Selecting a type of business to start is personal. After all, you want to make sure your head – and heart – are invested in all that you do. You’ll be spending a lot of time working on making your business a success, so you want those hours to be spent on a business you enjoy. Aligning your entrepreneurial journey with your personal interests and aspirations can foster long-term satisfaction and, ultimately, success.

But you still may be asking yourself, “Should I start my own business?” and wondering how to choose the type of business, too. Since selecting a business is a big step in your life, we’ve broken down the seven steps to help you get started.

There are a few strategies to help you find out how to choose what business to start. Self-reflection can go a long way toward helping you identify potential business opportunities that are not only financially viable but also personally fulfilling.

You’ll also want to take some practical steps by conducting market research, evaluating industry trends, and identifying niche markets that align with your interests and expertise. Thorough planning and due diligence will help you select a business that not only resonates with you but also meets the needs of target customers and fills a gap in the market.

Let’s walk through the steps:

How to Choose What Business to Start in 7 Steps

Step 1: Take a Moment for Introspection

Self-reflection can help identify what you love and what brings you the most joy. And while it may seem that you want to start a business that will bring in money, you don’t want that to be all you’re thinking about. For example, if you’ve spent your life loving and working with animals, consider how to incorporate that into a business.

Maybe you want to start a pet shop? Or perhaps you would enjoy franchising a doggie daycare or training facility. There are so many ways to make a hobby or interest into a business if you spend a little time reflecting on what you love in life.

Step 2: Analyze Your Strengths – and Weaknesses

Have you heard of SWOT analysis? It’s a marketing tool used to evaluate a company’s Strengths, Weaknesses, Opportunities, and Threats, helping businesses strategize effectively. By analyzing your strengths, weaknesses, opportunities, and threats, you can gain an objective look at where you shine – and where you may need a little extra work.

For instance, map out your strengths, which could include drive and organization, for example. Then, look at your weaknesses, which could include a lack of attention to detail and an inability to ask for help. Next, list the opportunities that are available out there for you, which could include starting your own small business, franchising, or beginning with a side hustle. Finally, analyze the threats to your idea, such as living in an area where business competition is steep, for example. Once you’ve taken a hard look at this information, you may be able to see a big picture of where you are – and what might be a good business, franchise, or side hustle to start.

Step 3: Focus on Improvement

One business strategy successful businesses are good at is considering what business services are in your area and what they could do to improve them. For instance, maybe there’s a local retail boutique in your neighborhood, but it seems like it’s never open – and the merchandise seems outdated. Perhaps the customer service seems lacking, too.

Here’s what you could do: Start a new boutique with an emphasis on keeping new and exciting products moving in and out of the door due to exceptional customer service policies and longer opening hours. See how easy that was? You didn’t have to invent something new – just take something old and make it better.

Step 4: Do Research

If you’re the analytical type (or even if you’re not), take some time to perform market research on your ideas. For example, if you’re thinking of opening a sandwich shop in your downtown area, talk to people about what they’d like to see in that type of shop. Business tools such as market analysis and market research can be helpful to narrowing down your business idea. The business location is key to success for something like retail or food and beverage, so you can also research the costs of storefronts in your area. 

Choosing a business is a complicated process, but doing your research upfront can help you make the best decision for you. 

While you’re doing your research, include the financial aspects of the type of business too. Look at your financial portfolio and determine if you’ll need a business loan or if you can start or franchise your business with your personal assets.

Step 5: Find Your Niche

A niche is a fancy word for a specialized area of business. This means, think about what you’d like to sell, for example, photography. Then, think about what you bring to photography that is unique and different, and that would attract a subset of customers.

Let’s say you specialize in children’s photography, and even more specifically, newborn photography. This could be your niche or area of specialty that has its own specific target audience. There are a million potential business ideas and target markets, so your imagination is the limit when it comes to finding a successful business idea for your potential customer base. 

Discover the perfect niche for your business with our simple 3-step guide here.

Step 6: Identify Industry Trends

Industries change often, so make sure you’re following what’s happening in the industry or industries you’re interested in. Take retail, for example, and its massive changes since the COVID-19 pandemic. According to Harvard Business Review, while businesses were already planning to shift online in the pre-pandemic future, the onset of the global health crisis accelerated this need – transforming it into a crucial lifeline for their survival during the pandemic.

Retail also has steep competition with larger companies such as Amazon, so keep a close eye on industry trends in areas you’re considering for your entrepreneurial venture. 

Interested in exploring the latest small business trends? Check out our latest Small Business Trends study.

7: Don’t Forget About Franchising

Embarking on a business journey can be exciting – and also challenging. If you’re new to the entrepreneurial game, you may want to consider franchising instead. You get the marketing and advertising support along with an established brand without some of the hard parts of making and selling a viable product.

If you’re considering franchising, Guidant Financial’s franchising resources can help you consider all the angles. 

Is franchising right for you? Find out by uncovering key factors and questions to consider here.

Moving Forward With Profitable Business Ideas

Whether you plan to start a small business online, franchise a business, or start with a simple side hustle, you’re on the right path to start the business with the tips above. Keep your eyes focused on your goal, while keeping your interests, aspirations, and heart in the journey. And take your time – there’s no rush. Business ownership is a big deal, and you want to get your business off to a successful start. Remember the reasons you wanted to become a business owner in the first place – control over your own schedule, being your own boss, doing something you love – and you’ll be set up with a business that fits your personal and professional interests in no time.

Ready to start a small business or franchise? Guidant Financial can help with your funding needs. Pre-qualify today.

“When Falling Sky Brewing presented itself as a great opportunity for me, I needed the capital. Traditional lenders weren’t going to do it. I took a chance on myself that I could grow my business and my 401(k)… And I thought, ‘You know what? I could do this without overhanging debt.‘”

— Stephen Such, Falling Sky Brewing

Read the stories of REAL small business owners who work with Guidant.