“Find something you love to do and you’ll never have to work a day in your life.” -Harvey Mackay
Regardless of whether you choose to remain an independent business owner or become a franchisee, research is the single most important activity in making your decision. Without adequate information, you may end up making the most costly decision of your life.
Four Questions to Ask Yourself to See If You're Ready to Start Your Own Business
- What business would you enjoy?
- Is there a market?
- Can you afford it?
- Can you make enough money to make it worthwhile?
1. What business would you enjoy?
Sometimes people start a business because they think they’ll make a lot of money, only to find out that they do not enjoy the business. The adage “know thyself” certainly applies here. You should start a business in an industry that you will enjoy for the next 10 to 15 years.
- What do you like to do? (interests and hobbies)
- What do you know how to do? (experience)
- What do you do well? (special skills and talents)
- Which industry (or industries) involves your interests and use your skills and talents? (For ideas, refer to the franchise industry listings in IFA's Franchise Opportunities Guide)
- What products or services could you sell in this industry?
- Would you rather sell a product or service?
- What products or services would you like to sell the most?
2. Is there a market?
All successful businesses must:
Satisfy a need or Solve a problem or Respond to a trend
Before starting any business, determine if there is a market for your product or service by conducting market research. Questions to ask include:
- How many potential customers are in your area?
- Will your product or service sell?
- What need does it satisfy?
- What problem does it solve?
- What trend or fad does it address?
- What should the appropriate pricing be?
- Who are your competitors?
- How many competitors do you have?
- What do they offer?
- How will your product or service be unique?
- What marketing niche can you capture?
3. Determine if you can afford to start a business.
Make profit potential your most important consideration. In order to start a business, you have to have money! In order to stay in business, you have to make money! The single most common reason new businesses fail is that they did not have enough money to begin with! Don’t forget the old business adage: “It takes twice as long and costs twice as much!”
Costs to consider:
Estimate your start-up costs using the below items as a reference:
- location design and construction
- professional fees
- equipment and fixtures
- opening inventory and supplies
- pre-opening labor
- opening advertising and promotion
Estimate how much working capital you will need (the money you will need until the business becomes profitable – include your living expenses, if necessary), paying particular attention to:
- interest on a loan, if applicable
Brainstorm where you might be able come up with money:
- savings and investments
- a partner
- selling personal assets
4. Determine if you can make enough money to make the venture worthwhile.
Estimate the profit potential for the business using the formula:
- profit = income - expenses)
Think about the amount of time and energy it will take to make the business successful. Make a decision as to whether you think you can make enough money to make the entire venture worth your time and energy.