Presumably, at this point, you've already identified some need in the market that's not being met. If so, you're ready to match your skills with those unmet needs. If not, you may want to review our discussion of the right small business for you.

You should begin by listing what you enjoy doing, what your hobbies are, which skills you've acquired, what your work experiences have been, and what your goals are for the business.

 

In the Business Tools area is a business selection checklist that will help you match your skills and experiences to business ideas you've developed. It should help you make a choice or at least narrow your choices.

Although making such a list might seem at first to be a little simplistic, you'll be surprised how much being forced to write down your ideas will help you crystallize what it is you want from a small business.

Compare the list you've just made with your list of what the market wants. Do any obvious matches leap out at you? If not, don't give up.

Here are some more tips and suggestions for choosing a new business:

• Look at the list that you compiled from your market research; eliminate any of the businesses that you don't believe you'll really enjoy owning. As a small business owner, you'll be living, sleeping, and breathing your business - if you don't enjoy that type of business, your chances for success are slim.
• On the other hand, be wary of relying too heavily on your list of interests when making your choice. Don't forget that most of a small business owner's time is spent on tasks such as managing employees, haggling with suppliers, meeting with your lawyer or accountant, etc.
• If you don't have a lot of money to start with, look for a business where you get paid up front and you don't have a lot of startup costs.

 

Suppose you love photography. If you open a store that sells photographic equipment, you'll have to rent office space, purchase inventory for the store, and probably extend credit to customers. That'll cost you a lot up front, and you won't see any money coming in until your customers pay you. If, on the other hand, you hire yourself out as a photographer, you can probably operate from home, and you should get paid at the time of the shoot.

• Look for businesses where you will have a lot of repeat customers or where people will need to keep buying supplies from you.
• Avoid seasonal businesses (if, however, you're willing and able to ride out the slow months, these businesses - such as beachwear shops, ski shops, farm produce, Christmas-related stores and services, and anything to do with schools and colleges - can provide you with a lot of time off).
• Avoid competing with discounters or with well-established businesses, since it will be just about impossible to compete with their prices. Instead, you'll have to compete in service.
• Service businesses are the easiest and cheapest to start because you don't have to buy a lot of equipment and you might not need any employees, at least at first (although if your goal is to someday sell the business and retire, you should be aware that these businesses are also often the hardest to sell because the primary asset is often you).