Nobody starts a business believing that it will fail. However,What Business Should You Start? the statistics aren’t very comforting with more than half of small businesses failing before they reach their 5th year of operation.
People have many reasons for starting up as an entrepreneur. Before you make that all-important first step, you can improve your chances of success by ensuring that you choose the best business for you. It’s important to remember that what is suitable for someone else won’t necessarily work for you so what 6 factors should you consider?
Access to funding
The start-up costs for a business depend on which sector you plan to be working in. Statistics show that over two-thirds of businesses in the US are originally started from home. This of course can mean fewer startup costs in terms of rent, utility bills and so on.
If the nature of your business requires separate business premises, you will need to have access to capital. In such as situation, secure online business can be helpful until you get the enterprise running and making a profit.
Your areas of expertise
There is no reason why you shouldn’t start up a business in a sector of which you have no experience. However, you will face a sharp learning curve which will slow down any further development/expansion until you have mastered the basic techniques. This could make an already stressful experience even more so.
Think about your past academic and employment history. Were there any areas in which you excelled? Making full use of your pre-existing talents and skills can boost the chances of your business becoming a success.
Many people have developed a workable and original business idea from their personal life rather than from their professional expertise. The advantage of using a hobby or interest as a springboard for a business concept is that it is something you are already passionate about. This can motivate you more than trying to start up in a sector that leaves you indifferent.
It will also be something in which you are knowledgeable. Whether you’re a keep fit fanatic or an avid stamp collector, any hobby has the potential to be developed into a thriving business. You will also be in daily contact with like-minded individuals which will make marketing and customer relations much easier.
Not everyone has the right character to set up on their own. You need to possess a burning desire to succeed and also have the necessary persistence to overcome any obstacles and setbacks. If you have any ambivalence about the idea of working for yourself, this will show in your actions and behavior. Without 100% commitment, your business is more likely to fail.
Business vs. personal life
When you decide to start up a business, you have to think through the logistics of a work/life balance. You might initially start a business as a sideline and continue with your day job. In this case, you will need to devote your valuable free time to getting the business off the ground. Consider what impact this will have on your personal life (such as family relationships) and your ability to enjoy your evenings/weekends without guilt.
If you’re running an online business, your location isn’t usually an issue. However, for other businesses, you need to research the local market and competitors. Think about whether you’ll need to relocate and how this will affect your life.
The financial situation will also play a role in the right business for you. With the sole exception of some service industries, most startups don’t start making a profit until after 3-6 months. Do you have savings put by, family members ready to help, a supportive wage-earning partner and/or an understanding US private bank?
Finding a solution-based niche market
The best business ideas are ones which give a solution to a problem which people hadn’t realized they had. They are the seemingly simplistic ideas which you see and you say to yourself ‘Why didn’t I think of that?’ Get into the habit of carrying a notebook around with you and jotting down ideas as they occur to you. Problem-solving products or services increase your chances of success.
There are plenty of articles online with advice and suggestions about the latest trends which range from health food fads to tech products/services involving AI, VR or AR. The problem with following such trends is twofold. First, the market will already be saturated and you will be competing with lots of other businesses. Therefore, you need to give a tried-and-tested idea a new twist to make it unique.
The other problem is that fads and fashions come and go. You don’t want to start a business for a niche market which has a short shelf life. For example, one of the recent trends for new businesses is beard care products. If beards go out of fashion, where will this leave your business?
Nobody wishes to take away your dreams of going it alone. However, starting up a business shouldn’t be an impulsive decision. Thinking long and hard about all these factors will improve your chances of success.