Small businesses may be defined as those with 500 employees or fewer, but there’s nothing “small” about them. Small businesses account for 99.9% of all enterprises in the U.S., with an estimated 33 million companies consisting solely of the business owner.
If your dream is to join the ranks of small business owners, you may have already spent a great deal of time thinking about the type of business you would like to open. Before taking the plunge, ask yourself the following questions. By the time you’ve answered them, you’ll know whether you’re headed in the right direction.
What are my interests and passions?
Evaluate your interests and hobbies. Is there a job you would happily take on, even if you weren’t getting paid for it? Naturally, you want to earn a living, but remaining enthusiastic about a job you don’t love is tough. Think about your natural talents and whether they can help you start a business.
Is there a market demand?
Research the market to determine business opportunities, including the demand for the products or services you would be selling. Do you see any emerging trends or niche markets that offer an opportunity to get in on the ground floor and grow your business?
What skills and experiences do I have to offer?
Consider your most marketable skills. Can you repair electronics practically with your eyes closed? Are you great with children or an especially strong writer? You automatically have a competitive edge when you choose a small business that meshes with your skills.
What financial resources do I have available?
Getting a new business off the ground typically requires an initial investment of some kind. Consider your personal finances and the resources you have available to you. Do you have enough to get a business up and running, or do you need to explore financing options? If you require a business loan, how comfortable are you with taking on debt?
Honestly assessing whether you’re willing to enter into a new enterprise with debt will help you determine which business you’re most interested in. For example, buying a business franchise could easily cost $100,000 or more, while start-up costs associated with a janitorial or cleaning service average around $3,500.
RELATED: Best Business Credit Cards
What do I want my life-work balance to look like?
Different types of businesses require different time commitments, with some having more irregular hours than others. One example of this is a plumbing business. You could easily be called out at night or over a holiday weekend because someone’s basement is flooding. If you want clear-cut set hours, take that into consideration as you consider the best business type for you.
Once you’ve narrowed it down
Once you’re certain of what you want to do, don’t be afraid to seek advice from mentors and other entrepreneurs who can help you avoid the pitfalls of being a new business owner. One good place to start is with the Small Business Administration (SBA). Among the SBA’s programs is a program called SCORE. SCORE offers free mentoring through 300 chapters nationwide and online via video chat. With more than 10,000 volunteer mentors, SCORE is rich in expertise.
While SCORE and programs like it can’t promise that you’ll have $1 million in your bank account after your first year in business, it can give your odds of success a little boost.
Any time you can settle on a business that will bring you joy, provide financial support, and serve the needs of others, it’s a win-win situation.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.