As an aspiring entrepreneur, one of the trickiest things you’ll need to do is “how to decide what business to start”. With so many options, figuring out what’s best can take time and effort. Fortunately, with the right strategy, it’s easier.
Here’s how to get started.
5 Steps for How to Decide What business to start.
Step 1) Assess Your Skills and Experience
Generally speaking, think about what is the right business for me that aligns with your current capabilities and gives you an advantage over others. You can leverage what you already have, putting you on a quicker road toward success.
The issue is that many aspiring entrepreneurs struggle to take stock of their existing skills and experience. Fortunately, some shortcuts make the analysis easier to decide what business to start.
First, it’s essential to understand what you’re trying to identify. In many cases, your hard skills are the easiest to recognize. Essentially, hard skills are your technical capabilities, such as your proficiency with specific software solutions, pieces of equipment, or set processes. In many cases, hard skills are developed through formal learning or various forms of training, including traditional classes, upskilling opportunities at work, and similar pathways.
Secondly, along with technical capabilities, you want to assess your soft skills. Typically, soft skills are traits that assist you with navigating workplaces, such as adaptability, patience, and attention to detail. More often than not, soft skills aren’t formally trained. Instead, they may be innate or learned slowly throughout life.
Both hard and soft skills play a role in your success. Since that’s the case, you want to assess them both as you work to find a business option that aligns with your capabilities. One simple way to begin is by reviewing your last professional resume or LinkedIn page. You can also check job descriptions for your past roles or job ads that match those positions. Analysis of your skills will make the decision easy to answer the question of what is the right business for me.
Step 2) Identify Your Passions
Overall, 33 percent of small business owners work more than 50 hours per week, and 25 percent cross 60 hours per week. While that’s a lot by any standard, it feels harder if you’re not doing work you enjoy.
Ideally, you want to pick a company type that aligns with your passions. While you might not like every task you handle, this makes even heavy workloads seem more manageable. People who enjoy their work are more optimistic, learn faster, make better decisions, make fewer mistakes, and are more motivated. In addition, happiness makes you more resilient, allowing you to navigate stresses and challenges with greater ease. Passion analysis will help you in the business selection.
If you aren’t sure about your passions, use a two-fold approach. First, consider what skills you enjoy using or the type of tasks you like tackling. Second, think about goals, missions, and values that motivate you. Then, find a way to bring a bit of each to the table when you choose a kind of company to launch.
Step 3) Consider Your Time and Resources
As you start narrowing down your choices based on your skills and passions, you’ll want to factor in your time and resources. Begin by considering the lifestyle you want and where your priorities lie. By considering time and resources you can decide what is the right business for me as an aspiring entrepreneur.
For example, is work-life balance a must? If so, you might need to forgo businesses that have massive time commitments. Would you prefer not to spend every hour at a computer? If so, you may need to choose a more active company, that includes client visits, or otherwise gets you out of your home office.
By focusing on options that fit your lifestyle, running the company won’t feel like as much of a sacrifice. As a result, you can reduce your odds of burnout.
After that, it’s time to look at the resource side of the equation. Generally, this includes your finances and the tools, equipment, or other assets that you already have at your disposal. It’ll help you determine which businesses are genuinely affordable based on what you have to spend and what you’d need to buy.
As you identify areas where you don’t have all of the right assets, don’t assume they’re a poor match right away. Instead, estimate what it costs to acquire what you’d need. As you research options, you may find free and low-cost tools that can cover a slew of gaps.
For instance, a Facebook ads maker lets you create fantastic ads quickly and efficiently. You can choose a Facebook ad template that lets you simply choose an initial design, add your logo, update the fonts, and adjust the colors. That way, the ad aligns with your branding, giving you a powerful way to spread the word about your business without breaking the bank.
If the cost of launching a particular company is too great, even with free or low-cost tools, you may want to scrap it from the list if a lower-cost option is also a good fit. However, if that isn’t possible, you may need to look for opportunities to boost your finances. Loans, private investors, or crowdfunding campaigns could all work, so see if one of those approaches lets you pursue the business of your dreams.
Step 4) Analyze the Market
At this point, you likely have a concise list of options left. That means it’s time for some research.
Generally, you want to determine if there’s enough demand for your product or service and if a suitable market share is capturable. You can learn more about your target audience and overall demand with a market analysis. This includes the market size, prospective customer shopping, and buying habits, acceptable price points, and more.
With competitive analysis, you can determine where other companies sit in the market. Along with assessing how much market share competitors have and how they position their branding, you can identify their strengths and weaknesses. That way, you can figure out how to differentiate yourself to secure sales. Market analysis will help you in deciding what business to start.
Step 5) Create a Formal Plan
After the market analysis of deciding business, it’s time for a formal business plan. That gives you a framework for the company, ensuring you have every key point assessed and a solid strategy before moving to launch.
Typically, you’ll start with an executive summary. That gives a basic overview of what your company will accomplish, including details about your mission, offerings, and leadership team. In most cases, you’ll also outline some primary financial data, including an overview of your growth plan.
Next, it’s time for a detailed company description. Along with insights about your target market, discuss the problems your product or service addresses.
Then, it’s time for the market analysis, outlining the information you gathered in your research. Follow that with an overview of your business structure and operational strategy before diving into your product or service line.
After that, you want to provide an overview of your marketing strategy. Cover both customer acquisition and retention, offering a detailed look at your proposed sales funnels.
Finally, dig into any financial projections. Usually, you’ll want to do a cash flow assessment as a starting point. Then, discuss your operational budget and forecasted income, ensuring you thoroughly explain your numbers.
Once that’s done, you’ve got your framework in place. If you feel confident and excited about it all, you’ve likely chosen the right business for you. Explore The Business Goals for more startup guidance.
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