You've made the decision to start a business. Now you're asking yourself, "What is the best business to start?"
The best business to start is the one that's best for you, the business that will give you the best chance of success. But that still leaves a world of possibilities out there. How can you winnow them down to find the best business for you to start? Figuring out what type of business you want is a great starting point. Once you've worked your way through these five decisions, you will have a much better answer to the question "What business should I start?"
1. Retail or Wholesale Type of Business?
Where do you want to be positioned on the supply chain? Retail businesses sell goods directly to consumers, usually in small quantities. Wholesalers buy goods (often in large quantities) from manufacturers or importers and then sell them to retailers and other distributors.
2. Franchise or Independent Type of Business?
Many established companies offer franchises, which are basically copies of their companies. If you buy a franchise, you are buying the right to sell the parent company's goods and/or services in a specific area. Besides paying a franchise fee, you will also have to pay royalties and perhaps additional fees to the franchisor. You will also be expected to abide by the terms of the franchise agreement, which will often lay out exactly the way you will do business. Owning a Franchise explains the advantages and disadvantages of franchises and what to expect.
Or is an independent business, one that you create and nurture on your own, the best business to start for you? Starting an independent business allows you the control and freedom that you won't get from a franchise operation.
3. Product or Service (or Mix of Both) Type of Business?
If you are a trained professional, such as a dentist, accountant or realtor, your business is going to revolve around the professional services you can provide. But there are many professionals that also have the opportunity to offer related products if they choose to do so. If you're a photographer, for example, you may decide to sell cameras, picture frames, and photo paper.
If you're not a trained professional, the key to deciding whether to focus on products or services when you're thinking about starting a business is determining where your true talents lie and what you most enjoy doing. Would you be happiest:
- telling someone how to do something,
- doing something for them or
- offering them the products they would need to do the job themselves?
Do not base this decision on whether or not you enjoy selling or are good at it. No matter what type of business you start, you will be involved in sales.
4. Storefront or Non-Storefront Type of Business Operation?
Winnowing through business opportunities and finding the right business to start becomes much easier when you know exactly what you're looking for.
If you have decided to start a business selling products, you need a storefront of some kind, whether bricks-and-mortar, such as a retail store, or virtual, such as an ecommerce site. Many successful businesses have both, expanding their customers beyond their locale. Others "borrow" a storefront, so to speak, by getting their products distributed by other businesses, selling their products through markets and fairs, or by using available e-commerce venues. (Selling on eBay is one example of this.)
If you have decided to start a business selling services, you may or may not want a storefront. Many different services are actually performed at a customer's home, from cleaning through landscaping. While you would still need an office (either in your home or elsewhere), an actual storefront is unnecessary.
Some services can be offered over the phone or the internet, such as the services offered by Virtual Assistants or some business coaches. These businesses often depend on virtual storefronts (business websites) to attract clients.
Another option is to use your home as a storefront. While bed and breakfasts are the obvious example of this, there are many other services that can operate successfully as home-based businesses, from travel agents through hairdressing. If you are considering this, be aware that home-based businesses are subject to zoning bylaws and may or may not be allowed in your particular area.
5. In Which Industry/Topic?
To make it easier on yourself, choose an industry or topic that you are not only interested in but have some expertise or experience. Otherwise, you're going to have to spend a lot of time and money educating yourself that you could be putting into your new business, or worse, making costly mistakes because you don't have the necessary knowledge.
And the Best Business to Start Is...
Now you're ready to find your best business to start. Let's suppose, for instance, that you've decided that you want to start a business that's retail, independent, product based, has a storefront and is related to gardening. Then the businesses that you might start (or look to buy) would include nurseries, garden shops, or a business specializing in gardening-related products, such as greenhouses or hydroponic equipment.
You can see that this still gives you a really broad range of choices, but has narrowed these choices down to the types of businesses you are most interested in owning or operating, as opposed to wandering through the whole bewildering array of possibilities.
Once you've broken it down this far, it's time to let research be your guide, searching for the "matching" business opportunities in your area, and if none exist, doing the market research that will show you specifically what type of business in the topic area or industry you're interested in has the most potential.
The next step? Writing a Business Plan, of course. You'll need one if you're trying to get any kind of financing, but a business plan is also a great way to test the feasibility of a business idea before you spend a lot of time and money on it.