What to Consider When Starting a Small Business

Do you have a dream of starting your own business, working for yourself, and being your own boss…well you’re not alone. The idea of starting your own business is exciting and scary all at the same time, and one of the first and most important decisions you’ll have to make in the beginning is what kind of business will you start. If you want to accomplish your goal of starting a small business, and fulfil your dreams as your business grows and prospers, you will want to make sure that you carefully choose which type of business you want to open.  There are a number of important factors that first need to be examined.

Questions to Ask Yourself When Deciding What Business To Start

  • Do you prefer running your small business out of your home?
  • Do you want to work outside the home, in commercial building or office space?
  • Do you want to run an online business?
  • Do you want to do a combination of them all?
  • What kind of time commitment are you willing to make?
  • Will this business need to dovetail with your current lifestyle (working days, weekends off, no traveling, etc)
  • How you want to run a business or how you are able to run a business should have a significant impact on the type of business that you are interested in starting.

The next step is to sit down and really think through the things that interest you the most, and areas of personal strengths and weaknesses, so assess your skills.

  • What are you knowledgeable about?
  • Do you have any areas of specialized training?
  • Do you have a hobby that could be turned into a business?
  • What are your passions? Can they morph into a business?
  • What about the job you currently do? Do you enjoy it enough to branch out on your own?

Starting a small business based on something that you not only know, but also love, will up your chances of your business being a successful one. Now that you have a list of things you are good at, and have an interest or passion about, it’s time to objectively look at the competition in that particular field. For example, lets say you have a love of fishing and fancy yourself quite the angler. You want to open “Big Mouth Bait & Tackle Shop” (you specialize in bass fishing) today! Not so fast, a few things you may want to consider.

A Look At The Competition

  • Are there other competitors in the area (are you the only bait and tackle shop in town?)
  • Will you do business online, and where is the competition there?
  • Are you filling a niche in your market (maybe there aren’t other bass shops around)?
  • Who is your biggest competitor and where are they located?

In the example of “Big Mouth Bait & Tackle Shop” you will have a much better chance of success if you don’t plan on opening your shop in a town that already has 3-4 tackle shops, one of them being a big national chain. Your chance of success skyrockets if you live in a community of fishermen where no tackle shop currently exists, or if you are filling a void in a niche market of bass tackle shops. The smaller the amount of competition, the better it will be for you and your business.

Also, if competition does exist, make sure you check out the competition. Don’t be shy, take a look at their products and services and see if there is a niche you can fill, or if you can do what they are doing better, more cheaply, or both. If you do not think that you can compete with your intended competition, it may be difficult for you and your small business to make a profit; therefore, you may want to refrain from going with your intended business idea. That doesn’t mean that you can’t start a business, it just means that you should carefully choose which type to start.

Recap:

1st – Consider how you want to run your business, what would fit your lifestyle the best (work at home, online business, part time business, etc)

2nd – Write down a list of what you are good at. What you already have skills and training in, and things you are passionate about or interested in.

3rd – From that list identify business opportunities that fit with how you want to run your business, and your knowledge, skills, abilities, and interest. Business intelligence software can be a great help here.

4th – Once you land on a couple ideas, analyse the competition. The lower the competition the greater chance for success.

5th – Once you’ve identified a business opportunity that fits all the above, the real work begins…time to start writing your business plan, estimating startup cost, and positioning yourself for success!