Choosing a Type of Business
Most of the books you can read on the subject of finding a small business
will tell you that the best place to start is with a matching of your skills and
experiences to some business that requires those skills. For example, if you
love to cook, they'll suggest you open a catering business or a restaurant.
If you have a strong interest in something, think about the needs of other
people who share your interests. Is there something you can provide? It may help
to think in terms of goods and services. Most businesses involve a
mixture of both, but this dichotomy can help narrow the focus.
Ultimately, considering doing something you love is a start, but it has to be
further analyzed by examining the market potential, competition, resources
required to enter the market, consumer/buyer demand, and uniqueness of the idea.
The best place to start in picking a small business is with
consumers (including other businesses that may want your product
or service). What do consumers or businesses want that's not
being provided to them? Ultimately, whether you succeed will
depend upon whether you are able to meet some unmet need in the
In fact, if you love to cook, you're more likely to succeed
if you open an interior decorating service — even if you know
nothing about interior decoration — than you are if you open a
catering service, if there is a demand for interior decorating
services but not for another catering company in your area. It's
far easier to hire someone who knows something about interior
decoration than it is to sell consumers something that they
Of course, you don't necessarily have to sell a new or different product or
service in order to succeed; you can succeed if you can improve what is already
being sold. In the above example, you should open a catering business if you can
provide a better service than other catering businesses, such as a wider menu or
lower prices. But that's still a function of what consumers want. Your
research would have told you that there is a demand for a new catering business
if prices were lower or if the menu were more varied.
Now that you have an idea of what you need, here's how to get it:
- A comprehensive study and analysis of all your potential markets is
something most small business owners either don't know how to do themselves
because they lack the training or can't afford to pay someone else to do
because it's so expensive. But there are a few less expensive (and,
admittedly, less scientifically exact) techniques
that you can use to find out what consumers want.
- Once you have some idea of what the market wants, now is the time
to begin looking at your skills and experiences. You'll need to match
your skills with what the market wants. Once you match your skills to
what's available, you should be well on your way to picking the small
business that's right for you.
- As we all know, a lot of new small businesses fail each year. In most of
those cases, the small business owners were probably convinced that their
idea for a business was a perfect match for their skills. They were wrong.
But you can learn from their errors by avoiding the mistakes they made. In
fact, there are some common
mistakes that many failed small businesses make.