Have we talked you into it? Starting a business? Congratulations! It’s scary as all get out, let me acknowledge that upfront. But it’s also super-awesome.
Now… what business do you start?
Things to Consider
1) Your talents and skills
Yes, I know I said (and I still stand by it) that you can start a business doing something you don’t even like to do. If the only business idea you have is doing something you hate, please start that one… it’s better than not starting a business at all (and you’ll have a strong incentive to turn it into a business rather than a job ASAP). But if you have multiple ideas, why not go with the option that best suits you?
You also need to consider your talents and skills to determine what you can actually do. I’m not saying that a 60-year-old technophobe can’t start a computer-repair business, but they must have a way to compensate for the fact that they’re a technophobe, whether that’s through their employees, partners, or planned future education.
2) The needs of the world
My dad has many things that he enjoys doing and is good at: making musical instruments, playing musical instruments, telling stories, driving buses, and teaching school kids. He would be happy to make money by doing any of these (and in point of fact, he does).
But there’s more demand for some of these things than others. He taught 2nd grade for years, because the US needs a lot more 2nd grade teachers than it does hammered dulcimers. Now that he’s “retired”, he spends more of his time driving buses than telling stories, because more people need the transportation.
If one of your talents/passions is much easier to monetize than others, why not start with that one?
3) How much capital do you have? How comfortable are you with loans?
I hope, as you read this, that you have a $1,000 savings bond that’s about to mature, and you have no concerns about where your start-up funding is going to come from.
But if that’s not the case, don’t despair. You still have two options.
- Take out a loan. Many businesses start with loans — it’s part of why they don’t “make money” in the first couple of years. Having a loan from the bank can actually increase your chances, because the bank won’t give you money until you can convince them that you have a good shot at success… which means a business with a bank loan probably has a good shot at success. Loans from friends and family can also help you out (to be fair to your friends and family, make sure you can convince them you have a good shot at success before you take their money).
- Reduce your needs. There are a lot of resources out there that can make starting a business much cheaper than it was 10 years ago. You can get free business cards from vistaprint.com (upgrade to a paid version after your first set to get the vistaprint logo off the back). A website costs around $10/year, and there are tools that will make you a pretty decent one without the expense of a web designer (although a web designer is worth springing for if people finding you on Google is an important part of your business. An iPhone or Droid can substitute for an entire Point of Sale system, or you can skip the physical location entirely and sell on ebay, Shopify, or Etsy. The first small business I ever observed from start-up was begun with a $300 laptop and a $5 book of carbon-paper invoices.
You can upgrade your business as you go, but if you start small, then your “risk” can be less than you’d spend on a weekend in Vegas.
4) Do you want a business or a job?
We call them small businesses, but most people don’t own a business… they own their own job. There’s nothing wrong with that (no matter what Michael Gerber says), but you should be aware of what you’re getting into. Owning your own job probably means working 40 hours a week at the part of the business that you’re currently aware of, and working 10+ hours per week at the parts of the business that you haven’t even thought of yet. Click here for more information on owning a business vs owning a job.
If you have some small business experience, either in a business you’ve owned previously, or as a manager in someone else’s business, you may be able to start an actual business, in which you won’t be doing the actual preparation of food/sales of books/repairing of plumbing/whatever. If you’ve never hired employees before, or if you don’t have experience with running a business, and especially if you need income to start right away, you’d probably better plan on owning your own job.
Once you’ve given all of that some consideration, put together a list of ideas for your business. Look at your monetization options. Talk to some people (people you can trust not to try to scare you out of the business idea, and preferably some people who are self-employed themselves) about your ideas and which they think would be best, and how to get started.
And then… go for it!
Resources for Further Reading
Strengths Finder
The E-Myth
