Whenever there are losers, there are winners. This has never become more true in modern times. With lockdowns across the world and the economy coming to a halt, it seems like everyone is taking a hit. But that’s not entirely true. With changes to how we work and our daily lives, it opens doors to new industries. From remote work to in-home entertainment, these are just one of the few industries that have bloomed.
The path to becoming an entrepreneur is one that has been taken by roughly around 8% of the global population. It comes with its own risks and rewards, greatly depending on the type of business in question.
Choosing an industry you want to start a business in can be overwhelming, mainly because there are nearly no limits to the individual entrepreneur. From the automotive industry, the cosmetic industry, and the food industry to financial services, internet and data services, international trade, and many others – the list goes on and on.
Needless to say, investing your hard-earned money into a business is a decision that should not be taken lightly. It requires thorough research and a focus on the long-term, both emotionally and financially. Far too many individuals choose a specific industry because they figure they can make a decent living, only to realize that they end up feeling frustrated and unfulfilled despite being their own boss.
To get the best of both worlds, here are a few tips on how to choose an industry you want to start a business in and drive your success in the coming years:
1. Start with your expertise
The first rule to choosing the right industry for you is taking into consideration your expertise. In other words, ask yourself, “what am I good at? What do I enjoy?”
For instance, you can look into starting a business that solves a social issue, such as illegal dumping while making it profitable. Although following your heart and pursuing your passion is a vital part of this equation, it is not always good advice. At the end of the day, it is not about you nor your passion. It is about what you are selling and to whom you are selling it to.
By finding that right balance between doing what you love and making your consumers’ care about your passion, you can make the best use of your abilities and build on your existing skills. Only then will the phrase “Do What You Love, The Money Will Follow” have significant meaning.
2. Projected industry growth
During a crisis, everyone focuses on the stores closing. The employees laid off. With every losing situation, there are clear cut winners. In our COVID-19 situation, companies working from home opens doors to growing industries such as remote technology such as Zoom for video calling. Companies supplying essentials are in the safe zone and companies supplying in-home entertainment such as board games and DIY toys are booming.
When you are pondering over the idea of starting your own business, it is very important to do research and determine whether there is a market need for your product(s) and/or service(s). Traditional food industries may have taken a hit, but unique industries such as creating sustainable food will bloom from niche demand.
That being said, you need to identify the areas of the market that are targeted towards new entrepreneurs, as well as the threats and promising opportunities for projected industry growth.
To improve your chances of success, you need to be able to ‘bring something to the table’ that will increase brand awareness and engagement, drive profitability, and generate a greater return on investment.
3. Research Market Demand
Market demand refers to the demand for a given product or service, who is willing to purchase it, as well as whether they are able to purchase it at a specific price in the marketplace. As market demand increases, so does the price.
Learn different market demand testing strategies. From setting up an MVP (minimal viable product) to test consumer demand to simply creating a newsletter and surveying your database to get immediate results, any feedback can be used to point you in the right direction.
Conducting market demand research through surveys, experiments, and observations will show detailed reporting and figures, thereby identifying what industry is most profitable to enter into. In other words, to determine whether a fair percentage of consumers are willing to buy your product(s) and/or service(s), you must be informed of the key drivers of market demand.
Doing so will get you valuable information relating to your target audience, including their needs and preferences. This, in turn, will help you tailor your offers and penetrate the market while growing your business.
4. Analyse Your Competition
If you want to stand out from the crowd, you need to stay ahead of the competition. The only way to do this is by conducting your own research surrounding your market, including your competitors and consumers, and gaining a competitive advantage.
Understanding who your competitors are and what they are offering can help you to set your prices accordingly and make your product(s) and/or service(s) stand out. Based on this knowledge, you can set forward marketing strategies that will highlight your strengths, while stressing your competitors’ weaknesses. You can also identify and dismiss the threat of new entrants.
Never underestimate the importance of building a brand to differentiate yourself. A brand will be the most valuable asset your business can have. Competitors can copy your product or service, but they can never copy what’s unique to you. With an abundance of social media channels to choose from, you can start posting your store on channels such as Instagram, and gradually build up an influencer status.
If you can differentiate your business from competitors and improve your performance with a unique selling proposition, you may have the opportunity to gain the upper hand.
5. Regulatory environment
The regulatory environment is defined as “the set of taxes, rules, and laws or regulations that businesses must adhere to.” With this in mind, when developing your business model, it is important that you check which regulations are currently in position and how they are likely to change in the years to come. Sometimes working in highly regulated industries such as the wheelchair and accessibility industries can mean higher barriers of entry but will mean less competition in the long term.
While you do not want to invest in a business that is likely to get banned, you do want to know your options before jumping on board. Doing so will guide you towards building that empire you have always dreamed about without running into any bumps down the road.
In the economic sense, scalability is a concept that describes the ability of a business to handle a growing amount of work given an increased supply of resources. A business that is depicted as scalable is favourable to success because it is more adaptable to the changing needs of the market or the demands of its consumers.
On that note, it is imperative that you determine how scalable your business is. For instance, if you have an increase in demand, will you be able to supply for the same?
If you would like to gradually grow your business, you need to set a plan in place, one that may require hiring staff, investing in new technology, adding equipment and facilities, get funding and securing sales. A business that has the capacity and the capability to accommodate growth is one that is likely to thrive for years to come.