A common question I get asked is, “What small business should I start?”
My typical answer is: “Think about starting a business around something that sparks your passion.”
I have a valid reason for giving that answer. The small business you start will take an incredible amount of time. Plus, as you build the business, you will have countless times when you may just want to quit. Those are the times when your passion, or perseverance, will get you through.
Yet passion, while necessary, is not an entirely sufficient variable on which to build a long-term, sustainable small business. Doing that requires that your business makes money.
And the money you make must do more than just pay for supplies. It must cover labor costs, pay for the rent and utilities, and cover taxes, marketing, distribution and the management costs of running the business.
A long-term, sustainable business also will pay the owner for the risk he or she has undertaken, as well as providing a return on the investment.
Finding that profitable business takes time and effort. Ask yourself:
- * Does my product or service have a market? And will that market keep coming back? If so, how often?
- * Will the market pay a price that gives me the profit level I need/desire?
- * Who are my competitors? Do I have a sustainable advantage over them?
Some people can’t offer positive answers for these questions. Yet they still go into business. The reality is the business is more like a hobby. That’s OK as long as you understand what you are giving up and that you will be subsidizing the business in some way through time.
So, what business should you start? It should be one for which you have passion AND makes you a profit.
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Glenn Muske is an independent expert on rural small business, working as GM Consulting – Your partner in achieving small business success. He provides consulting, and writes articles for county extension agents and newspapers across North Dakota. Previously, he was the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality.