How to Choose the Right Business

Many people dream of owning a business. The benefits are significant.

Owners of small businesses make their own decisions, pick their own team, and profit from their own hard work. There are shortcomings as well.

Owning a small business takes a lot of time, effort, and dedication, and failure is always a possibility.

Being an entrepreneur is challenging and difficult, but by carefully preparing yourself for the journey, you can greatly increase your chances of success.

Starting with the Right Mindset

Your chance of success will increase even more if you start with the right mindset. A mindset is a set of attitudes or inclinations. Here are 6 attributes that will contribute to your success:

1. Courage: Starting a business can be an intimidating challenge, especially if it is your first new business. Courage will help you continue pursuing your goals even when difficulties arise.
2. Creativity: As a business owner, you will face new challenges every day. Being a creative problem solver will ensure that you and your business are ahead of the competition and ready for the future.
3. Resilience: Every business owner faces setbacks. An ability to recover and adjust quickly will help your business survive misfortune when it occurs.
4. Adaptability: When conditions change you will need to change too. You might need to change your product or your service, or you might need to change how you run your business. Adaptability is an advantage.
5. Curiosity: Being interested in the world around you, especially your customers and their needs, is a tremendous advantage. Asking questions and staying involved with your community will provide valuable insights. Don’t stop learning.
6. Humility: Just because you own the business does not mean you know everything. It will be important to be open-minded about other ideas and to share the credit with your partners and employees.

An entrepreneurial mindset will help you continue moving forward, overcome challenges, be ready for change, and build a successful business team. If you are ready, then it is time to find the right business.

What is the Right Business

The right business is a business that you enjoy, meets your personal goals, and has a high probability of success.

Before we started Today Africa, one of the first questions we asked ourselves is what kind of business do we enjoy and what kind of work do we want to do.

Everyone is different and that’s why we needed to answer that. So, you may enjoy working outside or working in an office or like to build relationships with your customers rather than selling online to people you don’t know. You might prefer to work regular hours and spend your weekends with your loved ones.

So, there is no wrong answer to the question of what kind of work you enjoy. However, it is important that you think carefully about your preferences so that you can make a good decision and select the right business for you.

That’s why you have to write down your preferences and your goals on paper. Because many researchers and experienced professionals believe that recording your goals in writing will increase the chances that you achieve them.

5 Steps on How to Choose The Right Business

Step 1: Decide if you really want to own a business

An important thing you have to know when deciding if you want to own a business is that being a business owner is a different job than working in a business.

This may sound simple and obvious. While starting TA we knew that it will involve content creation, website design, social media management, data analysis, interviewing African entrepreneurs, managing finance, equipment, etc.

Your main job as an entrepreneur is running the business and making sure that the business is successful by carefully managing money, sales, partners, and people while complying with the laws. 

It’s important to consider that entrepreneurship is its own type of job, more than the job of producing the product or service that the business sells.

Step 2: Make a list of business options

There are several ways to generate the business options for your list. One way is to define a business by what you love to do or for which you have specialized experience.

Another way is to define a business by customer needs that are unsatisfied in the market, or that are poorly satisfied by other businesses.

Below are some questions that will help you make a list of businesses to choose from:

• What activities do you enjoy that are a part of a business? For example, do you enjoy working with numbers like our founder, creating content like myself, or graphic designs? Are you good at managing projects or people? Do you like to build long-term relationships with clients? There may be businesses where you can do the things that you enjoy.
• Are customers getting what they want from businesses in the market? For example, is there an opportunity for aspiring entrepreneurs to get blueprints on how to start their dream business. Would a data analysis company give them more options? Research the market for your business ideas and try to understand whether current available services are overpriced, difficult to access, or unreliable.
• Do you have special skills that can be turned into a business? Do you know how to write content, design websites, or scrape and clean data? Are there emerging industries that would allow you to pivot your career into a new business? 

By asking yourself each of these questions, you can create a list of potential new businesses. You may even find potential businesses that fit into all categories.

Information to gather

Choosing the wrong business instead of the right business is a mistake. One way to avoid this mistake is to collect as much information as you can about potential businesses.

Before proceeding to the next step, you will need to collect information about yourself and the business options on your list. Here is a list of questions that will help you gather the information that you need.

1. Money: How much money do you have to start a new business? Some businesses require a significant amount of money while some require very little initial investment.
2. Skills and knowledge: What special skills and knowledge do you have? Some businesses require significant training, experience, or skills. If you don’t have them yet, perhaps you should wait until you can develop the knowledge and skills that you need.
3. Customer needs: Is the business focused on a defined set of customer needs? Focusing your products and services on the needs of a segment of customers is a more successful strategy than trying to meet all the needs of all the consumers in the market.
4. Market size: Is the market large enough for your new business? Are there other companies meeting the needs of the customers in the market? What will make customers come to you instead of the competition? You might need to guess at the size of the market.
5. Competition: Will your new business be competing on price, quality, or service? A commodity business is a business in which customers go to the seller with the lowest price. It can be difficult to compete only on price because you run the risk of reducing profits if you have to continually adjust your price to be the lowest.

Step 3: Focus on the best options

After you have made a list of options, and collected the information described above. It is time to narrow down your list by focusing on the best options. 

You can focus on the best options by asking several questions about each business alternative.

If all the answers are yes for an option, then the business is an excellent candidate. If some of the answers are no, then you need to decide if you can take action to change those answers.

For example, if you answer no to the question: “Do you have the skills and knowledge that you need?” then you need to decide if you can acquire the skills and knowledge that you need.

If you cannot change a no to a yes, then you should consider excluding that business from the set of options.

Step 4: Evaluate the best options

Before we launched Today Africa, we made a list of businesses and focused on the best options, then we evaluated the options and made a decision. 

There are a number of ways to evaluate the options. One way is to rank the alternatives based on two criteria: preference and potential.

By preference, we mean the level to which the work fits into your preferred lifestyle and satisfies your personal goals.

Personal goals and lifestyle include things like how much you want to work, where you want to work, and will you have enough time for family.

These were some of the things we considered. You may have other preferences that you want to include, and it’s a good idea to brainstorm these preferences.

By potential, we mean the potential for success of the new business. Success depends on many internal and external factors.

External factors are things that you cannot control, like natural disasters, economic recessions, and pandemics. Internal factors are related to how well you run your business. 

These internal factors include how well you are meeting the needs of your customers and managing your business’s operations and finances. 

Some questions we asked ourselves about each of the business options:

• Will we be able to compete against other businesses? 
• Will the business make enough money to pay us, future employees, and contractors?

Evaluating preference and potential is not easy because you might not have enough information to answer every question. You might have to guess and make a prediction.

Avoid impatience and overconfidence

We validated our business for close to a year because of the nature of it, which is attracting people to read our stories.

So, you should watch out for mistakes that can reduce the chance of success. The most common errors in selecting a business are the result of impatience and of overconfidence.

Impatience can lead you to make decisions before you’re ready. While overconfidence can lead you to overlook important information, especially information about potential obstacles or problems with your business idea.

6 ways to help you avoid impatience and overconfidence

1. Consider more than one business: Impatience may lead you to consider only one business. There are many different new business opportunities everyday.
2. Perform a thorough analysis: The step-by-step approach described above takes time to do well. Impatience may lead you to skip steps and start before you are ready. 
3. Start small and grow: For now, Today Africa is run by two people, who are the founders. So, start with a small version of the business and grow over time. Impatience may drive you to try to start big and grow too fast.
4. Understand the basis for competition in your market: Do you really understand what customers want in your market? Overconfidence may lead you to make a decision without a complete understanding of this important aspect of your business.
5. Control your financial risk: Don’t invest all of your assets in the new business. Limit your investment to a predetermined amount that you are willing to lose. Overconfidence may lead you to think that you can risk more than you can afford.
6. Discuss your decision with experienced business owners and friends: We shared our business ideas with others and that helped us discover new resources, information, or tips for success.

Step 5: Make a decision

Finally, you will choose the right business for you based on your preferences and the potential. As mentioned earlier, we also identify two things to watch out for when you are making the final decision: impatience and overconfidence.

When to Start

The process for choosing the right business can and should take time, careful thought, research and preparation. Impatience and overconfidence can make it tempting to start a business before you are truly ready.

Make sure you understand what you will need to get started. One of the best ways to make sure you have what you need to launch your new business is to create a business plan using this simple Business Plan.

Top Ten Do’s and Don’ts of Choosing The Right Business

Do’s

1. Live frugally and begin saving up money for starting your business.
2. Make sure you have an entrepreneurial mindset.
3. Make a list of the activities that you enjoy that are a part of a business.
4. Consider several options for a new business.
5. Honestly evaluate your skills, experience, and special knowledge as well as the business’s potential for success.
6. Talk to lots of people for advice.
7. Think carefully about customer needs and how your business will meet those needs.
8. Careful consider the competition in the market and the size of the market.
9. Complete the preferences and potential worksheet for each business option.
10. Finish your business plan before launching your new business.

Don’ts

1. Quit your job before you have completed your business plan and are ready to launch.
2. Consider operating a business in a field you do not enjoy.
3. Risk all the family assets. Limit your liabilities to a predetermined amount.
4. Compete with your employer in a moonlight business.
5. Be in a hurry to select a business. Do the research first.
6. Select a business that has limited potential for success.
7. Operate a business in which you must have the lowest price to succeed.
8. Neglect to consider the negative aspects of a potential business.
9. Permit overconfidence to outweigh careful analysis.
10. Forget that building a successful business will take time.