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Do You Have a Small Business...or a Big Hobby?

business-idea-or-hobby.jpgSome people study the market, find an opportunity, and start a business. 

Others find a product they like, buy a gross of it, and declare themselves in business. But really, they're not. An entrepreneur who simply follows their muse and sells whatever they find fascinating doesn't have a business, in my view.

What they have is a big, expensive hobby that's doomed to leave them broke. Here's an example:

A new store opened last fall near my home in the Northwest. Go Green sells electric-powered buggies that go a maximum of 25 miles an hour.

Just one catch: These vehicles don't have doors. It appears the owners weren't aware that it rains a lot here.

The buggies also only go 20 miles on a charge -- a bit inconvenient.

With major carmarker Nissan just hitting Seattle with its spiffy, >all-electric Leaf, which can do 90 miles an hour and goes 100 miles between charges, it's hard to see how Go Green's vehicle will find an audience. Except maybe on golf courses.

Given the icy reception the buggies got initially, the owner has inquired if the manufacturer -- a lawnmower company -- might be willing to make some doors to tack onto the cars. I know I'm going to buy a car on the promise that at some future date, doors might be added.

So why did the owner start this obviously wrong-headed business? He was retired and looking for something to occupy his time, the local paper reports. Go Green is perhaps the biggest hobby-business I've ever seen...but hardly the first.

Reading about this company's effort to sell what is essentially a glorified golf cart to residents -- surprise! >zero units sold to date -- brought to mind many other would-be entrepreneurs I've talked to over many years of covering business. 

Many made equally quixotic choices of what to sell. Or they situated their store on a little-traveled street. When I asked why they didn't do more market research to find out what customers wanted and where their store should be located, I've heard lots of interesting responses.

"I like this product."

"It just makes me feel good to have my own store and be my own boss."

"I think this recipe is delicious!"

"This lease was cheap."

These are not business owners. These unfortunate souls don't have a business, but a hobby gone mad. And one by one, I've watched business owners who think like this go bust.

One opened a sit-down restaurant that centered around roasted chickens -- yeah, exactly like the ones you pick up at the market right down the street for way less. Another opened a candy store, off the main drag and away from the mall, on a street most local tourists never find. It almost makes you want to cry, watching these hurtling trains of business disaster head toward the inevitable wall -- the day the owner runs out of cash and closes the doors.

The best way to make sure your business succeeds is to research your idea, before you ever open your doors. Sometimes, the best decision an entrepreneur can make is one not to open a business, because market demand isn't there. When a business owner doesn't size up the competition and doesn't know the marketplace, they'll soon be looking for a job working for someone else.

Once you open a business, you've got to keep researching. Consumer tastes change. Trends emerge. You could start out with a business, but get out of touch and end up with an overgrown hobby that's just eating your savings instead. In today's light-speed era of Internet-fueled change, that shift can happen fast.

Done any market research about your business lately? Leave a comment and tell us what you found out.

Carol Tice, a freelance writer, is chief executive of TiceWrites Inc. in Bainbridge Island, Wash. She blogs about freelance writing at Make a Living Writing. Email her at carol@caroltice.com.

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