EASY STEPS TO CHOOSING A PROFITABLE BUSINESS

business ideas

 

High unemployment is damaging to the society, as well as the welfare of the people, if unemployed individuals can harness their entrepreneurship skills, output in the economy would increase and there would be economic growth.  The art of choosing the right business can be a real challenge. It requires a thoughtful and sincere process. The following steps will make it easier for you to choose the right business that suits you irrespective of your class, degree and social status.

STEP ONE

List your business ideas in order of passion that is the one you are most interested in should be the first, followed by the next and so on. For example, I have three business ideas: setting up a dancing school; cosmetics manufacturing; fashion designing. If am very much interested in cosmetics manufacturing, also interested in fashion designing and I like the idea of setting up a dancing school. My list will be as follows:

  • Cosmetics manufacturing
  • Fashion designing
  • Dancing school

STEP TWO

Your knowledge of the business needs to be ascertained. How much do you know about the area of business you are choosing? Will you have to spend extra time and money teaching yourself the business? Will you have to take on a partner because you don’t know the business well enough? You can use the following ratings to evaluate your knowledge

0- No knowledge of the business                                                                                                                                               1- Some indirect knowledge of the business                                                                                                                               2- Limited knowledge of the business                                                                                                                                         3- Working knowledge of the business

 STEP THREE

Your experience in the area of business interest also needs to be ascertained. You may have a lot of knowledge about it, but not much experience. These are the following questions you need to ask yourself. Have you ever worked in this type of business before? To what extent is experience crucial to the business you are choosing? The following ratings can be used to evaluate your experience

0- No experience                                                                                                                                                                     1- Indirect experience                                                                                                                                                               2- Limited experience                                                                                                                                                               3- Familiar with the experience

STEP FOUR

Your skills are also as vital as the ones mentioned above. In order to ascertain the required skills, firstly, you need to ignore those skills that might be common to each of your ideas. Secondly, concentrate on skills that are unique to that specific idea.To what extent do you possess those skills? If you lack them, how difficult will it be to acquire them?The following ratings can be used to ascertain your skills

0- None                                                                                                                                                                                  1- Limited skills                                                                                                                                                                        2- Some skills                                                                                                                                                                          3- Extensive skills

STEP FIVE

You need to ponder about set-up cost as well as the competitive barriers (risk analysis) that might exist. For instance, a dry cleaning business that you can run from your home might be relatively inexpensive to start, but if several others are already providing that service, entry into the business may be difficult. The following ratings can be adopted:

0- Crowded field, very difficult to enter                                                                                                                                       1- Limited entry available                                                                                                                                                         2- Mix of large and small competitors                                                                                                                                         3- Unrestricted entry for any size business

STEP SIX

Uniqueness (competitive edge) does not necessarily mean that no one else is providing the same product or service; it can mean that no one else is providing the product or service in the same way you intend to provide it or no one else is providing it in your locality. You should be looking for some way to distinguish your product or service from others who are already in business.The following ratings can be used:

0- Your product or service widely available                                                                                                                                 1- A few to several others offering your product or service                                                                                                           2- Only one or two others                                                                                                                                                         3- No others providing your product or service

Below is an illustration of a worksheet for selecting a profitable business.

Your Business idea Your knowledge Your experience Your skills Ease of entry uniqueness total
Idea 1   your rating   your rating   your rating   your rating   your rating
Idea 2    your rating   your rating   your rating   your rating   your rating
Idea 3    your rating   your rating   your rating   your rating   your rating

 

The final step is to sum up the numbers. You can use the following tips to narrow your list of business possibilities

  • Eliminate any of your ideas that scored less than 10 points
  • Eliminate any idea that did not score at least a 2 in each category
  • Eliminate any idea that did not score at least a 3 in the uniqueness category

After the elimination processes are done, how many ideas are left? If the answer is none, then you need to identify where you need to improve, develop a strategy for raising the 1’s to 2’s or 3’s. If the ideas left are more than one, the decision is yours. If the idea left is one, you have just found the business that is perfect for you.

 

 

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