Hi,Let's establish the basis for your business start-up planning efforts:
The Starting point
That would be you. Define what type of business you would really like to start!
Let's walk through the thought process.
When deciding on a business, you will want to find one that satisfies your goals and meets your objectives.
Start by reviewing your own abilities, knowledge and experience.
Do you want a business that will take advantage of those or are you looking at it from the perspective "I want to go in a new direction"?
I believe it is always better to play to your strengths, abilities and experience but going in a new direction is OK if you have the core skills and capability to effectively apply them in a business that may not be one you are experienced in.
Give some thought to the following:
What type of business are you interested in?
Do you want to start a manufacturing, distribution, service or retail business?
Each has its own unique pros and cons.
Manufacturing businesses (and distribution businesses to an extent) tend to allow you to build up nice solid assets on the balance sheet with tangible value. Retail and service businesses tend to have more intangible assets but also are less capital intensive.
THIS IS VERY IMPORTANT! No matter the type you will want to focus on a business in a solid well-established industry that has a history of steady dependable growth. Don't start a business in a declining industry.
Important Tip
I would focus on an established industry that is in an uptrend (one place of many where you can find this data online is):
http://www.ita.doc.gov/TD/Industry/OTEA/O
TII/want2_industry.html. Where:
the business and industry shows growth over the next 5 years
the industry is fragmented, where the companies in the industry tend to be smaller and medium sized businesses
preferably an industry where your background and experience will help you in the business
Do you want to run the daily operations yourself or do you want to have a general manager to take care of that for you?
One of the worst things you can do is start a business that becomes the worst job that you ever had.
In general I would tell you to avoid businesses that are going to require you to be the main sales person for the business if you are not comfortable in a sales role. Or a business that requires you to do some job or perform some function that you do not like or cannot perform.
There are cases where it makes sense, instead of starting a business ... you buy a business or businesses that have a team in place to cover all the daily management tasks necessary for the business to run, prosper and grow. Allowing for those management costs under your ownership is something you will have to factor into the viability of the deal.
Just remember that you have to identify what you want so that you know what to plan for and allow for that when you are evaluating what type of business to start or buy. You must have clearly identified objectives, wants, desires and criteria in front of you when you get started so that you do not get side-tracked and waste your time.
