and research.
- Are there other people selling your products / services? If so, that may be a good thing.
- If other people are selling your products, you can too – on the internet, there is no such thing as competition. There are dozens of ways to market your products and services that your competitor will never have a chance to be side-by-side with you.
- The product does not matter – the numbers do.
If you ever find yourself in the position of rapidly changing your mind about something or not being able to decide which business idea is good for you, then perhaps you’re being lead on by your emotions instead of the numbers. Business is an intellectual sport and should not be played using our glands. Sit with a pen and paper and work out the numbers and if it makes sense, you have a winner.
I hope you learned something from this post. If you have any questions or comments, please respond by posting a question or a comment and I will reply shortly. Thanks for reading!