Honing In on Your Idea
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Q: I have many ideas for a venture, but I don't know which one to pursue. I had one business plan in writing and had one private investor who was interested, but after doing more research, I was no longer interested in the business. I like to build things--I've been a design draftsman for eight years. I have done a variety of designing, from architectural and mechanical to electrical and advertising-related. I know my fields very well, but the industry itself doesn't pay much. If I were to go on my own designing for people or companies, I don't really know where the money will come from. I'm also currently building my basement from scratch, getting permitted and approved by inspectors for all my completed work. This is another area that I am interested in--building people's basements for them or remodeling them. Creativity is running through my veins, and I have expertise in many areas. My wife has told me over and over to start my own business, and I'd like to figure out which way to go. Can you give me any ideas of how to evaluate myself?
A: You're certainly on the right track. When deciding whether to start a business (and then which business to start), you've got several factors to consider.
First, of course, it is important to "take care of business." This includes making sure you have enough money to start the business you are thinking about (and enough money in the bank to live on in the first few lean months.) The best way to determine this is to write a business plan. Many people think you can put off this step--but you really shouldn't. A business plan not only helps you determine your money needs, but also focuses you on the business you're starting. Through the plan, you'll be able to define your competition and what will set you apart. That's called the USP, or unique selling proposition, and it's essential you know why and how your business will be different than similar ones in your area. You'll also be able to determine how much money (if any) you can devote to marketing, advertising, rent, etc.
Don't be intimidated by this process. There are some excellent software products out there--Business Plan Prois one that comes to mind--that help simplify the process. Also check out our SmallBizBooks.comsite for our guides to writing a business plan and other start-up resources--they'll be quite helpful.
Next, you are right in saying you want to start a business you have an interest in. Business plans and hot businesses only take you so far. All entrepreneurs should love to do what they're doing, because frankly life is too short to do something 10 to 2 hours a day and not love it. So many of the successful business owners I have talked to over the past 20 years started their businesses because they were passionate about their business. (Imagine waking up every morning and going to a job you hate. Multiply that tenfold if it's your own business, and you can see why you must love what you do.)
You seem to enjoy remodeling basements, and I think this is an intriguing idea. If you decided to pursue this, there are several things you need to do first. Find out what, if any, licenses and permits you need to do this type of business. Will you need to become a certified contractor? Where will your office be located? In your home? If so, then check your local zoning laws to make sure it is legal to operate a homebased business in your area.
Then it's time to do some basic homework. What's the potential market? Are there enough people with unfinished basements for you to draw from? Actually, now is a good time for remodeling businesses. Homeowners seem to be willing to spend a bit to improve their existing homes, especially if it adds to their home's value.
It appears you may have found a business with good potential to start. Begin doing your homework now, and good luck.
Rieva Lesonsky is a small-business expert and a senior vice president and editorial director at Entrepreneur Media Inc.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.