Small business ownership is more popular than ever, but the road to owning a business that fits your personality and goals can be fraught with pitfalls if you're not fully prepared.
Some studies indicate that most people are interested in owning a small business, yet the number of people who actually make the leap to an entrepreneurial career is much smaller. For many, it is not a lack of business skills that gets in the way, but the failure to adequately identify a suitable business option.
It's crucial not to underestimate the importance of choosing the right business. Imagine trying to run a marathon wearing running shoes that are three sizes too small. That's what it's like to operate the wrong business. Your efforts will likely be doomed from the start simply because you chose a business that doesn't match your interests.
However, selecting the right type of business is only half the battle. Once you've settled on an industry and business structure that is right for you, the next challenge is to find an available establishment that is well-positioned and profitable. This might sound easy, but without doing the proper research it could prove to be a major hurdle to overcome. One of the reasons businesses are sold is because the previous owners failed to do the very thing a buyer hopes to accomplish – make the business continually profitable and able to support their lifestyle. If you don't do your homework, you could find yourself struggling to save a ship that has already begun to sink.
As long as you keep in mind some key points when choosing a business, there's no reason to be discouraged. Thousands of aspiring business owners turn their entrepreneurial dreams into a reality every year. There are a variety of factors that go into the business selection process and, believe it or not, most of them are unrelated to the amount of capital you are able to invest in the business.
The intangibles involved in selecting an appropriate industry and type of business can have an impact that lasts far beyond your first day on the job. Personal interest and passion are non-negotiable elements in a successful business venture.
When the initial excitement of becoming a business owner wears off, you'll be left with the task of actually doing the work, day in and day out, for as long as you own the business. If the kind of work your business does isn't very interesting to you, you're setting yourself up for disappointment and frustration down the road.
A lot of new business owners begin the process by conducting an honest assessment of their interests. In fact, the most successful businesses often begin as a hobby which eventually inspires the business buyer to transition into ownership.Another intangible has to do with the owner's skill set. Theoretically, it's possible to buy into a business in which you have absolutely no skills or experience. The problem is that the business may not be able to endure a lengthy learning curve.
For example, if someone with no previous skills in the salon industry buys an existing hair salon with the intention of getting trained and certified along the way, a major issue would be how the business would survive while the owner learns the ropes. Would other employees fill the gaps, or is it a better idea to work alongside someone else before jumping into business ownership?
As you assess your interests, be realistic about your skill level. If your chosen field or industry requires training, factor it into your business plan from the start and make allowances to compensate for your gradual integration into daily operations.