Consider 5 key criteria when choosing right business for you

By Rhonda Abrams

For years, I've written this column for people who run businesses. Yet I know many readers dream about starting a business but haven't yet taken the plunge. One thing holding them back is they don't know how to decide whether a business is right for them.

If you're one of those people, this column is for you. Over the years, you may have had hundreds of ideas for businesses — or perhaps you've had very few.

Sure, you know there are plenty of possible businesses you could start. After all, family and friends keep suggesting ideas: Your sister says you should sell real estate, your exercise partner wants you to open a gym, and your neighbor swears you can make a fortune selling herbal supplements.

But now that you're actually going to put your toe in the entrepreneurial waters, you're stymied. How do you evaluate whether it's a good idea or just so-so? How do you know if it will make money?

Some people think choosing a business is just a matter of trusting gut instinct. But that's not always the best way to judge. After all, you've got a lot at stake. This is a big decision — a much bigger decision than accepting a job.

After all, if you take the wrong job, you can always quit and look for another. But starting a business is a huge commitment — it takes a lot of time and determination, and you risk your own money.

Consider these five criteria when evaluating business ideas to see what's right for you:

• Can it succeed as a business?

You probably enjoy doing many things. They might suit your talents and interests; they might even give you a great sense of satisfaction and accomplishment. But if you can't make money doing them, there's a word for these kinds of activities — hobbies.

• Can it meet your financial needs and goals?

Different people have different financial situations. One would-be entrepreneur may need to support a family, while another would be happy to make some extra money to supplement existing income. Keep your financial needs in mind when choosing a business regardless of your area of interest.

• Can it meet your personal needs and goals?

Just as different people have very different financial needs, they also have different personal requirements. When considering a business, examine how much time you will need to put in to be successful in that endeavor and make certain it fits with the other demands in your life.

• Does it fit your interests and abilities?

What interests you? Animals, accounting, art, architecture? Naturally, you want to find a business that holds your interest, making that a very good place to start your business search. Of course, it's not enough to just be interested in something. You also have to have the skills to be successful. Just be sure to keep your ideas and expectations realistic.

• Can you get started on it?

When I say "get started," I don't necessarily mean you should go out and get your first customer or ship your first product tomorrow. I'm talking about taking some real steps to put the process of starting your business in motion. This might mean taking some classes to learn essential skills, getting a job in a related business so you can learn about the industry or starting to develop your business plan.

Rhonda Abrams is the author of "The Successful Business Plan: Secrets & Strategies," and the president of The Planning Shop, publisher of books and other tools for business planning.

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