5 Steps To Figure Out What Kind Of Business To Start

5 Steps To Figure Out What Kind Of Business To Start
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Do you dream of having your own business? Being your own boss? It can be a pretty amazing experience! Having your own business puts you directly in charge of your future, and the only limit truly is your imagination! Of course, before you can be the next big name on the cover of business magazines, you have to figure out what kind of business you want to start in the first place! Here are 5 Questions to Help You Figure Out What Kind of Business to Start.

1. Where do you want to work?

Figuring out where you want to work is one of the most important questions to ask yourself when figuring out what kind of business to start. You really only have two choices: at home and not at home. If you want the lowest startup costs, you'll want to start your business at home. In that case, you either work online (using online marketplaces, Dropbox, Skype, etc.), or use your home as your office where you meet with people. Of course, some business are better suited to having their own location (especially if you need to work directly with your clients/customers) or may require a separate location by law, so depending on what you're planning to do, the choice may already be made for you!

2. Do you want clients, customers, or fans?

To get money you have to provide something to other people. But whether those other people are considered clients or customers really changes what kind of business you run! Clients are people you work with to provide a custom service, like creating custom logos for people. Customers are people who buy things that are already created, like selling design assets on a marketplace site like Creative Market. You could also have fans, which are people who support a business through viewing ads, clicking affiliate links, and otherwise supporting someone/something they like (blog readers and YouTube subscribers are fans). An active kind of business has clients, and a passive business has customers or fans. Which leads to question #3...

3. Do you want an active or passive income source?

A business that is an active income source requires you to do something that directly provides you with money. Like being a wedding photographer and being paid for 100 photos. A business that is a passive income source requires you to do something, then wait for it to provide you with money. Like taking stock photos and posting them for sale online. Unfortunately, passive income has been paired with get-rich-quick schemes a lot in recent years. But actually, both kinds of income sources are very valid! The pros of active income are that you get money faster, and you know how much you'll make per job. The con is that you're limited by how much you can work/how much you can charge (there are only just so many hours in a day). The pros of passive income are that you don't have to actively be working to make money, and technically there is no limit on how much you can earn. The con is that it can take a while for a passive income sources to start making a decent amount of money. So when you're trying to decide what kind of business to start, make sure you figure out what type of income source you want, too!

4. How much can you spend to start your business?

The more you can pay for startup costs, the bigger your business can be from day one. And some businesses, especially ones that require expensive equipment or licensing, may by default have high startup costs. If you don't want to/can't pay a lot to start your business, you have a few options: 1) change your whole business idea, 2) wait until you've saved up more, 3) look for investors or take out a loan, 4) tweak your business idea so that your business grows into your initial plan. A good example of #4 is wanting to run a restaurant. If you create a food truck first you'll gain a lot of experience and can save up your profits to eventually buy an actual restaurant building. And even better, when you do start that restaurant you'll have name recognition and an established social media presence because of your food truck!

5. What are you interested in?

Of course, you can't figure out what kind of business to start without considering your interests! By choosing to start your own business, you've committed to doing something that's pretty challenging. So you'll definitely want to choose an industry you're legitimately interested in, not just something that seems financially viable. Though you will want to consider the health of the industry you're interested in, to keep from hopping on a sinking ship! Also, consider if you'd still be interested in the industry/activity if you had to engage in it every day. Some things that are fun as hobbies become tiresome when you start doing them 9-5, 5-7 days a week.

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If you carefully consider these questions, they should help you decide what kind of business to start, or at least narrow down your options!

 

What industry would you like to start your business in?