What is the Best Business to Start Now?
Are you looking to start a business today? Bob Voss at AllBusiness.com advises that you study the current social trends. What target markets are rapidly and steadily growing? You should also have a competitive edge over other similar businesses. Previous experience and know-how in that industry are also advantages if you don’t want shaky surprises.
“What is the best business to start right now?”
The meaning behind this question is clear. The person asking the question is looking for the perfect business based on current growth trends and economic issues.
I answer this question two ways. I usually start by explaining that various social or cultural trends can provide opportunities for business startups and even “recession-proof” businesses. For example, businesses that provide services to help aging seniors live more independent lives are a smart bet because the target market is growing rapidly.
Similarly, “green” businesses are being positively received right now. (The problem with “green” businesses is that many don’t have a sustainable business model and can require a lot of start-up capital: just look at Solyndra!) Pet-related businesses also seem recession-resistant. For some reason, people will continue to spend money on their pets even when they are in financial trouble.
But be warned: Trends are important, but they can change rapidly.
The second way I answer the question is to explain that any business can be a good business to start if it has three particular traits:
First, the business should have a significant competitive advantage over the competition. That means you can separate yourself from the pack and quickly gain exposure with prospective customers.
Trait number two is a business owner with vast experience in the industry. Deep experience flattens the learning curve and helps avoid unpleasant surprises. In many cases the business owner’s reputation can help the startup gain traction quickly.
Third, the business should be able to get to positive cash flow quickly. In today’s credit markets, if yourcan’t show how it will get to positive cash flow in the first 3-6 months; it will be difficult to obtain funding. Almost all investors and bankers want to see positive cash flow in at least the first year, but what they’re really looking for is positive cash flow in the first quarter or two.
If your new business idea follows current growth trends and it possesses all of three of these traits, it’s likely a great business to start right now.
Photo by Home Instead Senior Care Inc.