What Business Should YOU Start?
By Marty Nemko
One of the scarier moments in an entrepreneur's life occurs when he or she chooses what business to go into. It can feel like Let's Make a Deal: "If I choose Door #1, it could be a fabulous fortune or a pile of dung, and until the curtain is pulled, there's no telling which. "
Fortunately, choosing a business doesn't have to be that random. Here's a three-step plan for avoiding the dung piles and for finding a good business that's right for you--in choosing a business, one size definitely doesn't fit all.
STEP 1: ANSWER THESE QUESTIONS
1. Would you rather pay $10,000-$100,000+ to have the business's specifics laid out for you, cookie-cutter style? If so, consider franchises. Check out www.entrepreneurmag.com/Home/HM_Static/1,1845,dbapp_fran500index,00.html. There, Entrepreneur Magazine's top picks: The Franchise 500 plus articles on how to choose the right one for you. Just be sure that, before signing on the dotted line, you've talked with at least a half dozen franchisees that were not hand-picked by the franchisor.
2. Is there a type of customer you'd find it easy to sell to? (Check all that apply). People who:
- are in a particular occupation or industry (specify):
- have a particular hobby or recreational interest (specify):
- are in a certain income bracket (specify)
- are of a specific race, ethnicity, gender, sexual orientation, or age (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.
3. 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 unavailability of parts. He quit to start a home-based parts courier service with one customer: his former employer.
4. Do you have a hobby or personal interest that could be turned into a home 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.
5. Do you believe in a product or service that you might like to sell? Consider the products or services you love to use. My sister, Sandy, loves makeup and runs "Let's Make Up," a successful business in which she offers free makeovers. They usually result in a $100+ sale, because the customers like the result and want to buy all the secret potions Sandy 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 your home.
STEP 2: PERUSE THE OPTIONS
Perhaps Step 1 already generated your perfect business, but more likely, it only helped you to identify key attributes of that business. Now, it's time to scan actual business ideas. Yes, look for those that match the factors you identified in Step One, but don't be afraid to pick something that mainly just feels right. A good business choice usually appeals to both head and heart. Here are quick ways to be exposed to thousands of business ideas:
1. Look in the index of your Yellow Pages. It lists practically every business. Any you might like to run? Swiss career counselor, Daniel Porot, suggests that you can devise a unique business by combining two Yellow Pages categories: for example, accounting and psychology: be an accountant for psychologists.
2. Peruse books that profile home businesses, for example, Best Home Businesses for the 21st Century, Making Money with Your Computer at Home, Working Solo, and my book, Cool Careers for Dummies (shameless plug). It profiles 512 great careers and self-employment opportunities, including many that are little-known but rewarding. (Restaurant menu designer, anyone?)
Once you've picked out a possible business, find Web sites for such businesses using your favorite search engines. That Web search can provide an instant education about the range of such businesses and perhaps some features you'd like to incorporate into your own.
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 your competitors' best features into your business, and open it on the Net, in your home, or in an excellent geographic location.
STEP 3: PUT YOUR TOE IN THE WATER BEFORE DIVING IN.
A business idea may sound great yet, in practice, flop. 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 an hour or two. Could you see yourself, with training, doing that 40 hours a 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. Last I looked, you didn't look like Hercules nor had a fortune to invest.
Still other times, the idea was good but its heyday is over. Open the umpteenth cigar store in your city and you'll face a double whammy-a market that's already saturated, and you're buying into a fad that's fading fast. 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 and 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 fact is, as important as the right idea, is smart, hard-working implementation of that idea. I'd sooner bet on a smart hard-working cigar shop owner than on a dim-witted, lazy Internet security business owner.
© Marty Nemko 2004-2015. Usage Rights