When choosing a what business you want to pursue, there are not only many different kinds of businesses you can run, but there are also a wide variety of business models that you should consider when deciding what is the right business for you. A good overview of all the kinds of businesses you could start can be found by looking at how the federal government classifies businesses. All federal data are now collected using the North American Industrial Classification System (NAICS) of Businesses. This system identifies 1170 industries each of which include a number of specific types of businesses. The 1170 industries are grouped into 20 general categories: Agriculture, Forestry, Fishing and Hunting Farming Fishing Logging Ranching Timber Tract Operations Mining Coal Mining Metal Mining Nonmetallic Mineral Mining Oil and Gas Operations Support Activities for Mining Utilities Natural Gas Distribution Power Generation Sewage Treatment Facilities Steam and Air-Conditioning Supply Water Supply and Irrigation Systems Construction Commercial Building Construction Drywall Contractors Electrical Contractors Flooring Contractors Framing Contractors Glass and Glazing Contractors Highway, Street, and Bridge Construction Land Subdivision Construction Masonry Contractors New Housing Construction Oil and Gas Pipeline Construction
Painting Contractors Plumbing Contractors Poured Concrete Foundation Power and Communication Line Construction Residential Remodelers Roofing Contractors Siding Contractors Structural Steel Contractors Water and Sewer Line Construction Manufacturing Aircraft Manufacturing Apparel Manufacturing Arts and Crafts Breweries Cement Manufacturing Chemical Manufacturing Clay Product Manufacturing Commercial Bakeries Commercial Printing Computer Equipment Manufacturing Distilleries Electronic Manufacturing Fabricated Metal Product Manufacturing Food Manufacturing Foundries Furniture Manufacturing Glass Product Manufacturing Iron and Steel Mills Machine Shops Machinery and Equipment Manufacturing Metal Manufacturing Mineral Product Manufacturing Motor Vehicle Manufacturing Paper Product Manufacturing Petroleum Refineries Plastics Product Manufacturing Retail Bakeries Rubber Product Manufacturing Sawmills Textile Product Milling Tobacco Product Manufacturing Tradebinding Wineries Wood Preservation
Wood Product Manufacturing Wholesale Trade Business to Business Electronic Markets Commercial Equipment Wholesalers Construction Material Wholesalers Durable Goods Wholesalers Electronic Parts Wholesalers Equipment Wholesalers Farm Product Wholesalers Grocery Wholesalers Hardware Wholesalers Home Furnishing Wholesalers Industrial Wholesalers Motor Vehicle Wholesalers New Parts Wholesalers Personal Service Wholesalers Professional Equipment Wholesalers Supplies Wholesalers Wholesale Trade Agents and Brokers Retail Trade Art Dealers Automotive Parts and Accessories Stores Boat Dealers Book Stores Building Material Dealers Clothing Stores Crafts Stores Department Stores Electronic Auctions Electronic Shopping Electronics Stores Farm Supply Stores Florists Fuel Dealers Garden Centers Gasoline Stations Gift, Novelty, and Souvenir Stores Health and Personal Care Stores Hobby, Toy, and Game Stores Home Centers Home Furnishing Stores
Household Appliance Stores Internet Auctions Jewelry Stores Liquor Stores Luggage and Leather Goods Stores Mail-Order Houses Manufactured (Mobile) Home Dealers Motor Vehicle Dealers Musical Instrument and Supplies Stores News Dealers and Newsstands Nurseries Office Supplies and Stationery Stores Outdoor Power Equipment Stores Pet and Pet Supplies Stores Pharmacies and Drug Stores Prerecorded Tape, Compact Disc, and Record Stores Sewing, Needlework, and Piece Goods Stores Sporting Goods Stores Supermarkets Tobacco Stores Used Merchandise Stores Warehouse Clubs and Supercenters Vending Machine Operators Transportation and Warehousing Air Traffic Control Air Transportation Bus Transit Systems Charter Bus Industry Couriers Employee Bus Transportation Freight Transportation Arrangement Limousine Service Local Delivery Local Messengers Marine Cargo Handling Motor Vehicle Towing Packing and Crating Pipeline Transportation Port and Harbor Operations Postal Service Railroads Scenic and Sightseeing Transportation School Bus Transportation Special Needs Transportation Taxi Service
Trucking Warehousing and Storage Water Transportation Information Archives Book Publishers Cable and Other Program Distribution Cable Programming Cellular Telecommunications Data Processing Directory Publishers Greeting Card Publishers Internet Publishing Internet Service Providers Libraries Mailing List Publishers Motion Picture Production and Distribution Motion Picture Theaters Music Publishers News Syndicates Newspaper Publishers Paging Periodical Publishers Radio Networks Radio Stations Record Production and Distribution Satellite Telecommunications Software Publishers Sound Recording Studios Teleproduction Services Television Broadcasting Video Production and Distribution Web Hosting Web Search Portals Wired Telecommunications Carriers Finance and Insurance Claims Adjusting Commercial Banking Consumer Lending Credit Card Issuing Credit Unions
Direct Health and Medical Insurance Direct Life Insurance Direct Property and Casualty Insurance Direct Title Insurance Carriers Financial Planners Insurance Agencies and Brokerages Investment Advice Investment Banking Mortgage Loan Brokers Nonmortgage Loan Brokers Pension Funds Portfolio Management Real Estate Investment Trusts Sales Financing Savings Institutions Securities and Commodity Exchanges Securities Dealing Trust, Fiduciary, and Custody Activities Real Estate and Rental and Leasing Appliances Rental Consumer Electronics Rental Equipment Rental and Leasing Formal Wear and Costume Rental General Rental Centers Home Health Equipment Rental Lessors of Real Estate Property Offices of Real Estate Agents and Brokers Property Managers Real Estate Appraisers Vehicle Rental and Leasing Video Tape and Disc Rental Professional, Scientific, and Technical Services Advertising Agencies Architectural Services Building Inspection Services Certified Public Accountants Computer Related Services Drafting Services Engineering Services Environmental Consulting Services Geophysical Surveying and Mapping Services
Graphic Design Services Human Resources Consulting Services Industrial Design Services Interior Design Services Landscape Architects Lawyers Marketing Consulting Services Marketing Research Notaries Payroll Services Photography Studios Public Opinion Polling Public Relations Agencies Research and Development Agencies Surveying and Mapping Services Tax Preparation Services Testing Laboratories Title Abstract and Settlement Offices Translation and Interpretation Services Veterinary Services Management of Companies and Enterprises Offices of Bank Holding Companies Offices of Other Holding Companies Corporate, Subsidiary, and Regional Managing Offices Administrative and Support and Waste Management and Remediation Services Armored Car Services Carpet and Upholstery Cleaning Services Collection Agencies Convention and Trade Show Organizers Convention and Visitors Bureaus Copy Shops Court Reporting Credit Bureaus Employment Agencies Exterminating and Pest Control Services Hazardous Waste Collection Investigation Services Janitorial Services Landscaping Services Locksmiths Office Administration Services
Packaging and Labeling Services Private Mail Centers Repossession Services Security Guards Security Systems Services Septic TankServices Solid Waste Collection Sports Tour Operators Stenotype Services Telemarketing Bureaus Telephone Answering Services Temporary Services Travel Agencies Tour Operators Educational Services Apprenticeship Training Automobile Driving Schools Business Schools Colleges Computer Training Cosmetology and Barber Schools Educational Support Services Elementary Schools Exam Preparation Fine Arts Schools Flight Training Junior Colleges Language Schools Management Development Training Professional Schools Secondary Schools Secretarial Schools Sports and Recreation Instruction Tutoring Universities Health Care and Social Assistance Ambulance Services Ambulatory Surgical and Emergency Centers Audiologist Offices Blood and Organ Banks Child and Youth Services
Chiropractor Offices Community Food Services Day Care Services Dentist Offices Diagnostic Imaging Centers Emergency and Other Relief Services Family Planning Centers HMO Medical Centers Home Health Care Services Homes for the Elderly Hospitals Kidney Dialysis Centers Medical Laboratories Mental Health Practitioner Offices Nursing Care Facilities Occupational Therapist Offices Optometrist Offices Outpatient Mental Health Centers Physical Therapist Offices Physician Offices Podiatrist Offices Residential Mental Health Facilities Residential Mental Retardation Facilities Speech Therapist Offices Substance Abuse Facilities Temporary Shelters Vocational Rehabilitation Services Arts, Entertainment, and Recreation Agents and Managers Amusement and Theme Parks Botanical Gardens Bowling Centers Casinos Country Clubs Dance Companies Dinner Theaters Fitness Centers Golf Courses Historical Sites Independent Artists Independent Performers Marinas Museums Musical Groups and Artists Nature Parks
Promoters Racetracks Recreational Sports Centers Skiing Facilities Sports Recreation Guides Sports Teams and Clubs Sports Trainers Theater Companies Writers Zoos Accommodation and Food Services Bars Bed-and-Breakfast Inns Campgrounds Caterers Hotels Restaurants RV Parks Other Services (except Public Administration) Automotive Repair Barber Shops Beauty Salons Business Associations Car Washes Cemeteries and Crematories Civic and Social Organizations Conservation Organizations Diet and Weight Reducing Centers Electronics Repair and Maintenance Environment Organizations Equipment Repair and Maintenance Funeral Homes Grantmaking Foundations Household Goods Repair and Maintenance Human Rights Organizations Labor Unions and Organizations Laundries and Drycleaners Linen Supply Machinery Repair and Maintenance Parking Lots and Garages Personal Goods Repair and Maintenance Pet Care (except Veterinary) Services
Photofinishing Laboratories Political Organizations Private Households Professional Organizations Religious Organizations Social Advocacy Organizations Voluntary Health Organizations Wildlife Organizations Public Administration Administration of Public Programs American Indian and Alaska Native Tribal Governments Correctional Institutions Courts Electric, Gas, and Other Utilities Executive Offices Fire Protection International Affairs Legal Counsel and Prosecution Legislative Bodies National Security Parole Offices and Probation Offices Police Protection Public Finance Activities Regulation of Agricultural Marketing and Commodities Space Research and Technology There is more to deciding on the right business other than settling on the actual product or service you will be producing. Here are a number of other factors that may be a consideration in identifying the right model for your business. Buy a Franchise vs. Join a Direct Marketing Business vs. Start From Scratch This is a question of how ready you are to plan and implement every aspect of your business. Direct marketing businesses and franchises train and support you, but your flexibility of what you offer is limited. It also can be costly to buy into an established business. Franchises do usually have a track record and marketing that can be a bonus to get your business going. Look carefully into any direct marketing businesses you might consider. They can require tremendous investments that often cannot be recovered if you decide it is not the right path for you. Home-based vs. Office-based Some people are looking for a business they can operate out of their home; others feel more productive when they separate their business from their home life. Zoning laws may limit the types of businesses you can do from your home. You also may have space limitations that limit your choices. Home-based businesses can be lonely. Office-based businesses may bring hassles with other tenants if you are renting or cashflow if you purchase.
Invent Something New vs. Produce a Product vs. Offer a Service vs. Consult as an Independent Contractor Inventions are usually solitary activities that require a lot of creativity. Products require manufacturing facilities, supplies, and distribution; services are more people-oriented, often facing deadlines not of your own choosing. Independent contracting can be the best of all worlds, although continually finding new contracts can cause cash flow problems. Long Term Commitment vs. Build a Business to Sell Some people have every intention of staying in this business forever. It is the realization of a dream. Others dream of making their money through starting new businesses, then selling them. The rush for them is the joy of starting something new over and over. Such folks are sometimes called "serial entrepreneurs." Each way of operating requires a very different financial model. Be honest with yourself about what is right for you so that you can structure your business plan accordingly. Not-for-profit vs. Profit-based Not-for-profits can be very emotionally rewarding, but are often low pay, although as with any business you can set your own pay within the budget of the business. There also extra legal hoops to jump through to run a not-for-profit business. If you dream of a solid nest egg or even fame and fortune, a profit-based business may be the best path for you. Online vs. Physical Business (or Both) Online businesses are often the choice of people who want a home-based business, but they are not synonymous. Online businesses can be any size and in any location. They can be worldwide or local. Physical businesses are almost always local unless there is a mail-order or ecommerce component. Each of these types of businesses is different to manage and run. Don't let other factors like wanting to be homebased influence your decision on this. If you like activity and hate computers, the internet is not the right spot for you. Grow vegetables instead. Sell Your Product or Service in a Physical Location vs. Contracting Your Goods or Services Out to the Federal or State Government Selling as a contractor has lots of rules, regulations, and paperwork, but can provide a lot of flexibility and a great cash flow. Selling locally (or nationally) is a totally different kind of marketing effort, but in many ways less hassle. One of the biggest areas of contracting is the federal government. The Small Business Administration has a number of programs to help with selling to the government. So, do take a look at some of the pros and cons if you think this might be something of interest to you. Size of Business Some entrepreneurs simply want to make enough to live simply. Others are looking to build another Microsoft. There are two components to consider in size. What is a comfortable size to start for you and how big do you eventually want to get? Some folks who are new to business want to be on their own to learn the ropes before adding employees, others who have managed before may be more comfortable having at least a few employees to share the workload. Your strengths and weaknesses will help you assess your short-term objective. Your own personal goals will help you determine your long-term objective. Skills Needed You may have a dream of what business you want to have eventually, but not have the skills yet. Education may need to be part of your business plan. Even for those of you who have a basic idea of what the business entails, the more you can learn about it, the better a business you will have. Make certain you know what skills are required for a business and how your strengths and weaknesses fit with those skills.
Urban vs. Rural Urban businesses and rural businesses frequently have different constraints and different models. Marketing can be very different. It can make a difference in what business you choose. You may have always wanted to move to a rural location or vice versa and are taking the opportunity of starting a business to explore such a change. Do be aware of the differences in population density, consumer behavior and zoning laws, to name only a few of the differences you will experience by changing location. Learn as much as you can before taking this leap. Right Business There are literally thousands of types of businesses you could choose to operate. Making the choice can be very difficult. You don't want to make a major commitment of time and money to something that is not something you will love, or that is not financially viable. One way to start is to look at lists information about different types of businesses to help explore possibilities; however, all lists have limitations. They are nice to scan, through -- and great if they describe precisely the business you want to start, but even lists with hundreds of possibilities barely scratch the surface. I have put together a resources on a variety of businesses. It is far from comprehensive, but is an information resource that I am constantly building on. Certainly, the most common advice is that any business you operate should be something you love. Even if you are certain about what you love and/or want to do, finding the right business that best utilizes your skills and interests needs to be considered carefully. For instance, someone who loves art can be an artist, run an art gallery, do restoration, or teach art. Each requires different skills, but all fit with loving art. Part of knowing yourself is finding the right fit for what you find fun to do. For those of us have do not have a clearcut passion, deciding what is the "right" business is often a major stumbling block in taking the big step. Most of us have an assortment of skills and interests that are not focused towards one particular field of endeavor. In some ways we are blessed because a wide variety of things can make us happy, but it can also provide confusion when there are so many different directions one could go. How do you make the choice? It is not uncommon to get pulled into scams because of this indecision. Potential entrepreneurs know they want to take the big leap, but can't decide. Along comes a friend or an ad with promises of making riches overnight using their program. If the deal seems too good to be true, it is. No one is making money overnight. A successful business is built slowly based on a well-designed business plan. So, how do you know what kind of business to start? You need to start with writing down what you personal goals are for the business as a start. Are you seeking certain income level? Do you want to grow into a major company or will something small be sufficient? Is this a means of making money so you can do other things or are you seeking a business that is fun in-and-of itself? Describe the ideal business as thoroughly as you can. You next step involves using a technique common in strategic planning -- SWOT analysis. What you should have at the end of this assessment is a clear set of attributes a business must have to be "right" for you. The next step is to consider how to choose the right one. This is where you need to get creative. Hopefully, by this point you have some sense of the general area you would like to work in, be it sports, computers, or any of the other hundreds of possible industries. Take the
SWOT analysis developed earlier and apply it to the industry of interest. What businesses in this industry are best considering your strengths and weaknesses? What businesses are best for the opportunities and threats that are confronting you? While brainstorming with a friend is useful at the preliminary stages to identify possibilities, this is where you really need to make your own decisions. You are the one who has to live with this business day-afterday for years to come. It is a major life decision. It is, of course, always possible to close or sell a business, but if you are going to put a positive effort into it, it needs to be something you are comfortable with committing to for a significant period of time. To make the decision, write down your SWOT analysis, your long-term goals, and your preferences from the choices listed above. Take a moment to peruse my list of business characteristics that may be an additional factor in your decision. All this information you have compiled should give you a relatively detailed overview of the qualities you need for a business to have for it to be satisfying. All these decisions can be overwhelming. For people who hate to make decisions, it is a near impossibility. But decisiveness is a necessity in entrepreneurship. If that is one of your weaknesses, perhaps you need to team up with someone else for this venture -- or reconsider entrepreneurship. If you know what you want to do, but are concerned about the financial aspects, write a simple business plan. While time consuming, it will give you all the information you need (given that you are realistic in your planning) to tell you what your financial obligations will be. If the financing looks like it will be a problem, visit my financing information to see what options may be available to you. If you feel that you are ready to go, move on starting a business. And, remember to have fun! --------------------------------------------------------------------------------