It’s no surprise that with so many people out of work, there’s been an increase in small business startups. But how do you start a small business if you’ve never done it before?
It can’t be an impulsive move. It’s a matter of looking at what you are passionate about, what your skills are, what market options are available, and blending the three.
Here are six steps to take to come to the correct decision and find that great business idea.
1. Research, research, research, and then do some more research. Your first step is to analyze both the marketplace and the opportunities that are available. Look around, find some businesses that are doing something that looks good to you, and learn about those businesses.
How hard are they to create? How much money do they make? How much money would you need to start the business? The options are many, and there’s no shortage of associations and websites that are ready to help you find the right business to start. Among the places you should look are these sites:
- SBA.gov – “Starting and Managing a Business”
- Startupjournal.com from the Wall Street Journal
- CNN Money
Look for a business that catches your eye, that seems to have great potential for growth, and that is interesting to you.
2. Product or service? When it comes down to it, your business will provide people with a product or a service. Service businesses tend to be less expensive to start, as there is no inventory to buy or products to stock.
Whereas product businesses mark up prices on scores of products and profit from the difference, service businesses, such as lawyers and consultants, sell time and expertise. An initial decision, then, is which of these businesses best suits your temperament, skills, and goals.
3. Analyze your skills and experience. Suppose you have spent your career doing marketing for major corporations. That is an invaluable skill, and it should be tapped when deciding what business is right for you. Even if it’s not a marketing business, you would be foolhardy not to choose a business that doesn’t somehow tap into your well of knowledge and skill.
Now, it may be that you are tired of doing whatever it is you’ve been doing, and that, in fact, is why you want to start your own business. Understandable, for sure. Just be open to the option of finding a business that gives you a leg up on the competition because of your background.
4. Consider your options. You could create a business from scratch. You could buy an existing business. You could start a franchise. You could create a home-based business. The possibilities are many. It is important to realize that there are, in fact, a variety of options when choosing a business and to learn about the pros and cons of each.
5. Narrow your choices. Once you have analyzed the market, the opportunities available, your skills and experience, and your goals, you should be able to narrow your choice down to a few types of businesses.
The next step may be the most important one. You must—repeat, must—go out and find people who own and run these sorts of businesses. Theories and books are great, but nothing beats speaking with someone who lives that business every day.
6. Start your engines. Whether you want to start a business because you want or need to start a business or because you want to spend your time pursuing your passion, it’s important to do your homework and to find a niche that fills a market need.
Do that, and you are well on your way.