Americans set a record for starting businesses in 2023, according to the U.S. Census Bureau. A record 5.5 million recent business applications were filed, up 20% from 2022. And the growth was regular: Every month in 2023 has seen a recent all-time record for business openings since 2019, according to the bureau. business start-up statisticsGrowth has hit all parts of the country, but the West and South proceed to see the strongest growth, a continuation of what we saw in 2022.
Most of those businesses will fail inside a few years if historical trends proceed. Therefore, the decisions entrepreneurs make before they begin their business could be just as essential as the ones they make while running it.
One key query is this: Once you choose that the entrepreneurial life is for you, how do you select the right business? What specific industry—or even area of interest—appeals to you or best leverages your skills, aptitudes, and resources?
We’ll show you the way to sort all of it out in six essential steps.
Follow your passion
The most suitable choice is at all times to produce or sell a product or service that you just know about and love. If you are looking for a place where you possibly can have short-term success just to reap the financial rewards, then wonderful – get in, make money, and get out. But if you would like to start a business for the long run that suits your temperament, your strengths, and the lifestyle you would like, you would like to select a business that you just love.
The advantages of following your passion are many. First, if you truly consider in what you’re selling or selling, you’ll have a much higher probability of constructing a sale. And when the tough times come – and they’ll – you’ll be much more likely to persevere.
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For example, Barbara Yugovich was an enthusiastic Detroit highschool teacher who had been considering the entrepreneurial life for a decade. So she founded The Homework Solution in 2004 in Waterford Township, Michigan, and she and her staff tutor kids in subjects ranging from English to computer skills.
Be real
While starting a business with your individual interests and expertise in mind is crucial, it is equally essential to make sure the enterprise presents a concrete opportunity for growth.
Take a bloodless look at the relevant market. Is it trending toward a real need, even perhaps a collective desire, for the business you would like to start? Or higher yet, is America or the world screaming for someone to do it? Make sure your product or service not only meets that chance, but does it in the best way possible.
How else could David Dean have come up with the idea for Breast Implants 411, a website designed to educate and inform patients and provide information on qualified plastic surgeons? He also selected a great location for the idea: Los Angeles.
Take the competition into account
Scout the landscape for established competition. Don’t do this with one eye closed: you really want to know if someone has beaten you to your sensible idea or not.
But if you discover that one other company has already taken your chosen space, don’t necessarily let that scare you away. In fact, existing competitors could be good indicators of a business opportunity that makes sense. If others are already doing well, that could be a good sign for you. Learn from them. And then, most significantly, differentiate yourself from them in terms of your product or service, or perhaps your geographic market.
For example, John Lillegren knew perfectly well that candy apples weren’t a recent idea. But the co-founder Amy’s Confectionery Kitchen in Cedarburg, Wisconsin, figured it could create high-quality candy apples that had a gourmet flavor, based in part on trends in the candy industry. And now Amy’s $14 gourmet candy apples — with names like Gourmet Pecan Turtle Caramel Apples with Dark Belgian Chocolate — have been featured on the Food Network and are flying off the shelves.
Make a lifestyle selection
If you’re keen on the kinds of activities what you are promoting would require of you, but they might require you to be involved 24/7 from now until you possibly can see into the future, you could want to think twice. Don’t let this Life Plan get sidelined in favor of a marketing strategy. Your dream business could quickly grow to be a nightmare.
At the same time, make sure you select a business that matches the variety of life you have or would love to have. If you want being alone, select something that enables you to work from home. If you enjoy social activities and interacting with strangers, some sort of retail business could also be for you.
Be aware of your risk profile
Your tolerance for adventure in your recent life is an essential factor in selecting a company.
If you create a truly revolutionary concept, the rewards for what you are promoting could be enormous – but along with the potential for success, the risks also increase significantly. There are often fewer variables and risks involved in replicating a business concept that is already in the market and requires only a little adjustment to differentiate itself.
This risk-reward scenario is perfectly illustrated when you purchase a franchise. It’s one of the lowest-risk approaches to sowing your entrepreneurial oats, but it may well also have limited potential reward. As we describe in our book, StartupNation: Open for BusinessBeing a franchisee signifies that the franchisor typically profits from your labor.
Respect the Internet
Learn how you should use this groundbreaking resource for yourself. It can assist you to start a small business for less money and faster than ever before. Just do not forget that while there’s little infrastructure and no bricks and mortar required to launch an online business, there are other fundamentals you would like to know or learn — like optimizing your site for search.
Also do not forget that the Internet can cut each ways. While the possibilities seem exciting and enticing, even perhaps limitless, potential competitors are seeing the same image in greater numbers than ever before. This means you’ll have the basic marketing challenges that every business has, no matter which company you select.