So you have that special spark, and can believe in yourself…

Why are you going to start your business?

You should figure out why you are interested in starting a business. It will usually be for a combination of these reasons:

• for an enjoyable job, to keep occupied
• to make money and be rich!
• for independence, the challenge, and desire to try

The relative importance of these three reasons will be different for everyone. It’s a good idea to question yourself and be honest, because different types of businesses are better suited to each reason.

Ways to make money

The process of making money effectively and relatively easily, could be done in one of two ways

1. make/do something once, and sell it at a high profit margin
2. make/do something once, and sell many of them, at low margin each

Being a tutor, a gardener, or any profession where you sell your time, can be considered falling under category 1 – you are selling your time. Being McDonalds and selling Big Macs could be considered category 2 – you are selling your ingredients to a Big Mac.

Of course, there are many more ways to make money. I would however argue that you’re wasting your time if you make/do something once, and sell it at a low profit margin.

If you can work out a way to make/do something once, and sell many of them at a high margin, then you’re definitely on to something.

Different types of businesses

With this in mind, you should think about the type of business you’d like to go into. You could either:

1. Sell your time
2. Sell products you make
3. Sell products you don’t make, but value-add to

Before we go any further, please don’t consider franchising as “starting your own business” – it’s not. Franchising is literally just buying your job. Yes, being a franchisee perhaps has more freedom and responsibility than being an employee. But, you are very much tied to operating rules, territories, tied to paying commissions and fees, and your “success” is managed carefully by head office. Franchises are for (older) people who enjoy hand-rails and guide-ropes. If you feel you’re better than this, don’t franchise.

Selling your time

If you are going into business “for an enjoyable job, to keep occupied”, then you’re possibly thinking about selling your time. One thing to consider about this type of business is that there is always business admin work involved. You may or may not enjoy the admin work.

Your financial success will be very much linear, and tied to how frequently you can work, or how well you can increase your hourly rate.

A way to expand this is to type of business is to sub-contract, or employ others who sell their time. For example, you are a maths tutor, who sells tutoring services provided by your other friends (pimping them out).

Gahhh, suddenly getting very tired, and this will have to be continued….

I’ve proof read this a few times, but apologies for the tardiness. It’s been a 14 hour work day (but still enjoyable), and I’m listening to a sad song…