How to Choose the Right Business For You

As a business owner, one of the key decisions you must make is what type of business you want to start and build. The type of business you start will determine the amount of money, time, and energy you put into it. Fortunately, determining your business type is fairly easy. Just look at what you enjoy doing and what you already do. Also, some business types are better than others.

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How to Choose the Right Business For You

As a business owner, one of the key decisions you must make is what type of business you want to start and build. The type of business you start will determine the amount of money, time, and energy you put into it. Fortunately, determining your business type is fairly easy. Just look at what you enjoy doing and what you already do. Also, some business types are better than others.

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Low overhead is the most important characteristic of a business. Most small businesses are sole proprietors, partnerships, or corporations with less than 15 employees and/or lower annual revenue than a typical large business or corporation. Many business owners want to start a business that will cost them the least possible amount of money to start and maintain. The first thing to consider when trying to determine the lowest-overhead business plan is whether or not the business will require any special licenses or permits.

A business that requires little or no special permits can be a great choice for a small business because there is usually very little, if any, overhead to operate. Examples of these businesses include farmers’ markets, sidewalk cafes, bakeries, fruit stands, tutoring, cleaning services, bars/ taverns, restaurants, boutiques, shops, and others. Some small businesses also require no investment in property, equipment, or supplies. Examples include bakeries, tutoring, cleaning services, bars/taverns, and restaurants. All of these examples have low to medium-high net profit margins.

There are many opportunities for business owners with high enough net profits to cover their overhead costs. Examples of these businesses include janitorial services, window cleaning, landscaping, painting, dry cleaning/housekeeping, delivery services, and fast food franchises. Almost any business that has a combination of two or more business aspects can become a profitable business. However, some businesses require extensive start-up costs, significant management overhead, and many long-term contracts.

Business owners who do not want to spend the time it takes to get started on a business should consider starting with one or two examples of businesses already in existence. Small, low overhead businesses typically take less time to start up than larger, higher overhead businesses. Examples of these businesses include franchises, such as McDonald’s, Subway, or Dunkin’ Donuts. Franchisees have the upside of having established names and a customer base. These companies often have franchisee coordinators that help in the initial business startup steps and offer technical support after the business is opened. Many franchisees remain in the franchise system through the next several decades, providing long term, steady income for their staff members.

Another way to get started in a business with a low overhead, high demand, and relatively short initial investment but with long term potential for growth is purchasing a business in a low demand, high value service or product category. Examples include a small hair salon, dental practice, dog grooming business, computer tech support, or general business such as an oil change business. These businesses tend to have lower start up costs than franchises and have the ability to grow over the years with little need for initial management overhead. A service category business does not have a brand name but can still be very lucrative, especially if it is a niche market. The downside is that because there is a high demand for this type of service there are many other business owners competing for the same customers.

The third option, contracting to manage a low overhead, high-demand business is attractive to those business owners with the drive and willingness to manage a business themselves. Contracting to manage a property maintenance or landscaping business can be extremely lucrative. This option allows business owners to invest the time and energy needed to grow a business without having to be involved from day-one. For many this reduces stress and allows business owners to build a strong, self-sustaining business that they can run themselves from home. The downside is that this type of management has a reputation for being slow to develop and may require a significant number of years of trial and error before a successful outcome is achieved. There is also the risk that the low overhead initially associated with managing your own property maintenance business will increase your expenses and lead you into a financial bind once the recession starts to bite.

The final option, franchise opportunities provide a solid financial opportunity for those business owners seeking to manage a profitable small business on their own. Franchises offer an easy way to run a profitable business, providing an established brand name that attracts customers and a comprehensive range of support that include nationwide network marketing. These franchises often require minimal management and advertising costs, and often provide guaranteed profits upfront. For these reasons, franchise opportunities can be extremely attractive to those wanting to start a profitable small business of their own.

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