Streetwise Tips on Ideas For New Businesses

* The competition
How tough is the competition in the market you are considering? Maybe the same concept would fare better in a nearby market or in another related product or service niche. Remember, the only time you can “choose” your competitors is before you start a business.

* Market size
You need to consider the size of your potential market, especially if you are considering a local, specialized business. Are there enough collectors in the vicinity to support a dollhouse collector’s store? Is the local market large enough to support another full-service Mexican restaurant?

* Hobbies often stay hobbies
A lot of people may advise you to consider hobbies when looking at options for a business theme. Do this cautiously. While there certainly are exceptions to this rule, many hobby-based businesses fail to realize the sales or profitability that their founder-hobbyist anticipated. One reason for this is that many hobbies have very narrow and extremely segmented audiences. Another is that there are often an abundance of talented people in any hobbyist industry, people who are content to sacrifice a higher potential income in another field just to be able to work at something they truly enjoy. In other words, your competition may be stiff.

* Economies of scale
Unless you plan a major public offering on a public stock exchange, you will probably be starting a relatively small business. Avoid industries in which you would be competing directly with firms that have a significant market advantage in terms of their size alone.

* Related field
If you don’t go into business in a field you know extremely well, you are going to be in for a long uphill struggle. Not only will you be facing a problem all start-up businesses face—established competition—but your competition will know the business a lot better than you do. If you really want to go into business in a field that is not directly related to your past experiences, education, or expertise, you should at least consider buying a franchise.