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.