What Type of Business Should I Start?
Many people struggle with what kind of business to start. There is no “one size fits all” business that
can be recommended. Starting a new
business is fraught with problems and complicated. You need to find a business
that fits the following criteria:
1) You are interested in the subject matter of the business. If you have no interest in what you are selling and/or making, then you are unlikely to sustain your business through the difficult times.
2) You have some skills in the subject area - be it a consultancy or a craft based business. You will always need some skills in order to make a success of your business. Of course you will also need administrative, marketing and selling skills as well so if these are not the kind of skills that you have or want to learn then your own business is probably not for you.
3) You need to be able to afford to start and maintain the business whilst you are waiting for the cash flow to become positive. You can usually only borrow to a maximum of 3x times your own investment. The fewer debts your company has on its start-up the better. Heavily leveraged companies are usually the ones that go into bankruptcy first, and who wants the stress of trying to manage a difficult and tight cash flow?
4) You need to have the right equipment, stocks and premises available. Without these essential components of a successful company, your business is doomed to failure before it gets started.
5) The most important criteria. People must want to buy what you are selling where you are selling it from, in the format you are selling and at a price that will enable you to make enough profit in order to sustain your business.
Get a piece of paper and start making lists and notes. Start with items 1 and 2 on the list and sketch down some ideas. Then, for each business idea that you have, investigate the most important factors in item number 5. Once you have some ideas of what kind of business you want to start, ensure that items 3 and 4 are met before you start investing.
Now you are ready to start planning out your new venture. Remember start slow, invest as little as you can before you fully commit, be prepared for some set backs and problems and enjoy your new business.