Probably the biggest mistake that people make when they start a business is that they try to make a hobby a job. Basically, they sell the things they enjoy. Unfortunately, those aren’t always the things people need, so customers may not be spending enough to even cover the expenses of a small business. The most sure fire way to be a successful entrepreneur is to start a business selling things people can’t do without.
Before you invest your life savings into that new dream project, think about what people really need. Then think about which one of those necessities is absent from your community. Do you have a washateria? People always need a place to wash clothes when they don’t have their own machines. Car washes are a good idea, too. Not everyone can afford a detail shop, so they’re probably spending their quarters at the coin operated car wash. People need clothes and shoes. They probably won’t be spending huge amounts on their everyday wardrobe, so think about the basics. If you love cars, you might consider investing in an automotive business. People need a fast oil change. They need car inspections. They need tires and a towing service. Even in a weak economy these things have to be done.
Unless there is just more demand than supply, it might not be a good idea to open a business in an already saturated market. One more coffee shop in a community with five may not be such a good idea. You would have to know that there is a super strong coffee culture in your town that craves new and interesting brews. In that case, you might be financing micro-roasters just to stand out and compete. The expenses could get pretty high if you take on that challenge.
Businesses based on fads don’t have much life span. You could pour your life savings into something fun and then never make enough money to even pay yourself back. Keep that in mind. A new business should be fun, but it shouldn’t destroy your finances.