Ready to dive in the entrepreneurial pool but unsure which direction to go? Follow these steps to help you decide what kind of business is for you.
One of the scarier moments in an entrepreneur’s life occurs when he or she chooses what business to go into.
Fortunately, choosing a business doesn’t have to be that random. Here’s a three-step plan for finding a good business that’s right for you. Because when choosing a business, one size definitely doesn’t fit all.
Step one: Consider these questions
Answer these questions:
Would you pay $10,000 to $100,000-plus to have the business specifics laid out for you, cookie-cutter style?
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Just be sure that before signing on the dotted line, you’ve thoroughly investigated the opportunity, talked with at least a half dozen franchisees who were not handpicked by the franchisor, and understand that you’ll be subject to the rules and regulations of the franchise for the life of the business.
Is there a type of customer you’d find it easy to sell to?
People who: (Check all that apply).
Are in a particular occupation or industry (specify).
With a particular hobby or recreational interest (specify).
Are in a certain income bracket (specify).
Are of a specific age, gender or background (specify).
For example, a self-employed psychologist who works best with middle-aged men might decide to market exclusively to them. That can help him stand out from the zillions of other shrinks hunting for clients.
Look at your current work. What do your customers or colleagues complain most about? Could you start a business that solves that problem? A machinist for a large aviation firm heard constant gripes from co-workers about the unavailability of parts. He quit his job to start a homebased parts courier service and had just one customer: his former employer.
Do you have a hobby or personal interest that could be turned into a homebased business?
For example, I know a lot about breeding roses. I could run a business in which I teach people a great new hobby — breeding roses. My target audience would be senior citizens. They have money and time for hobbies. And it’s something you can do forever—many of the world’s leading rose breeders are over 80. I’d conduct free seminars at senior centers to show people the joys of rose breeding. Then individuals could hire me to show them how to do it, just as people hire golf instructors or piano teachers.
Do you believe in a product or service that you might like to sell?
Consider the products or services you love to use. My daughter, Sharlene, loves makeup and runs Let’s Make Up, a successful business in which she offers free makeovers. The makeovers usually result in a $100-plus sale of make – up because the customers like the result and want to buy all the secret potions she used to create that perfect look.
Caveat: All things being equal, service businesses are safer than product businesses. There’s no costly inventory, no theft problem, no spoilage. Plus, service businesses are usually easier to run from home.
Step two: Peruse the options
When trying to chose a business that suits you it is important to follow step two of the process which is to: Peruse The Options.
Perhaps Step One already generated your perfect business, but more likely, it only helped you identify key attributes of that business. Now it’s time to scan actual business ideas.
Look for those that match the factors you identified in Step One, but don’t be afraid to pick something that mainly just mainly feels right. A good business choice usually appeals to both head and heart. Here are quick ways to expose yourself to thousands of business ideas:
- Look in the index of your Yellow Pages. It lists practically every kind of business out there. Any you might like to run? You can devise a unique business by combining two Yellow Pages categories. For example, combine accounting and psychology to be an accountant for psychologists.
- Once you’ve picked out a possible business, find Web sites for such businesses using your favorite search engines.
- A bit of reassurance: Don’t make the mistake of thinking that your business idea needs to be original. In fact, it’s risky to be original — that makes you a guinea pig. Better to take a proven business concept, combine the best features of your competitors into your business and open up shop on the Net or in your home. Of course, you needn’t forego all creativity. Perhaps, add a new service to a business’s roster of proven services, target a new audience in addition to the traditional one, or somehow just tweak the concept.
Step Three: Consider your options before signing the dotted line!
A business idea may sound great in theory, yet flop in practice. Sometimes it may, indeed, be a great idea—but you may not have the skills to make it succeed.
To reduce the risk of that happening to you, watch someone in your prospective business in action. For example, if you’re thinking about being a Web designer, watch one for a few hours. Could you see yourself, with training, doing that 40 hours or more each week? If so, try to learn the first piece of necessary software on your own or with a tutor. Are you catching on quickly? If so, chances are, you’ll develop the skills needed to succeed.
Other times, a business succeeds only because of Herculean effort — an owner willing to work 90 hours a week or invest a fortune to ensure its success. Are you willing to work that hard to bring your dream to fruition? Very few people are equipped to handle that kind of commitment. And more than likely, you don’t have a fortune to invest either.
Still other times, the idea is good but its heyday is over. Open the umpteenth balloon-delivery service in your city and you’ll face a double whammy — a market that’s already saturated and a fad that’s fading.
Risk-reducer: a survey. Before deciding to start a business, talk to 25 people in your target market — catch ‘em in front of a store, call people out of the phone book, arrange a get-together of friends of friends of friends, whatever. Describe your product or service and ask them how likely they would be to buy it. Beg them to be brutally honest—”Better to know now than after I’ve opened the business.” Ask them what’s the most they’d comfortably pay for your product or service. How could you enhance the product or service so they’d pay more?
Most Important of All
Most aspiring entrepreneurs put a lot of effort into choosing their business. But the fact is, just as important as the right idea is the smart, nose-to-the-grindstone implementation of that idea. I’d sooner bet on a smart, hard-working balloon-delivery business owner than on a dimwitted, lazy Internet security business owner.