The client usually brings it up after I’ve done their return. They’ll say, “I’m thinking of starting a business, how will that effect my taxes?” I’ll ask what kind of business and get the answer, “I don’t know.” Occasionally, they’ll ask for a suggestion. Dreaming is great, but if you are going to actually do it, then you need to figure out just what you are going to do.
The logical starting place is to look at your skills, talents and interests. What do you like to do? What kind of work have you been doing? What are you really good at? This is a good time to brainstorm a bit. Maybe bring in a friend or family member and pick their brain, too. Even if you have great idea, doing this exercise might help focus your idea. After you have a list of ideas, I suggest you ask yourself a few questions:
- Why do you want to start your own business? Your goal; livelihood, recreation, extra income, should start cutting the list down.
- What kind of job structure do you work best under? Include best time of day, dealing with the public, how you are best motivated and supervised in this answer.
- How much time are you willing to spend on the business? Especially important for a part time business.
- How much money do you have fund the new business?
- Is there a market for your product or service?
- Can you make money and how will you make money?
If you aren’t sure about an answer, especially the last 2, that’s okay. The next step should help.
Once you have your list down to a few ideas, now it’s time for the real research. In a prior post, I talked about sources for general business info. Now you want to get specifics for main idea. If you want to start a restaurant, have you run a restaurant? Worked in one? You need to get a feel for that type of business. What makes one successful and another fail? What are the costs to start and run a restaurant? Are they special legal rules? You’ll want to talk to owners, research the internet, and visit with a SCORE mentor or SBDC Counselor for which ever business area you are thinking about.
And yes, I would suggest doing these questions even if you are just thinking of being a sales consultant for a multi-level marketing program (Avon, Tupperware) or signing up for something you saw on late night TV or on the internet. Few people make money with, or even stick with, these ventures. But if you’re honest and know your limitations, personal and financial, you may still fail but you’ve left yourself in a position to try again with something more realistic.
Dreams are great but a business doesn’t build itself. To be a business owner, you have to first build that business. That takes planning and study. So, get some ideas that interest you and will work for you then research them. At the end of this process, your business should start taking shape. If not, take a look at a discarded idea or brainstorm some new ones and keep researching.