Starting a business, whether it’s a part-time home-based business, or a full-time business with its own location, has risks and rewards. But do the rewards outweigh the risks? How do you know whether the business is one you want to start? Are you following the crowd, or setting the trends?
Here are five tips to help you figure out what kind of business you want to start:
1. Work on your passion. This is something you’re going to ideally be doing for years to come. Find the thing you’re passionate about, and would love to spend 8, 10, even 12 hours a day talking about, writing about, and selling. You need to love this, otherwise you’ll be tired of it within the year. If it’s your true passion, then it won’t ever seem like work.
2. Determine whether there’s a need. Starting a business that everyone else has started — restaurant, cleaning business, consulting business, online store — is not the best path to success, because you’re just another “me too” business. Instead, find a smaller niche where there are fewer people, but a high demand — organic food restaurant, industrial cleaning business, nonprofit consulting, online designer maternity clothing store. By finding this smaller niche, you can more easily identify potential customers, and see a greater chance of success with less competition.
3. Find out whether a community of potential customers already exists. Is there a community of people who care about your particular product or niche? Do you know enough people who need what you want? Not just likely to buy, but are actually interested in what you have? If you can identify buyers, you can develop a strategy of how you’re going to reach them. The community can be local, or it can be a group of people around the country with shared interest, but make sure there are people who need the thing you have.
4. Make sure it’s easy to reach your customers. It’s an old business adage to “fish where the fish are.” That’s more easily said than done: do you know where the buyers gather? Is there a low or high cost to entry? Maybe your customers are spread throughout a large city, and the easiest way to reach them is through TV advertising. That’s got a fairly high barrier to entry, and may stop you before you ever start. Or maybe your customers are limited to a single ZIP code, and you can reach them through direct mail. That’s a lower barrier to entry, which means with a little help, you can target your buyers directly.
5. Do you need special knowledge? If you’re going to be a bookkeeper, you need to be good with numbers, and have worked as one for a while. If you’re going to be a consultant, you hopefully have the knowledge and experience to actually tell other people how to run their businesses or live their lives. But other businesses — online store, cleaning business, etc. — don’t require special knowledge. Make sure you have the knowledge about the industry or field you want to start a business about.
Be sure you know what kind of business you want to start, because it’s going to be one you’re hopefully going to have for years and years. Figuring out these five steps will make deciding what kind of business to start much easier, and help you find success sooner.
About the author: Duncan Alney is the president and founder of Firebelly Marketing. He is an entrepreneur, writer, speaker, and photographer, and he’s working on his first social media marketing book, which will be out in late 2012. Duncan has lived on 3 continents and in 5 countries, but is proud to call Indianapolis home.
Photo credit: InspirationDC (Flickr, Creative Commons)