Having options in life is great, and sometimes having too many options can overwhelm you and prevent you from making progress toward whatever it is you are contemplating. If you are currently in the deciding stages of what kind of a side business you should start, know that you have a plethora of options, and you can choose a model that fits your lifestyle and your vision.
Enterprising individuals itching to start something often know that they want to get in business for themselves, but not necessarily what business and how to go about getting into it. If you are in this situation, try the backward thinking approach, which often helps back into the type of side business you should be starting.
What is the backward approach? It is simply a process of elimination or selection during which you think through and answer questions pertaining to your personal situation. Your responses will often clearly indicate the right type of side business model for you, or at least get you closer to it by narrowing your options.
A Handful of Points to Think Through When Deciding on a Side Business:
- How much money do you want to invest? This question is meant to gauge your risk appetite and financial capabilities. You need to decide how much money you have or can raise which you are willing to invest in your side business. Are you willing to risk that capital in the event your business doesn’t do well?
- How much time can you physically dedicate to it? This question helps you think through all the other stuff you’ve got going in life that may support or prevent you from dedicating the necessary time to your business. If you are currently working Monday through Fridays and are planning on staring a side business and you know you can’t dedicate every night after work to your business, you might shy away from a fixed operating business model.
- Do you want quick results now, or are you willing to work for free today to build a more stable and long term business tomorrow? This question asks you whether you want to trade your time for money and benefit from it today (i.e. working as a freelancer) or whether you are more interested in building a long term asset like a profitable website. The latter usually involves a lot of work upfront with little or no reward. There is more uncertainty involved about the future, but the rewards can be tremendous.
- How big or small do you want your business to be? This question tackles scalability. Are you interested in a scalable side business which you can grow in the future, or a smaller business that provides steady income (i.e. your local dry cleaner) which you have no plans of expanding?
- Are you happy providing personal service or do you want to build an asset that you can sell? This question is tied in many ways to the one about a short term vs. longer term business. Some people start part time side businesses to supplement their incomes from employment while others build a business with the exit strategy in mind, often the sale of the business. Establishing a business that provides passive and residual income is a longer term project, but once profitable, it can be an income producing asset that you can sell.
As you can imagine, a common characteristic that will impact your responses to the questions above is your marital status, whether or not you have children and your age to some extent.
This is not a comprehensive list by any means of all things to consider when deciding what kind of side business to start. These are some thought starters that certainly need to be contemplated and addressed. Think about it as part of your initial business planning. Thinking through these points will help you solidify the type of side business you want to start, and therefore can move on to compiling your business plan.
Readers: So what kind of a side business do you think fits your preferences?
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