Here’s a helpful framework for quickly analyzing a business, from a book called The Millionaire Fastlane.
C = how much control you have (or would have) over the business.
- High control = email newsletter.
- Low control = Instagram Influencer.
E = what are the barriers to entry?
- Low barrier to entry = freelance writer.
- High barrier to entry = open a bank.
A high barrier is actually a good thing in the long run because it makes it hard for someone to compete with you once you’re established.
N = whether or not the business really needs to exist.
- Needs to exist: food or shelter businesses.
- Doesn’t need to exist: luxury goods business.
T = time, a measure of how passively the business operates and can generate revenue.
- Low score = freelance video editor.
- High score = a well-run SaaS.
S = how scalable the business is.
- Low scalability = creating and selling handmade jewelry.
- High scalability = online store selling digital products.
You don’t need to score high on each part of the CENTS framework to have a successful business, but the more you score well on, the more successful the business is likely to be 🤑
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