Not Sure Which Type of Business Is Right For You?

Not Sure Which Business Is Right For You?

Starting a business can be a lot of fun if you know what you’re doing, but it can be wrought with tension if you’re unsure about something as basic as what kind of business you’re going to have. Even if you have an idea about the industry you’d like to work in, you may be unsure as to the specific type of business you’re going to start.

Deciding which business is right for you can be made a little easier when you’re willing to put a little consideration into the kind of business you’d like to start and the way you would like to stat it. Here are a few things for you to consider when you’re looking to start a business.

What Kind of Customer Are You Comfortable With?

Selling is all about being able to connect with your potential customers on a personal level, according to Entrepreneur. This is why you need to pay attention to the kinds of customers you want to work with. If you have a certain kind of hobby or occupation you can relate to, this can help you to determine the kinds of customers you want to work with.

Knowing the kinds of customers you want to work with, you can start to identify the business that relates to these customers. If you can relate to customers who have an interest in golf, you may want to start a business that has something to do with the golf industry.

Your business can be either, to produce golf equipment or to provide services to those in or around the golf industry. Attorneys, like those at LegalZoom can help you to determine the right kind of business and business type for you to start. This way, your investment in a new business will actually make sense.

Take a Look at the Competition

It’s always a good idea to know what your competition is no matter what business you’re looking to start. If you can identify a hole in a market, you’re going to have a much easier time of seeing a return on your investment than you will in a highly competitive market.

For instance, opening a Mexican restaurant in a neighborhood with three Mexican restaurants don’t make as much sense as starting it in a neighborhood with no Mexican restaurants to compete with.

Also, if the competition has a bad product or service, you can compete by offering a better product or service to those who want it. Make sure you have an edge when you’re looking at getting into business or you’re going to have a tough time of even breaking even. You can conduct your own research or you can hire a professional to conduct your market research for you.

Make sure the research is in-depth, so you know all about the market share and the specific customers each of the businesses are targeting. It’s possible your business can market a product already in the market, but focus on a niche customer in the market.

Choose a Business Structure

When you set up your business, you’re going to need to have a specific structure to the business. The main types of business structure you can choose from, according to the Small Business Administration (SBA), include Sole Proprietorship, Limited Liability Company, Corporation, and Partnership. These all have specific legal structures that protect you in different ways.

The structure that offers you the least protection in case something happens to the business is Sole Proprietorship. However, depending on what you want to do with the business, this may make the most sense to you. It’s best to sit down with a legal professional to discuss the different types of structures and how you want to move forward with the business to determine which one is right for you.

Determine Financing Options

Starting a business would entail careful business planning, which includes identifying your financing or funding options. With the help of a financial analyst and accountant, you’ll better understand the best funding option to start your new business.

Here are the different financing options for startup businesses:

  • Small Business Loans: This funding option is typically offered by banks and other lending institutions. Being approved for a business loan can be a challenge for first-timers, but having a good credit score will likely get you a good amount. You might want to consider getting an SBA small business loan with a lower interest rate than other types of business loans backed up by the United States Small Business Administration or SBA.
  • Small Business Credit Card Loan: Some credit card networks or issuers offer special benefits to small business owners such as airline mileage points, cash back, and other rewards. One important thing you have to note is that some business credit cards are connected to your personal credit history and credit score. This means that late payments or defaults would impact your individual credit rating. The interest rates for business credit cards range between 5-19.9%.
  • Crowdfunding: This funding alternative refers to the practice of financing a business by raising money from contributions made by people on crowdfunding platforms. 
  • Peer Funding: Your family and friends can also be a source of funding. There should be a clear agreement as to the terms. Preferably, you should sign a written agreement as this will help avoid future disputes and ensure everyone abides by the terms specified in the contract.
  • Personal Savings: If you have a significant amount of savings to start your own business, you can use it to avoid incurring fees and charges set by lending institutions.

Choose the Role You Want in Your Business

One of the big deciding factors to deciding structure of the business can be the role you want to play within the company, according to Inc. Magazine. If you’re thinking about running the business on your own without very much say from anyone else, you might want to stick to a sole proprietorship.

However, if you simply want to be invested in the company and earn benefits from it, you may want to look into a corporation instead. Your ability to function in a specific role within the company is very much dependent upon what kind of structure your business has.

Rather than romanticizing the kind of role you want to try to be realistic in what control you want to have, the kind of money you want to make and what you want to do in your personal life. These can all be determining factors in helping you decide the kind of business you’re going to start.

Remember, even if you have a great concept, you may not have the business acumen to run the business, so setting up a structure in which someone else runs the company for you may be the best way to go. You can also find free tools to help you run your business on Go Spaces.  

What To Ask When Hiring A Person For Your New Business

Some parts of establishing a new business are easy, and some are less so. For example, completing an online EIN application is easy. By contrast, tax filing for a business can be stressful and time-consuming. Hiring employees for a new business can be both exciting and daunting.

Here are some tips on how to hire people for brand new business:

Hire New Employees One at a Time

Some business owners think it is a good idea to hire people recommended by friends. Others think that hiring people you already know is asking for trouble. Whether you rely on your social network or recruit employees through job search sites, don’t hire too many employees at once. It is best to hire employees one at a time.

Hiring one employee at a time, in the beginning, is best because it allows your business to grow gradually. You are not faced with an overwhelming amount of new expenses and responsibilities. You also get a chance to get to know your new employee and train him or her thoroughly. You can learn from your experiences with your first employee when you hire your second one.

Ask Thoughtful Interview Questions

Only ask interview questions that are not obvious from the applicant’s resume. Ask them what they learned at previous jobs, not just what they did. Doing so will give you the chance to see that the applicant thinks critically and reflectively. Avoid cliché questions like, “Where do you see yourself in five years?” However, do ask why the applicant chose to apply to work for your business. Also, it’s best to avoid personal questions because these are unprofessional.

When hiring new employees, let them know about your vision for your business. Create a welcoming and professional environment and they will be happy to work for your company.

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