Start Your Engines
Brainstorming and selecting the type of business you will start is key to becoming successfully self-employed. It involves discovering the business that fits you best and finding out whether there are enough customers willing to pay good money for your offerings.
"When clients are trying to decide what kind of business to start, I have them list what they consider to be their strongest talents, skills, and educational experiences," explains Jean Wall, a business counselor with the University of Alaska Small Business Development Center located in Anchorage. "If they've produced a list of four or five different types of businesses they feel they're interested in, I have them do a self-evaluation to determine how well their current abilities, talents and education meet the needs of the businesses they've identified. Personal interest in the ultimate business is important, too. The business idea that makes the greatest match overall with these criteria is an excellent starting point."
As a fledgling entrepreneur, it is critical that you conduct a thorough self-assessment in order to find this match. To do so, ask yourself a series of personal questions, and jot down your responses. For example, what kinds of things do you most enjoy doing? What do you like to do on your day off? What is it you've always said you were going to do someday? What are the things you do that others compliment you on? If you could design your perfect day, what would you do? To what degree do you enjoy interacting with others? What types of things do you not like to do? Take the time to note both your strengths and weaknesses, your preferences and aversions.
Next, brainstorm and come up with a list of potential business ideas that mesh with your abilities, interests and lifestyle. Almost all businesses fall into one of two categories: selling products or selling services. Nearly any innovative product can become the basis for a successful venture if it can be produced cost-effectively and there is a distinct market for it. Unlike product-based businesses, many service businesses can be started more readily, as they frequently involve no inventory and, thus, have lower start-up costs. Think about which category appeals to you most, then take your decision-making from there. Remember to use the results from your personal assessment as a checklist to evaluate your options.
If you find that you're having trouble coming up with viable business ideas, keep in mind they can come from a variety of sources. Often, they extend from past or present career positions, hobbies, personal interests and leisure-time activities. Sometimes, they result from identifying future trends or businesses that are succeeding elsewhere, or from finding some sort of problem and coming up with a solution. Occasionally, they seem to just appear from out of the blue. Ideally, they allow for the fulfillment of long-standing goals and dreams.
"I've been into motorcycles since I was 5 years old, and I raced motocross for ten years. It was my lifelong dream to work on motorcycles full time," says John Young, 24, owner of Xlent Custom Cycles in New Lenox, Illinois. Young's business provides custom-built motorcycles and after-market Harley Davidson parts and accessories.
"I realized that Harleys were something I really got into as I got older, and I knew there was a great market for them out there," Young states. "Having been around the bikes, I knew quite a bit about them and about the local market demand. The biggest risk I faced came from the fact that there were competitors in my area. But I knew I could overcome that risk, because the competition's rapport with customers was not good. They treat people badly, and I knew I could use that to my advantage. I'm as busy as I can get right now."
Customers are the most crucial ingredient in your recipe for entrepreneurial success. Before settling on your ultimate business idea, therefore, it is imperative that you determine if you'll be able to find enough people in your community who'll need, and be willing to pay for, your offerings. Remember: The most successful businesses flourish not only because they provide fantastic products or services, but also because they fill a specific need in their communities.
Once narrowed to a desired venture, your goal is to learn everything you possibly can about your intended marketplace before opening day arrives. Conduct your own feasibility study to figure out who is most likely to pay for your product or service once it becomes available, and how your offerings will differ from those of any businesses currently serving their needs. After identifying the pool of potential customers, you can conduct a mall-intercept survey, a direct-mail survey, or a telephone survey. Ask people in the local market whether the product or service is needed, what they're looking for in such a product or service, and how much they'd be willing to pay for it. Purchase and evaluate your competitors' offerings, and visit your local chamber of commerce to see how many competitors already exist in your area. If possible, talk to a few entrepreneurs who are doing what you'd like to do to get a better picture of the traits, abilities and customer appeal required to succeed.