After doing some research on the market and market trends, hopefully you are at the point that you have identified some unmet market need. This is the point when you can really match your skills with those unmet needs. Go back to the list of what you like and dislike doing. Also, try making a list of your hobbies, skills, and work experience. From this information you can determine what your business goals are. This list-making mania may seem like overkill, and may seem simplistic, but writing down lists is actually a very effective cognitive tool that helps make ideas more concrete and real. Compare your lists with your market research. Even if no obvious matches jump off the page at you, don’t lose hope. Let’s explore some other ideas to work with if market trend research yields no good results for your new small business opportunity.
Eliminate those business opportunities from the list of your market trend research that you know you will not enjoy managing and working. Small business owners take their work home with them. They work extra hours and often sacrifice personal time for business. If you don’t enjoy the business, chances are you won’t enjoy life and you will easily lose momentum.
Don’t rely too heavily on your list of likes and dislikes when choosing a business opportunity. There are a myriad of other tasks that are involved with the running of a small business and you will potentially run into something that you don’t necessarily like doing. Remember that there are many duties involved with running a small business, from managing employees to meeting with your accountant or suppliers. You don’t have to like everything that you do.
If you lack start up capital, look for a business where there are no heavy start up costs, and perhaps look for a business where you get paid up front. For example, say you like photography. If you open up a retail storefront there are too many expenses involved to count: purchasing photographic equipment for retail inventory, or extending credit to customers. There will be a huge up front cost involved and there won’t be any immediate income. The other option would be to hire yourself out as a photographer. This has lower overhead, as you can probably operate from home, and you get paid each time you do a photography shoot.
Try to find a business that tends to have repeat customers, or where customers and clients must develop a long term relationship with you to keep making purchases over a long period of time. This will definitely help if you are short on capital.
If at all possible, stay away from seasonal businesses if you want a steady income. The only people who can manage seasonal businesses are those who manage their money well enough to ride out the slow period. Examples of seasonal businesses would include Christmas-based retail stores or services, beachwear retail shop or surf shops (depending on the area where you live), ski shops and farm produce stands. On the other hand, if you’re the type of business owner who likes or needs a lot of time off, a seasonal business may be just the right choice.
Try to avoid competing with well established businesses or with discounters; it will be nearly impossible to compete with their pricing schemes as a start up in desperate need of money. The only way to compete with well established businesses or discounters is to have excellent service. If you are able to provide that service, then you might consider entering the fray.
Service businesses are easy and cheap to start. These types of businesses don’t require a huge amount of investment in equipment, or employees for that matter. At first, you can go solo and work your way up the food chain. If you plan on selling your business in order to fund your retirement, be aware that service-based businesses are often the most difficult to sell because the primary asset is YOU.
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