On the top of a blank sheet of paper, write an activity you like to do (make this the heading). Do a separate page for each activity or interest you have.
On those same sheets list as many businesses you can think of that are related to that activity.
On the same sheets list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could do.
Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawnshops, auto repairs and fabric stores.
Let’s assume you end up with three potential businesses: towing service, selling used cars and auto repairs. You can now make a comparative evaluation using the following check-list (or better still your own checklist) with a 1-10 scoring system:
|Can I do what I love to do?||6||3||10|
|Will I fill an expanding need?||8||5||10|
|Can I specialize?||7||8||10|
|Can I learn it and test it first?||9||8||9|
This kind of analysis can help you gain objectivity in selecting your business.
How to Evaluate a Specific Business you have in mind.
Here are some questions to help clarify your thoughts:
- Is it something I will enjoy doing?
My favorite activities are: __________________________
I like to serve people by: ________________________________
- Will it serve an expanding need for which there is no close substitute?
- Can I be so good at a specialized, targeted need that customers will think there is no close substitute?
- Can I handle the capital requirements?
- Can I learn the business by working for someone else first?
- Could I operate as a hollow corporation, without a factory and with a minimum number of employees? (“Hollow corporation” refers to a business where everything is “outsourced,” meaning you would subcontract manufacturing and packaging to outside sources. )
- Is this a product or service that I can test first?
- Should I consider a partner who has complementary skills to mine or who could help finance the business?
Once you have decided what business you want to start, do this:
Make a “for” and “against” list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the “for’s” and on the other all the “against’s.” Sometimes this will help clarify your thinking.
Write down the names of at least five successful businesses in your chosen field. Analyze what these five businesses have in common and make a list of reasons that make them successful.
Talk to several people in your intended business. Don’t be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls: better now than after you open your doors. Take notes if possible. Write down the information as soon as you can.
Analyze the competition that are not doing well and write down the reasons.
Get Completely Qualified
Before you start, get completely qualified:
- The best way to become qualified is to go to work for someone in the same business.
- Attend all classes you can on the subjects you need, for example: accounting, computer and selling.
- Read all the appropriate “how-to” books you can.
- Don’t be afraid to ask questions or seek help from the most successful people in your intended business.
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