What is the Best Business to Start?

In my last post, Is now a good time to be your own boss?, we explored the growing trend of laid-off workers in America, especially 40- to 60-year olds, who are giving up the job search and starting their own business.

If you’re unemployed, there are several good reasons why it may make sense for you to start a small business instead of finding another job:

1. The average job search lasts a year or more, so in the time it takes to find a job, you could get a great start on your own business.
2. If you do find a new job, you’re still at risk of another lay-off…maybe even more at risk because now you’re one of the newest employees.
3. Chances are good that your new job would likely pay less than you were making before.  By starting your own business, you’ll have more control over your earning potential and your financial future.

But even if you’re happily employed, or feel trapped in a job you hate, if you’ve ever wanted to strike out on your own, now may be a great time to start a business.

What is the best business to start in a down economy?

So, what is the best small business to start in a down economy? It really depends!  You probably figured I was going to say that.

There are several different kinds of businesses, and the one that’s right for you will depend on several factors, including your current financial situation, the economy or market in your area, and your personal passions and interests.

Here are some things to consider when thinking about starting a small business:

• Do you want to run a business in the area you live in right now, or should you move to another region where the business conditions are better?  Depending on the kind of business you choose, your local economy may or may not make a difference.
• Should you choose something that you know will make money, even though you’re not crazy about doing that kind of work, or should you stick with something you’re really passionate about?
• Some businesses require tens or hundreds of thousands of dollars in start-up costs, others cost relatively nothing, and many can be started for under $500 or $1,000. Do you have money saved up? Can you get money from your retirement fund to cover your start-up costs?  Will you need to borrow money?  Or do you want to start something that requires little up-front capital?
• Do you want to buy a franchise where the business plan or system is laid out for you to follow, or do you want to create something from scratch?
• Are you open to buying into an existing business as a partner, or buying-out someone who is looking to sell or retire?
• Do you want to work in the business every day, or do you want something that is more passive?
• Do you want a business you can run from home, or do you want something that requires a separate office or shop?
• Do you want to manage employees, or would you prefer to keep it a one-person operation?
• Do you enjoy face-to-face interaction with customers, or would you prefer something that is phone-based or online?

Your answers to these questions will help you narrow down the kind of business that is right for you.

Growing Industries for New Business Start-Ups

• Online Business – There are many ways to make money on the Internet.  First, you can sell just about anything on e-Bay, or you could set up your own web site that sells products that you maintain an inventory on and need to ship when an order is placed.  A growing trend is affiliate marketing, where you sell other people’s products or services and receive a commission for each sale.  With affiliate marketing, you have nothing to ship because your vendor handles that.  You simply facilitate the sale and make a commission. Lynn Terry’s Self-Starters Weekly Tips is an excellent resource for anyone wanting to build an Internet-based business from start to profit.
• Green/Environmental – Anything having to do with the environmental sustainability, energy efficiency, alternative and renewable energy, and recycling, will be big in the coming years.
• Lifestyle – Anything that helps people live a better and healthier life, including organic, gourmet or natural foods and other products, personal fitness training, life coaching, etc.
• In-Home Care for the Elderly – The seniors population is exploding as the Baby Boomers hit retirement age, so anything related to care for the elderly is a great choice:  house keeping, shopping, personal care (bathing), or even elder day care.
• Health Care – Again, with the aging Boomer population, the need for just about any medical-related service will grow:  physical therapy, massage therapy, in-home medical equipment, etc.
• Discount/Bargain Stuff – Take any product or service, give it a value price, and target it for those who are out of work or on a budget.
• High End Stuff – Products or services for those who want “luxury” service at a premium price.  Even in today’s tough economy, there are still plenty of people who are doing well.
• Debt/Credit Help – Help for those who are struggling to make ends meet and pay the bills due to unemployment, and for those who haven’t adjusted their lifestyle to meet their budget reality.
• Property Maintenance/Management – Help for the do-it-your-selfer, retirees, and those who want the “condo” lifestyle (no outdoor maintenance) without actually moving into a condo.  Also, because of the growing number of foreclosures, a lot of people who have money (doctors, lawyers, etc.) are buying up cheap houses as investment rental properties.  They need someone to manage and maintain them.

Please Note: Before starting a business, it’s always a good idea to consult an attorney and accountant to understand the financial and tax ramifications.  Depending on the circumstance, you may want to incorporate or form an LLC (Limited Liability Company).

What else would you add to these lists?  Please add your thoughts and comments below.  And come back next time for a list of some of the best home-based business opportunities.

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