There is more to deciding on the right business other than settling on the actual product or service you will be producing. Here are a number of other factors that may be a consideration in identifying the right model for your business.
Buy a Franchise vs. Join a Direct Marketing Business vs. Start
This is a question of how ready you are to plan and implement every aspect of your business. Direct marketing businesses and franchises train and support you, but your flexibility of what you offer is limited. It also can be costly to buy into an established business. Franchises do usually have a track record and marketing that can be a bonus to get your business going. Look carefully into any direct marketing businesses you might consider. They can require tremendous investments that often cannot be recovered if you decide it is not the right path for you.
Some people are looking for a business they can operate out of their home; others feel more productive when they separate their business from their home life. Zoning laws may limit the types of businesses you can do from your home. You also may have space limitations that limit your choices. Home-based businesses can be lonely. Office-based businesses may bring hassles with other tenants if you are renting or cashflow if you purchase.
Invent Something New vs. Produce a Product vs.
Offer a Service vs. Consult as an Independent
Inventions are usually solitary activities that require a lot of creativity. Products require manufacturing facilities, supplies, and distribution; services are more people-oriented, often facing deadlines not of your own choosing. Independent contracting can be the best of all worlds, although continually finding new contracts can cause cash flow problems.
Long Term Commitment vs. Build a Business to Sell
Some people have every intention of staying in this business forever. It is the realization of a dream. Others dream of making their money through starting new businesses, then selling them. The rush for them is the joy of starting something new over and over. Such folks are sometimes called "serial entrepreneurs." Each way of operating requires a very different financial model. Be honest with yourself about what is right for you so that you can structure your business plan accordingly.
Not-for-profits can be very emotionally rewarding, but are often low pay, although as with any business you can set your own pay within the budget of the business. There also extra legal hoops to jump through to run a not-for-profit business. If you dream of a solid nest egg or even fame and fortune, a profit-based business may be the best path for you.
Online vs. Physical Business (or Both)
Online businesses are often the choice of people who want a home-based business, but they are not synonymous. Online businesses can be any size and in any location. They can be worldwide or local. Physical businesses are almost always local unless there is a mail-order or ecommerce component. Each of these types of businesses is different to manage and run. Don't let other factors like wanting to be home-based influence your decision on this. If you like activity and hate computers, the internet is not the right spot for you. Grow vegetables instead.
Sell Your Product or Service in a Physical Location vs. Contracting Your Goods or Services Out to the Federal or State
Selling as a contractor has lots of rules, regulations, and paperwork, but can provide a lot of flexibility and a great cash flow. Selling locally (or nationally) is a totally different kind of marketing effort, but in many ways less hassle. One of the biggest areas of contracting is the federal government. The Small Business Administration has a number of programs to help with selling to the government. So, do take a look at some of the pros and cons if you think this might be something of interest to you.
Size of Business
Some entrepreneurs simply want to make enough to live simply. Others are looking to build another Microsoft. There are two components to consider in size. What is a comfortable size to start for you and how big do you eventually want to get? Some folks who are new to business want to be on their own to learn the ropes before adding employees, others who have managed before may be more comfortable having at least a few employees to share the workload. Your strengths and weaknesses will help you assess your short-term objective. Your own personal goals will help you determine your long-term objective.
You may have a dream of what business you want to have eventually, but not have the skills yet. Education may need to be part of your business plan. Even for those of you who have a basic idea of what the business entails, the more you can learn about it, the better a business you will have. Make certain you know what skills are required for a business and how your strengths and weaknesses fit with those skills.
Urban vs. Rural
Urban businesses and rural businesses frequently have different constraints and different models. Marketing can be very different. It can make a difference in what business you choose. You may have always wanted to move to a rural location or vice versa and are taking the opportunity of starting a business to explore such a change. Do be aware of the differences in population density, consumer behavior and zoning laws, to name only a few of the differences you will experience by changing location. Learn as much as you can before taking this leap.