The concept of starting a small business is a dream for
many people. While the thought of owning and operating a business is
attractive, many would be entrepreneurs are unsure how to go about choosing a small business idea that
is right for them. Here are some simple tips that will help you come up with
the ideal small business idea and be well on your way to establishing your own new
business.
While it is a good idea to consider
your own background and talents as you seek business ideas, don’t limit
yourself to those alone. This is a mistake many people make. While there is
some merit in going with something you already know well, there may be other
aspects of running that particular type of business that you do not know well
and may find very hard to assimilate. While looking into potential
opportunities that draw on your primary skills, don’t hesitate to also consider
opportunities that are less directly connected with your background. The ideal
business idea could be one that you would never have considered otherwise.
In addition, resist the temptation to
go with a business idea simply because the product or services are those that
you already know and like. Keep in mind the idea is not to cater to your
personal likes and dislikes, but to offer something that will capture attention
and market share within your scope of operation. Unless you know there is a
market for what you can offer, and that there is room in that market for one
more provider, don’t spend a lot of time investigating or pursuing that small
business idea.
Some of the best business ideas focus on the potential
for repeat business. This is because you want to not only gain new customers
but also retain those you have. A small business idea that revolves around
supplying something people need or want and that has a limited life is a great
way to build residual income, hang on to your satisfied clients, and be able to use their
good recommendation to secure new customers. There are many ideas that meet
this criterion, from telecommunication services to
operating a beauty salon.
You also want to consider a small
business idea when the profit margin is relatively high. The costs associated
with producing or securing a viable product should easily be offset by the
sales of the products and still provide a tidy profit. Larger profits don’t
only mean more money in your pocket; they also mean money to invest back into
the business or to place in a contingency fund in the event that the market
changes and you have to lower prices or change the focus of your business.
Even when the potential for repeat business and a large
profit or present, there is also the need to look closely at the market
potential associated with the small business idea. Ask yourself which consumer
markets you would want to target in terms of building a customer base. Find out if there
is room for one more competitor in those markets. Also consider what you can
offer consumers that they can’t get from someone else. If you find there is
room in the market and you can be competitive with the more established
businesses on something other than price, you may have the perfect small
business idea.
Keep in mind that it is not always the
size of the market that determines if there is room for one more business. Even
niche markets with relatively small consumer bases can be extremely profitable,
if the competition is low and your products are versatile enough to
cross-market to several different markets. Your ideal small business idea may
allow you to quietly earn market share in several niche markets and remain
under the radar of larger competitors, making it possible to operate
successfully and with relatively few losses to your client base.