Choosing what product or service your new business will sell is all too often a 'knee jerk' reaction and not a careful consideration of the facts.
Why? Because you will, quite naturally, start a business about something you are doing at present: be that you are currently employed by a company (and you want to branch out on your own with a similar product or service) or you have agreed to join a friend or family into a new venture that you are not 100% sure about.
The problem with either of these new business entry routes is whether or not you will be able to use your personal strengths and business experience to the full: day in, day out.
Having a few customers and contacts from your old firm is a traditional route to a new business, and is of course a good reason to be hopeful. But, if you asked yourself what type of business you are best suited to start, it is unlikely that you would always choose the business you worked for as an employee.
Another way into business is buying a local business that is up for sale: buying a business is a delicate process so be well prepared.
Most successful small business owners and entrepreneurs would be successful in a number of different businesses that they had no real knowledge or experience of. Why? Because they have a broad understanding of all aspects of business, they have total commitment, sufficient financial understanding, and play to their strengths in their daily dealings: of course, if they once sold vacuum cleaners and they worked for Hoover in the sales and production departments, what a bonus!
The tale goes, that if an English and Asian person wanted to start a retail business in their local town, the English person would walk down the high street, see that their was not a local shoe repair shop (and they having been a shoe repairer) would open up a shoe repair shop. The Asian person would walk down the same high street, and on seeing two newsagents they would open a third newsagent.
The new newsagent owner knows that there is a need for a newsagent as two have survived. They also know that if they can give a better service than the other two newsagents, one, and possibly (hopefully) both of them would have to closedown: with the new newsagent buying the goodwill (the other newsagent had better watch out!).
Another way of seeing this: why will your business do better? For example, if you plan to open a local shop in a competitive area, if you can't beat competition on price, how else can you do it? Could you provide excellent customer service and encourage customer relations to pull in customers? That should get you starting to think.
So what should all this tell you? Understanding what makes you and a business tick, together with not underestimating the culture associated with small business ownership are essential to a business being successful: not continuity of experience and knowledge. Some of the greatest gardeners have lost their life savings on a nursery that turned out to be an oasis; a 20-year British Gas veteran lost his house due to that gas fitting business going bang; that great salesman who sold ice to the Eskimos could not compete or sell ice cream in his local town.
Finally, have you thought about the company that employs you at present? Is it possible that the reason you feel you can go into competition against them is because they have lots of business, happy customers, great work colleagues and a growing business? If so, add to the above list the fact that your boss is a natural business owner in his chosen element, and you have not seen the boss defend his territory, yet!
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