Finance Globe

U.S. financial and economic topics from several finance writers.
6 minutes reading time (1271 words)

Starting the Right Business For You

Starting your own business can be fun, exciting, and scary.

There are a lot of unknowns when you venture into self-employment. Many business owners of the past have made an attempt at self-employment, but half of those businesses fail within the first five years, according to the U.S. Department of Labor. Increase your chance of running a successful, profitable business with thorough research about the type of business you want to go into, as well as matching the right business to your personal characteristics.

Those that are thinking about becoming their own boss are in one of two categories, those who know what type of business they want to go into and have a business plan, and then there are those who want to become self-employed but do not yet know what they want to do.

Many factors should be considered when starting your own business. Use this article as a guide to see if you and your business idea are starting on solid ground, or to help you narrow down to a type of business can that work for you.

Do you currently have a marketable skill or expertise in an area that can provide you with a business opportunity?
Many choose to extend their lifelong profession into self-employment. The knowledge and experience you've gained from your past employment may be enough to successfully venture off on your own. Others turn their favorite hobby into a self-employment opportunity.

The best thing about self-employment is that you have the choice to do something you love to do. But, don't be afraid to try something new if you are tired of the work you've done in the past. Maybe you've been an accountant all your life and you're tired of it. Well, that certainly is a marketable skill, but it will not be rewarding if you don't enjoy the work.

It may be a little easier for those who start a business based on their past experiences, but there are countless others who have grown a successful business with little previous knowledge of their chosen endeavor. Your business should allow you to do what you already love or let you learn something that you will enjoy.

Do you have in-depth knowledge of a product or goods you can sell?
Knowing your product is the key to successful selling. Don't be afraid if you don't have the "sales personality", you should just enjoy talking to people. A high-pressure sales pitch isn't necessary if you can offer something to the people who need it.

I don't know how many super-charming salespeople I've met who want to sell me something they've never used. They have the biggest smile during their entire pitch, but it's obvious the only thing they know about their product is what they've read in the pamphlet. Hey, I could have read the pamphlet myself and saved them the trip. It's more important to genuinely believe in your product, and to have all the answers your potential customers may have about your product.

Do you have an idea that no one else has thought of yet?
Maybe you have had a need for a specific product or service, but after searching for it, you've learned that it isn't offered by any other business. Well, if you've been looking for that product or service, maybe others have a need for it, too. You just may have stumbled upon a business idea.

Carving a niche may allow your business to capitalize on an otherwise untapped market. You may come up with a completely new idea, or you can specialize in one area of your type of business. Either way, customers who need your specialty will be likely to be searching for you, rather than the other way around.

How much do you want to be involved with other people?
All business owners will have to deal with their customers and clients, as well as any other company that may provide your business with needed services or supplies. But, the amount of time spent with others will be very different for a personal trainer, versus for a freelance writer.

Do you want your self-employment to keep you in the company of others most of the time? Or, would you rather talk to others long enough to get the contract, and then go on to do the job on your own? Some have a skill for dealing with other people, and some are at their best when they can work solo. Choose the type of business that is in sync with your personal nature.

Do you tend towards the artistic, the scientific, or a combination of both?
Let's say you've narrowed down your passion to flowers; you just LOVE flowers. Okay, that's a start. So, what do you want to do with flowers? Someone with a good eye for color and design may choose to start a floral business to sell beautiful arrangements for weddings, parties, hotels, and offices. Growing the flowers may be right for someone who pays attention to scientific details, such as the right time to plant, fertilize, prune or thin, harvest, and how to control disease and pests. Someone else may find their perfect flower business as a wholesaler, the middle-man who buys the flowers from the growers to sell to the florists.

Research your market thoroughly before settling on your chosen business.
Who will use your product or service? Will your product or service be aimed at people of a specific gender, age group, income level, or location? Will it target those involved in certain activities? Know who will use your product or service before you try to sell it. You may have the greatest idea ever, but it cannot make money for you if you can't locate the people who will need it. Also, know how your competitors are doing. Are their businesses booming? If so, there may be room for one more business doing what they do.

For example, it's hard to get last-minute mowing service in my area since many of them are already too busy; a new lawn care company would likely be welcomed. On the other hand, you would be smart to stay out of an already saturated market, if your future competitors are slashing prices and bending over backwards to lure in new customers. Also consider the general market direction. Is your chosen business recession-resistant? Or will your business provide a luxury that may be the first thing consumers cut when times get tougher?

And, the final answer will often come to money.
Do you have the funds needed to make your dream a reality? Will you be using all of your savings, getting a loan, and possibly receiving help from investors? The road to self-employment can hit a dead end if you don't go in with a realistic expectation of your actual start-up costs. In the case of limited funding, it may be neccesary to start smaller to alleviate some of the financial burden of starting your own business, and then grow it into what you want it to be when the business begins to generate enough income for expansion.

For example, a part-time pet-sitting and dog-walking service's owner really wants to have a mobile pet grooming business, but he is beginning with a business that requires minimal start-up costs. He is building his customer base with the current services, and plans on buying the necessary vehicle and equipment when the business grows enough to support those expenses. Don't give up on your hopes of self-employment due to money issues. Find a route to get there, even if it means taking a short detour.
Love and Money - Comunication is Key
The Financial Side of starting Your Own Business


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Thursday, 25 April 2024

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