Some of us know that we want to be entrepreneurs, but don’t really know what type of work we should be doing. Should you launch a product? Should you offer a service? Should you open a store? Or perhaps a restaurant? There are so many avenues to choose from – but which one is really suited to you. Starting a business is an exciting opportunity, but choosing the right industry can make all the difference. It’s like picking a path on a hike; choosing a scenic and manageable trail increases your enjoyment and chances of reaching the summit.
That one decision lays the foundation for your success, impacting your target audience, competition, market trends, and overall business strategy. But with countless options available, how do you navigate the sea of possibilities and find the perfect fit? This post can help you to work out exactly which industry you should be focusing on.
Where do your passions lie?
Starting a business that is focused around a passion can be a very good idea, because you will enjoy the duties more and will already have some basic knowledge as to what it takes to succeed. Such a passion could include a hobby (like hiking, baking or writing), or an interest (like pop music, wine or politics). Think about businesses related to these passions and what you can do to make money. For example, if your passion is cycling, you could start cycling tours, open a bicycle store, create a new app for cyclists or launch a blog about cycling.
A job doesn’t have to be directly related to your passions. The likes of the Strong Interest Test can help you to find jobs that are suited to your personality based on the things that interest you. For example, people who are into things like reading, chess and astronomy can be viewed as having a more ‘investigative’ personality that is suited to roles like computer work, laboratory work or university roles.
While passion for an industry can fuel your motivation, it’s not enough on its own. Analyze your skills, experience, and resources. Are you a tech whiz with a passion for fitness? Combining these elements could lead to an innovative fitness app. Look for an industry where your strengths align with your interests, creating a fulfilling and sustainable business.
What experience do you have?
While passion and knowledge are key ingredients for a successful business, experience before choosing an industry can add invaluable seasoning to your entrepreneurial recipe. Having experience in an industry can help you to find your feet more easily as you already know the basics.
For example, if you worked in hospitality and retail, a business within hospitality or retail could make sense. That doesn’t necessarily mean that you have to open a restaurant just because you’ve had experience working in restaurants before. However, your experience could help you when setting up your restaurant – or possibly give you a headstart when considering other restaurant-related businesses like a restaurant marketing company, a restaurant recruitment agency or a restaurant equipment supplier.
If you don’t have experience, immerse yourself. Immerse yourself in the inner workings of an industry that interests you. Observe daily operations, understand challenges, and gain insights into customer behaviour. Learn the fundamentals of business planning, marketing, finance, and legal aspects. Build a strong foundation for setting up and running your business.
What are you qualified to do?
Some businesses require certain licences or can benefit from you having certain qualifications. For example, you can’t start an electrical business without the right electrical licence.
University qualifications – such as a degree in English or History – could help point you in the right direction. Such a degree could give you a certain level of credibility in certain industries. For example, having a history degree could make you qualified to start a historical city walking tour.
You can always gain extra qualifications to help you make it in a certain industry. Just consider how long it will take to obtain these qualifications and whether you have the patience.
What audience do you connect with?
It’s important that you can relate to your customers and that they can relate to you. Consider whether it could be worth focusing on a certain demographic that you connect with. Examples of businesses focused at certain demographics include exercise classes for seniors, makeup for people with vitiligo, pizza for vegans, or cafes with soft play areas for parents with young kids.
Businesses catered to these niches are becoming much more popular and can be a great way to help you stand out from the crowd. Do not target an audience that you know nothing about unless you are willing to put in a lot of research.
Don’t just jump in based on gut feeling. Conduct thorough customer research to understand the industry landscape. Analyze market size, growth potential, trends, and customer needs. Identify your target audience and their pain points. Competitor analysis is crucial – study existing businesses, their strengths and weaknesses, and potential gaps you can fill. Utilise industry reports, government data, and customer surveys to gather insights.
Where is the money?
Some industries are a lot more profitable, have a lot more demand and have a more secure future than others. It’s worth looking at industries that tick all of these boxes so that you’re not financially struggling.
Established industries like finance or healthcare might have high entry barriers and competition, while newer, tech-driven sectors might offer higher potential for rapid growth and profits. Industries catering to large, consistent customer bases tend to be more stable and profitable, while niche markets might carry higher risks but potentially higher rewards.
Some entrepreneurs are purely about the money. While it’s true that making money is important, you don’t want your choice of industry to be solely driven by money as other factors are important for motivation and creating credibility. Remember, profitability is a dynamic concept. What’s profitable now might not be in the future due to market shifts or competition.
Profitability alone shouldn’t be the sole driver. Look for an industry where you can create value, build a strong customer base, and adapt to changing conditions.
What are the initial costs?
The entrepreneurial dream often carries an exciting weight, but alongside it comes the reality of financial considerations. The initial costs of starting a business can vary greatly depending on several factors, and understanding them early on is crucial for planning and securing the necessary resources.
Some businesses are more expensive to set up than others. Taking out a loan or seeking help from investors could be necessary when launching a business in certain industries. You need to be willing to pursue this funding if you don’t already have the money in savings. This will usually require you to have a strong business in place and potentially a good credit score (when applying for loans).
There are also fees associated with registering your business as a sole proprietorship, partnership, or corporation, including filing fees and legal counsel. You may need to obtain necessary licenses and permits specific to your industry and location. Think of upfront costs for setting up your workspace ,including equipment, furniture, and any necessary renovations. And of course online presence. Building and maintaining a professional website or online store, including domain registration, website hosting, and design fees are things to consider.
Launching marketing campaigns to reach your target audience, including online advertising, social media marketing, or local advertising initiatives can cost a lot if marketing is a must to attract customers. Costs can vary significantly depending on your chosen field. Not all businesses cost thousands to set up. Check out this list of businesses that you can start with no money if you want to start a business cheaply.
Choosing an industry is an iterative process. Don’t be afraid to explore different options, refine your research, and adapt your strategy based on new information. Combine your passion, skills, and use a data-driven approach. It’s the best approach to select the perfect path for your business journey.
