Nellie Akalp is CEO of CorpNet.com. She has formed more than 100,000 corporations and LLCs across the U.S, building a strong passion to assist small business owners and entrepreneurs in starting and protecting their business the right way. Visit Nellie’s free resource center, follow her on Twitter @CorpNetNellie, Like CorpNet.com on Facebook and add CorpNet to your Google+ circles.In these days of economic uncertainty when layoffs and unemployment rates dominate the news, the idea of starting a business no longer seems all that much riskier than the traditional nine-to-five office job.
Now that you’ve decided to take the plunge into entrepreneurial life, do you know how to choose the type of business that’s right for you? What industry and business would make the best use of your specific abilities and assets? Here are six tips for selecting the business that’s right for you:
1. Align Your Strengths and Interests
Not sure where to focus? Let past experiences be your guide. Maybe you spent six years running marketing programs for a legal firm. Maybe you’re famous for throwing the most creative birthday parties for your children. Consider all previous work experience and hobbies, and think about how you can parlay that into a successful business.
Create a list of skills that covers what you’re good at and areas where you’re a subject matter expert. Then list out the things you like to do. Compare these two lists and see if any patterns emerge, or point to any business type that aligns both your strengths and passions.
2. Don’t Worry About Reinventing the Wheel (Just Make a Better One)
Worried that your business idea isn’t original enough? Many first-time entrepreneurs make the mistake of thinking they need to blaze a new trail to be successful. Yes, the market always needs innovators, but a thriving business doesn’t necessarily have to be disruptive. Think about it. Starbucks wasn’t the first company to sell coffee (even expensive coffee) and will hardly be the last.
Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. My husband and I entered a very established and saturated market, but have been able to differentiate our business by bringing a personal, customer-centric, small business touch.
3. Take the Dinner Party Test
OK. Imagine yourself at a cocktail party, Tweetup or other networking event, and you’re asked that inevitable question: “So, what do you do?” Think about how you’ll respond with each potential business option. Are you proud and excited to describe your new business? Or a little embarrassed and looking to steer the conversation elsewhere?
Playing out this scenario can help you uncover your true feelings about a potential business idea. Not every great business is going to translate well for the cocktail crowd (and that’s OK), but being proud and passionate about your venture is an important key to success.
4. Match Your Funding Situation
When considering business options, you’ll need to be harshly realistic about your financing. The majority of startups fail because they don’t have enough capital to power through the early days. If you don’t have enough capital to realistically support your business and personal financial needs for at least six months to one year, you should consider another business option.
There is some good news on the funding front. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, jumped 18% in January compared with a year ago. This marks the index’s 18th consecutive double-digit rise.
5. Fit Your Lifestyle
If you want to jump into the entrepreneurial game but aren’t quite sure what the business should be, chances are you’re looking for a specific lifestyle. You need to make sure your new business will fit the kind of life you lead, or wish to lead.
For example, if you have family obligations, consider how much time you can spend away from home. If you’re looking for the flexibility to work from a tropical beach one week and the ski slopes the next, make sure you start a business that can be managed virtually. And keep in mind that as a business owner, you may no longer be stuck in a cubicle all day long, but you may still need to be chained to your laptop or phone.
6. Do What You Love, But…
We’ve all heard the saying “Do what you love and the money will follow.” That’s not exactly the case. Yes, passion is important. But in order to turn your passion into a profitable business, you have to fill a need that others are looking for. I happen to adore sitting on the beach, but I’ve yet to translate that into steady income.
Remember that the market isn’t necessarily concerned if you are fulfilling your lifelong dream. Customers spend money on products and services that fulfill their own needs and desires. To turn a profit, focus on how your passion can make a difference to others.
In short, when deciding what business to start, be sure to consult both your head and your heart. Then buckle your seat belt and get ready for an incredibly exciting, tiring and always rewarding ride.
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