Question: “Hi Ali, I REALLY want to start a business. Based on your knowledge and experience, What kind of business or which company do you recommend going with?”
—Stephanie Inocencio, Alameda, Calif.
Ali’s Answer: “Hi Stephanie, thanks for writing. You’re smart to be thinking with care about what type of business would be best for you. Without consulting for you personally, I can’t help direct you specifically, but I CAN give you a few categories to consider, along with the pros and cons of each:
1. Service-based business. These types of businesses are usually based around a skill or talent you already have. For example, perhaps you’re a neat freak and your friends are always asking you to help them organize their closets or garages. Sounds like a perfect segue into a personal organizing business. These types of businesses are super easy to start as well—you typically don’t need an office, and all you need to market yourself fast are some business cards and brochures. When I quit my last job in 1999 I took my skill of writing to market as a freelancer, and my first (albeit small) client helped me pay rent that month! I didn’t have a website or anything; I just hit the pavement and hustled.
2. Product-based business. Whether you want to open a retail store to sell pet supplies or do direct selling of cosmetics from home (a la Avon), this is a good fit if you know there are products you believe in. The downside is purchasing inventory upfront (requiring money going out before it comes in) and leasing storage or retail space. It’s imperative you manage your cash flow well. A good friend of mine designs and sells beautiful handbags, and she’s had to get very good at this. Before her bags are made, she typically first has to put money out for the leather, the factory work, and more before revenue is generated. (Once you get into large orders, this problem eases, but many product-based business owners are stuck here for a while.)
3. Franchised or licensed business. If you have money to invest, you may want to consider a franchise. Most of us think of McDonald’s or Subway, but franchises aren’t just about fast food. From senior services to print shops to storage units to stroller mommy groups, doggy daycare, and fitness studios, these opportunities are designed to be proven, plug-and-play businesses. Some are inexpensive to startup at a few thousand dollars and others require millions. You can learn more and start researching at www.franchise.org. A license is a bit different; typically you are purchasing permission to use someone’s system or program in your business. For example, if you’d like to be a sales consultant, there are many programs that allow you to license an already-proven system with your clients.
There are MANY other types of businesses to start, but these three ideas should get your wheels turning! I suggest you start doing your research, and from there see which scenarios get you the most excited and which ones you feel more confident about than others.”
Love and success,
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