By Nilooka Dissanayake
This is a question a lot of people ask of themselves. It is not an easy question to answer because many factors need to be considered before finding an answer. It is a question we should neither ask nor answer lightly. This article and the next will provide you guidance in your quest of discovery.
Every day we see new businesses set up shop. We also see a lot of businesses close up. If we consider most of the start-ups, we can see that their business ideas are not new at all – it is almost always a borrowed idea. A retail shop, a take-away outlet, a fashion boutique, a communication center, a print shop or whatever it may be, these entrepreneurs are trying to enter the business world with an already tested business idea. Hundreds of people have carried on these businesses before. Then why do most small businesses fail within the first few years?
There are many reasons for business failure. But, surely one of the most basic reasons would be the selection of an unsuitable business idea. Therefore, as an aspiring entrepreneur, you have to not merely find a business idea, but one that is suitable.
In finding a suitable business idea there are two main things to consider. The first is whether the business idea is suited to you. The second is whether it is fulfilling a need of an identified group of customers, or a market and can be turned into a profitable business. In this article, we will talk about finding a business idea that is suitable for you. Next week, we will see how to find a business idea which fulfills the need of a group of customers. Some people may disagree as to which should come first, but it is an argument similar to whether the chicken or the egg came first. After all, even if you can find a great business idea with a lot of potential, will you go into it if it does not suit you?
It is critical for the business idea to be suited to you, your aspirations and your lifestyle. This is because you, as the entrepreneur, are the most important asset of your small business. You will, most likely, do the planning, set it up, carry on the operations, find the customers, attend to the record-keeping and a multitude of other things that need to be done. If you are not doing these yourself, you still need to delegate these duties to someone else. Therefore, it goes without saying that you need an intimate understanding of the operations of your business. So, rather than venture out into doing something you know nothing about, it is wiser to base your business on some aspect that you are familiar with. This way, you can avoid the many pitfalls.
So, if you want to find out a business idea, start by asking yourself these questions:
1. What are the things that I can do better than most people?
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This is a good way to start. If you can do something better than most people, then you have an edge over them. You’ll do better at it than they and your costs and mistakes will probably be less than theirs. For example, think of sewing or typing or making cake.
2. What skills do I have? What are my areas of competence?
If you have a particular skill or competence in some area, why not use it? This is why we see a lot of sales people going into business – they are basing their business on that selling skill they acquired in a previous business and of course the knowledge of a particular industry.
3. What do I like/want to do?
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This is of utmost importance. You have to like what you are doing. If you do not like it, you will find it very hard indeed to make a success out of your business. Running a small business, be it home-based or otherwise, can be a trial at times. You need the ability to withstand work pressure, to work for long periods of time when required, to set your own goals and targets and to achieve them without supervision. If you like what you do and enjoy these aspects of work, it will be easier for you to work hard at success.
If all you get out of your business is money, then is it worthwhile bothering? If yes, for how long are you ready to sustain that effort?
4. What things are suitable for my aspirations?
A lot of people quit their jobs and go into business. Most of the time, the monetary benefits from their business are less than what they could have earned at a regular job. This is because they value the independence, the work itself or some other aspect of being their own boss. In the same way, what are your aspirations? What business ideas will help you to fulfill those aspirations?
5. What type of business is suitable for my circumstances?
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Your aspiration might be to travel around the country and to see the world. You may possess all the skills required to become a free-lance nature photographer or a travel guide and some experience. But, if you are a mother of a toddler, are you going to take up those opportunities and be away from home for long periods of time? Even if you want to, what sort of a situation will that create in your home? Can you make a business out of it? There are many choices we have to make. And they, in turn, will make way for a whole lot of other issues. You may need to clear all these issues and make certain choices if you want to find a suitable business idea. So, especially if you are thinking of a home-based business, consider what options are open for you. This requires you to take a very realistic look at your own situation. The Sinhala publication “Gruhastha Vyaparayak Arambamu” – or Starting a Home Based Business deals at length with this issue.
6. What is the investment you are ready to make?
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At this stage of searching for a business idea, we refer more to investment in time and commitment than to money. How much time, energy and commitment are you ready to make in your new business? The type of business you go into should be selected in accordance with your requirements. How long do you wish to stay away from home at a time? How often do you need to go out if you select a particular type of business? Where will you have to go? Whom will you have to visit? Some businesses do not require you to go out much. Others do.
Some of you who are planning to start a business from scratch may be lucky enough to take the approach described in this article. But, others may not be that lucky and may have business ideas thrust upon them which they either need to take up or leave aside. In such a situation, it is good to remember that we can change, adapt and develop new skills and areas of competence. Whatever your situation, a successful small business or home-based business is created when there is a match between you, your business idea and the market.
- Starting A Home Based Business: Adapted versions of a series of 25 Articles
By Nilooka Dissanayake, published in the Ceylon Daily News between 2000 and 2001.
- ©Nilooka Dissanayake. The contents of these articles may not be reproduced in any form without the express written permission by the writer.
- The Sinhala publication mentioned above, “Gruhastha Vyaparayak Arambamu” is one of a set of six books published by Athwela (Private) Limited, the publishers of Athwela Vyaparika Sangarawa, the Sinhala business journal targeted at educating the small and medium sized business operators. The other books in the set, all published in Sinhala, are titled Starting a Small Business, Marketing for the Small Business, Financial Management for the Small Business, Managing the Small Business and Record keeping for the Small Business. At present, they are out of print.
This is a great article, as it describes perfectly that you should start a business within your skillset and passions.
In next step you look for the interception between these skills/passions and opportunities in the market.
How can you do this?
You can do it systemtically with data from the Internet: Most Online Marketplaces provide data for their customers to help them with their shopping decisions. With these data you can find out what products already work, what the earning potentials are and how much competition there is. You can enter the niche then, or niche down.
The data is available for free in metrics like price, number of ratings, average rating, number of products. Everything is on the product pages/search results. You must extract the data from there into a worksheet and analyse it.
Thanks Jens! I was unwell at the time you posted this comment. So did not get back to it till now.