You probably have many small business ideas that you're considering at once. How do you know if any of them are viable? Here are 6 essential components of viable small businesses that will help you make a decision:
1. It's Recession Proof
You don't want to find yourself building a new small business, only to see it diminished or eliminated by a recession. Although no business is guaranteed to survive hard economic times, there are some businesses that do fine and others that flourish during an economic downturn. While you shouldn't choose a business on this basis alone, it's worth considering.
2. It Adds Value
A business adds value to clients, but a scam robs people of their hard earned money. Adding value makes your business viable because people will do business with those who improve their lives. As you look for home business ideas, stay away from get-rich-quick schemes that only add value to those selling you their "system." Pursue ideas that serve others with products or services that are useful.
3. There's a Way Out
Otherwise known as an "exit strategy," make sure you will be able to sell or successfully close any small business you're considering. For example, if you're looking to start a sewing business, you need to consider how you'll leave that business. Will you be able to sell the business or your assets? Is it more viable to have an online store selling sewing related products than to hand sew items? As you consider each idea, make a note of the ways that you can leave each business in a way that makes it financially worth it to start in the first place.
4. It's Expandable
You may be satisfied with working alone now, but you should still keep your options open for possible expansion in the future. This doesn't mean that you'll no longer work at home. You can still grow a thriving business from home, using all sorts of outsourced help. A viable small business idea should allow for growth and expansion, even if you never actually do expand.
5. There's a Sound Business Strategy
You want to consider businesses that have a sound business strategy and business model. For example, pyramid schemes are not a sound business strategy and are illegal. Most multi-level marketing programs are not based on a sound business strategy, because you'll have to recruit sellers rather than sell directly to customers and clients only. Writing articles full-time for a percent of advertisements and making $1 or $2 a month for a year is not a sound business strategy.
6. It's not Risky
There's some risk involved with any business you start. However, you don't want to get wiped out financially or emotionally by a business that's just too risky. A viable home business idea should not have you breaking the bank. Low start-up costs are one of the reasons why people work from home in the first place. Also, stay away from small business ideas that require you to pay them for the privilege of doing business.
There are many considerations to make when starting a new business, and there are many small business ideas to choose from. Only consider the ones that are viable, and be sure to weigh other important factors, such as your skills and training, the market and the competition.
Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.