4 Key Factors Affecting Which Small Business Type is Best for You

4 small steps that dictate which startup business is best for you

by Rod Dunne on August 25, 2011

in Biz Dev, Entrepreneurial

Many people are lured into the idea of working from home thinking that they will be able to enjoy leisurely afternoons and a hefty income; trust me, if you are dreaming of easy riches, forget about a home based business.

Even the most lucrative small scale business ideas require hard work and effort from you to turn them into commercial opportunities.

Just like with any other type of job, you need to be willing to invest time and effort in order to reap the rewards. In fact, you will generally need to put in considerable effort before you begin to see your small business endeavor begin to grow and become profitable.

If you simply want to get a jump on the competition then check out my additional post on the best business ideas trending for 2012.

1. Initial investment requirements

The best small business opportunities are often home based businesses because many of these require very little upfront financial investment. There will typically be quite a large investment of time and energy, but the rewards can be wonderful as well.

Choosing the best small business will require evaluating the things you are interested in and having a realistic understanding of what you are good at and what you are capable of doing. It is easy to over estimate how much money/time you can put into starting a small business. A true measure of your commitment and energy level is often indicated by the other projects in your life.

If you tend to start things and not complete them, you might want to consider if you have what it takes to self-motivate yourself. For example, the transport industry is one of those smaller scale industries many try their hand at but it requires dedication and the constant need to provide top-quality service to customers, whether that is a courier service, house moving service, etc.

Having a plan right from the very start is essential. This is critical not only to understanding the financial applications of startup costs, but also focusing in on how you’re going to specialize and stand out from your competition.

2. Gauging how much work is involved

From the outside looking in, it is hard to realize the amount of work many small business owners invest in their businesses. However, even the best small business is going to need a good work ethic.

Not everyone is cut out to be his or her own boss and manager. Some people work better under the direction of someone who can oversee all of the details, while others can see the bigger picture and are capable of accomplishing what needs to be done.

Some of the best home based businesses are those that provide you with a passive income stream. That means they still bring in money without you need to pursue purchasers or be actively involved. A good example of this is building affiliate websites (promoting other peoples products) which allow you to gain commissions on traffic you  send to other peoples products (and the subsequent sales).

If you simply don’t know then try getting in touch with friends or colleagues who run their own businesses. Arrange to have an open and honest conversation with them to find out how much work is involved generally in running your own firm.

Small businesses can benefit from some key common sense best practices which everyone should know

3. Even the best small business opportunities need plans to succeed

The best small business requires a plan with a clear idea of where the business is headed. Whether you choose a home based party-plan or you are an internet start-up business, you need to realize that the best small business ideas are just the beginning.

Flesh out those ideas with a well-defined business plan that outlines exactly where you want to take your business. The more detailed your plan is, the more clear cut your goals will be.

Look for shortcuts or outsourcing opportunities you could take. Don’t however be tempted to compromise your strong sense of ethics in business. Always do business in good faith.

When you have very clear goals and a plan on how you will reach them, your chances of success are much greater.

4. Don’t forget the competition!

Another important consideration is to look at how the best small businesses in the niche or industry you are interested in became successful. You may discover some easy businesses to start, but if you ignore the competition then you may be trying good money away in startup costs with very little chance of a return.

Often times this will mean studying how they were able to attract customers and provide a quality service or product. With the widespread use of the internet, it is likely this means utilizing a website.

Today, many people look online when they want to find something and having one of the best small business websites can be a huge advantage in building a business’ customer base. Developing the necessary strategies to attract new business, while keeping current customers happy, is essential to any successful business endeavor.

REMEMBER: Even the best small businesses have to started somewhere. Focus in on your key ideas and make this into the unique selling proposition. Try to get as much advice from colleagues who start their own companies in order to plan out your own product roadmap & vision for your firm.

Author Rod Dunne...

Blog owner and sole writer Rod DunneI am the owner and sole writer on Product-ivity.com. This is my personal blog detailing troubleshooting tips for small businesses. Posts are based upon 2 decades in consultancy & innovation management within startups/maturing companies.

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