Budding Entrepreneurs: What Type of Business is Right For You?

[Natalie Jone]

Businesses come in all shapes and sizes, from mom-and-pop run corner shops to gigantic corporations that span continents. As a budding entrepreneur, you’re spoiled for choice when it comes to what you can potentially do. Of course, not all business ventures are practical to launch – or profitable.

Choosing the right kind of business – something that rewards your investment properly – requires solid market research and asking yourself the right questions. AXJ Global News Network offers this mini-guide below to help you make an informed decision:

Understand the types of businesses you could start

Some businesses require more expertise and resources than others. It’s a good idea to start by informing yourself about your options:

- Businesses by category: You could start a small business, a big business, a buyable (made-to-sell) business, a lifestyle venture, or a scalable business. RingCentral explains these options in detail.

- Business models: Your profit-making avenues are numerous. Novo offers some examples: Subscription, affiliate, brokerage, franchise, and advertising.

Assess your skills and experience

Playing to your strengths can make it easier to set up a profitable venture. First, tabulate your marketable skills, both the technical and non-technical ones. Second, look back at your work history and education. Are there any businesses that align well with your skills and experiences? Could you do what you’ve been doing previously, but at scale? If you’re unsure about how to assess your skills or experience, you can take personality tests, aptitude tests, and career tests.

Gauge your resources and available time

Starting a business typically takes at least a few thousand dollars. Furthermore, experts recommend that you have at least a few months of operating expenses saved up, which you may need to use until the business can find its feet. Finally, running a business can be incredibly time-consuming. Self-made entrepreneurs recommend investing 18 hours per day for the first year. While you can get help with funding, you’ll have to supply the time yourself.

Research the market demand

Market research is non-optional. It helps you identify customer needs and wants, which determine the viability of your venture. Your market research should include market size, profitability, consumer characteristics, key segments, trends, and customer feedback. Also, you should run some numbers based on your findings to determine your potential profitability.

Choosing the right business structure

By default, businesses in the US are sole proprietorships. Changing to a different business structure – such as an LLC – can be advantageous. It can help you attract investors, limit your personal liability, bring tax benefits, offer extra flexibility, and reduce your paperwork burden. You can use a formation service to quickly file the paperwork instead of doing it yourself or via an expensive lawyer. States have different rules around LLC formation. Check the local rules before you move forward.

Write a business plan

At this point, you may have shortlisted a few business ideas. Writing a business plan can help you double-check the viability of each one, as well as develop a concrete roadmap for getting started with any. A business plan contains critical details about your venture, such as product development, financial projections, growth goals, and information on business processes. A good plan will help you avoid mistakes as well as point out holes in your vision.

Going back to school for a business degree is an option

Setting up a business and running it requires serious expertise. While you could learn on the job, like many entrepreneurs do, going back to school for a business degree may be a worthwhile investment. You can pick up valuable skills and industry knowledge from experts. By implementing a bachelor of business degree – that is, the knowledge gained – you’ll be more likely to be successful with your venture. If you pick an online program, you can learn in your spare time while running your business or tending to family obligations. If you choose an online school, make sure it’s accredited and offers competitive tuition rates.

Conclusion

Starting a business has never been easier. Using digital tools and services, you can get up and running within the day. Seed money is easy enough to come by, and you can attend online school to conveniently pick up relevant industry knowledge. Just make sure you choose the right idea and back it up with a solid business plan.

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