Last blog I wrote about how important it is for your business idea to motivate you. In this post, I’ll discuss a few of the types of businesses you can start.
Some new business ideas are considered visionary: things that have never been done before. Customers didn’t even know they needed or wanted what your business offers. While visionary ideas (e.g. FaceBook, Apple Computers, Uber Inc.) can bring enormous success, these ideas are considered high risk or have a higher potential to lose money. You may need multiple businesses and ideas over time to find the one idea that works, and it may take a long time to develop your product or service to the level of quality you would like.
A faster and lower risk way to go into business is to open a franchise. This allows you to take an idea that is already successful elsewhere (i.e. McDonald’s, Pizza Hut, Ace Hardware Inc, Super Cuts, etc…). By opening a franchise business, you get the name and logo of a business that many customers already recognize. Also, basics like accounting programs and order entry tools will be ready immediately. On the downside, opening a franchise may require a large up-front financial investment and additional financial resources. Also, you may have much less control over how you can expand or grow your business.
Finally, your idea can be something unique, but in an area customers are familiar with: opening a restaurant, selling crafts at markets, a hair salon, an auto repair shop, and so forth. These types of businesses make up most small businesses in America. Some of these ideas can be a business you do on the weekend or can become your full time job. Keep in mind some of your businesses may require finding an investor, getting approved for licenses, and/or having government inspections. Remember, before moving forward with your business, it’s critical to have a plan. With business and marketing plans you can get feedback and test ideas before making major commitments like signing a lease for office or a store space.
Next time I will cover some of the elements of a business plan. Until then, think about how quickly you want to start your business, how long it would take for your business to become profitable, and lastly how much time you can really put towards your business.
Sean Dougherty MBA, BSIS, CMMI Associate
Sean serves as a Project Prosper volunteer financial literacy instructor, and is a member of the development committee that plans Project Prosper’s annual breakfast fundraiser. He has 20 years of experience in information systems and operations as researcher, developer, architect, and manager delivering services at a global scale. He is also a doctoral student in business studying cross-functional business issues.