Q: I love kids and would like to start a service-oriented
business. My head hurts from trying to decide what to
do...children's day care, after-school care, exercise gym,
summer camp. Could you give me some advice?
Mel
Miami
A: You've made a great start by identifying the types
of businesses you'd like to own. Here are three steps you can
take to narrow down your choices.
Content Continues Below
1. Find your niche. Like many entrepreneurs in major
cities, you must decide which economic level and geographic
community you'll serve. For example, you may choose to provide
after-school care for low income children in one part of the
community, or open a high-tech fitness facility for youngsters in a
more affluent area. Look for an underserved niche--one in which
there's not a long list of entrenched competition--and then do
some research to determine if it represents a viable market for
you. If you encounter large numbers of competitors in every market
area, it will be your job to position your business against them
and create your own unique niche with an innovative business
concept and list of services.
2. Follow your heart. Consider the role you plan to play
in your new business. Do you enjoy being hands-on or is
administration more to your liking? Think about the structure of
each type of business you might start. Running a summer camp and
overseeing counselors and student activities, for instance, might
cast you in more of an administrative role than would a small
homebased daycare center.
3. Build a financial model. Each of the businesses
you're thinking about starting will have different capital
investment requirements, sales potential and profit margins. How
much do you plan to invest in your new business? Can you qualify
for a business loan or other financial assistance? And what are
your personal financial goals? Build hypothetical financial models
for several of your business concepts and compare them. Take into
consideration the difference in start-up costs between founding an
exercise gym and providing after-school care, for example. Then
look at the sales and net profit potential for each after expenses
for the facilities, staff and equipment are factored in.
By following your heart and your head in this way,
you'll find that sweet spot where what you truly want and the
world of possibilities meet.
Kim T. Gordon is the "Marketing" coach at Entrepreneur.com and a multifaceted marketing
expert, speaker, author and media spokesperson. Over the past 26
years, she's helped millions of small-business owners increase
their success through her company, National
Marketing Federation Inc.
Originally published in the August 2000 issue of HomeOfficeMag.com