How to Come up With a Profitable Business Idea

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Published June 07, 2011

| FOXBusiness

Not every business starts out with one great idea. If you are looking to start up and feel you would make a great entrepreneur, but you don’t know which road to get on, you can work from the ground up and find your niche. However, the experts advise, no matter how you get started, make sure you are getting into business with a clear head about what your future may hold—sink or swim.

Jeff Zindel, owner of The Small Business Group, said many people romanticize the idea of being an entrepreneur, and working for themselves.

"They think it's this great, grandiose thing," Zindel said. "They think there will be less stress, and they will be their own boss. They need to determine what exactly they are after, and then move forward."

Developing a business plan doesn't wipe out any risk, he said, anyone looking to become an entrepreneur needs to have a real love for what they are doing, and accept there is a lot at stake.

"You have to be a risk taker," Zindel said. "And make sure you are getting into it for all the right reasons. You need to be happy doing it win or lose."

Here are some tips for to help entrepreneurs find the right niche or franchise business.

No. 1: What is your passion? Zindel said it is crucial for potential entrepreneurs to decide what they are truly passionate about. Whether it's making pizza or selling shoes, you need to be happy doing it.

"It has to be something that makes sense to them, that they feel in their gut that they enjoy doing," he said.

No. 2: Decide what you can afford. Starting a business is clearly an investment, however there are startups that run on $10,000 a year, while others may need up to $1 million to get off the ground.

Dan Martin, president and founder of IFX International, Inc., said entrepreneurs should consider what they can afford to finance, especially in a rocky economy. Some are cutting corners by working from home, or using public spaces.

No. 3: Establish a board of directors. Not for your business, but for your ideas. Zindel said it is key to have a trusted team with different areas of expertise to weigh in on your ideas. This group of confidants should know business from varied points of view.

He suggests being in touch with someone that has a legal background, another in the banking industry and someone that owns their own small business. "It can get very lonely at the top, so you need people to bounce ideas off of," he said.

No. 4: What kind of owner do you want to be? Martin said that whether the business is independent or a franchise, an entrepreneur must decide if they want to be an owner-operator, or an absentee owner.

"Most people are running as owner-operators today," he said. "It is cheaper and they are more motivated. It builds brand integrity because you are hands-on and running the business."

No. 5: Is your business viable? The average business today takes between two and three years from starting up to recoup investments, Martin said.

"Less risk in this economy is good," he said, “in a home based-or service-based facility, that doesn't require a 10-year lease and a ton of equipment to buy." Consider the category you are competing in, brand recognition, and the marketability of your potential business before jumping in head-first.

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http://smallbusiness.foxbusiness.com/starting-a-business/2011/06/07/how-to-come-up-with-profitable-business-idea/