Photo (CC) by One Way Stock, on Flickr

“What business should I start?” is a common question asked to those of us supporting small-business owners.

Sometimes the question is modified as people want a business that “will make lots of money” or will be a success.

We, by our position, are assumed to have some special understanding of what the market wants.

Okay, there may be some truth in that (or so we would like to believe), but the reality is a successful business comes from an understanding of two things.

The first understanding is of one’s self.

• What do you like to do?
• How passionate are you about the idea?
• What is your definition of success?
• How hard will you work?

The second understanding is what does the market want? And is the market willing to pay what you need in order to make a profit? In addition there are some related questions such as:

• Does the idea have long-term potential?
• What is the competition like now and what might it be in the future?
• What advantages do you have?

Put all of this together and you can perhaps understand why my typical answer is, “It depends.”

In support of my response, I offer four examples of businesses that are succeeding even though many of us may have thought it would not happen or that it would remain more of a hobby than a profitable venture.

My first example was watching my father-in-law selling used parts for John Deere combines from his farm in rural North Dakota. Over the years, his business grew as his market grew to encompass all of the Great Plains states. He also made international sales to Mexico, Canada and South America.

A second example can be found in this story about re-developing a detergent that worked in vintage washing machines. http://www.businessnewsdaily.com/9662-jon-charles-rosalies-zero-suds.html

Another opportunity is for the skills it takes to maintain certain products such as this report of an accordion repairman – http://www.greatbigstory.com/stories/new-york-city-s-last-accordion-repairman. Of course, you might also think about the buggy wheel maker. It’s true that this is not the industry it once was, but for some, it remains an opportunity.

Last, there even are opportunities in areas that would seem to be completely saturated. When I started in Oklahoma, one of the first people who came to my office wanted to market his barbeque sauce. As we talked about this, I remarked how crowded I saw this arena and the control that the big brands had. Yet, this was my lesson into the fact coverage by the big brands leaves holes or niches for others to fill. This person had a passion and tremendous perseverance. Over the next several years, he managed to find and capture a significant niche position that put him into grocery stores in several states/

Thus my response of “it depends.” Opportunities exist all over. Successful businesses require: a vision to see openings where most of us don’t; and, the capacity to move that idea to reality.

Photo (CC 2.0) by seaternity, on flickr

Do you ever look at the news and ask yourself how what you see might impact your business?

If you are like me, the chances are you don’t do a great deal of this.  Yes, we watch the news and may read the paper, a magazine and maybe a trade journal. Plus, we may spend time online going to various sites for information, education and entertainment.

I suspect, though, that we don’t spend a great deal of time reflecting on what it is we just saw and how it may impact our business. Oh, maybe with trade journals and small business articles, something focused on our livelihood, may merit some thought, but much of it we see and then quickly discard.

So this morning, I took the time to think about what I was reading and how items may be important or an opportunity for a small business.

While there is lots of things I could talk about, I want to focus on two news articles, one I see as a trend and another that’s partially fad but also has a trend. Here goes:

Pokemon Go – This augmented reality game has exploded. In just two days, 5 percent of Android devices downloaded the app. You may remember Pokemon, from Nintendo, from years past. Well, its back in a big way. Last evening, I happened to come across a location here in Bismarck where teens were gathering to be part of the game.

This article talks about how one small business has tried to capture some of this market.  While the store was lucky enough to be a home to a PokeStop, other stores are trying to determine how they might benefit from the game.

Takeaway: It’s probably a fad that will quickly come and just as quickly go. With the current market being teens, as soon as adults try to move in, they probably will go somewhere else. However, it does suggest two small business opportunities. The first opportunity comes from the fact that things can cycle around. Pokemon was big, left and now is back.

The second opportunity comes from what augmented reality might mean for small businesses. Imagine how you could use this in your store. And it will only get better.

Solar Impulse 2 – Going around the world in an aircraft powered only by solar energy. I have been watching this unfold for some time.  It doesn’t make the headlines often right now but will in the not too distant future. The project has only one flight leg left to complete its objective. It’s had its ups and downs (bad pun). And it’s a long way from commercial flights.

Takeaway: It’s a trend. Think about the opportunities, not only from solar energy, but, other technology involved from building materials to batteries to technology to the ability to follow the flights live with video and social media. And this is only one example. What about driverless cars? Or Google Streetview now offering a service to now go inside your store?

As with any opportunity, you need to determine if it is right for your business. But unless you are staying current, you may never have the chance.

Take 15 minutes today, check out the news. What opportunities are out there for you?

P.S. – Let me add one more. Check out what a piece of cardboard can do. How can this fit into your business?

Photo (CC) by One Way Stock, on Flickr

If starting a business is in your plans, determining your primary reason for such an effort is vital.

You may think that is an odd comment to make because people obviously start a business to make money. That’s true for some, but people start businesses for lots of reasons. Money is not always the primary goal.

So what are some of the other reasons why people want to open a business?

High on that list is to be able to enjoy their passion. These business owners take one of two paths. They may open a business based around their passion. For example, they love music, so they become a private music instructor. Or they may take a completely different path, such as becoming mobile app developer. That job brings in an income so they can live and do what they love, perhaps skiing.

Another reason people want to start their own business is simply to be in charge. They want to be their own boss.

Today we are having more people who start a business because they want to make a difference or are interested in social change. It’s great when they can merge their desire with their passion, but sometimes they simply find an idea to make money that allows them the opportunity to give to a particular social cause and also have the time to get involved in it.

TOMS, a shoe and eyewear company based in Playa de Rey, Calif., fits the former, but as it has grown, it is using its business idea as a means of producing money to support its nonprofit organization. For every pair of shoes TOMS sells, an impoverished child receives a pair of shoes, and when the company sells a pair of eyewear, part of the profit is used to save or restore the eyesight of people in developing countries.

People also start businesses because they see an opportunity or have an idea. This idea might fit with those who have a passion or those who want to make money. However, these people have a somewhat different drive than other small-business owners.

Owners who start a business because they think they can do it better – produce a better product or service, or they have a better production or distribution or management method – typically are much like those who see an opportunity.

There is one final primary group of people starting business. The people in this group are looking for a way to increase their household income.

The businesses they start may be full time or part time. They may want to supplement their income or replace it entirely with a larger stream of cash.

The reasons why someone wants to start his or her own business are many and varied. And each reason is as valid as the next. Plus, each reason can lead to a successful outcome. But no matter the reason for starting a business, it must be profitable in order to survive long term. So making money must remain in your plans, at least as a secondary goal.

It is possible to run a business and not aim to make a profit. But in that case, you actually are enjoying your hobby and not running a business.

 Understanding what you want from your business will help you design and build something that make your dreams real. So take the time to determine your motives.

Photo (CC) by Lauren, on Flickr

A common assumption among people wanting to start a business is that coming up with the idea is the hardest part.

When you talk with people already in business, though, they often comment that the business idea was the easiest step to take. Small-business owners mention that they didn’t realize how hard it would be to move from the idea stage to opening the doors.

As you go through your daily life, you see lots of new ideas every day. The hard part is knowing which ideas really are opportunities, then examining and understanding the opportunities that match your passion and offer the greatest return in whatever terms you wish to measure it.

The extremely small number of ideas that turn into successful businesses is a good indication of just how tough that can be.

One indication of the difficulty is seen in the commercial success of patents. The number of patents that are filed keeps ramping up, with well in excess of 100,000 U.S patent applications made each year. Yet only a very small portion, some say as little as one-tenth of 1 percent, ever will achieve any type of success.

The first hurdle for an idea is that it must solve a problem. That makes sense, but it goes beyond this. The problem must be one that a large enough group of people have and are looking for a solution.

In working on this hurdle, examine the marketplace. What solutions already exist? You might be surprised. What changes are these companies making to better serve the customer? Finally, what can you find about new ideas and new players coming out with even more potential solutions?

Just working through this first step of market analysis for your idea creates the setting for a second hurdle for many business owners. This second hurdle is knowing your own passion or determination to see your idea through every step of the process. Are you committed to spending a great deal of time and some money, and enduring lots of frustrations in moving your idea forward?

The dream of moving from an idea to making millions overnight is just a myth. Think instead in terms of years, and temper your idea of riches into being able to go out to lunch.

‘Build it and they will come’ is just another myth. Marketing is not easy, and your idea is just one of many trying to get the consumer’s attention.

Finally, be prepared to change and modify the idea as you get feedback. Plan on developing several prototypes before going to market.

Also be prepared for changing who might be the target market for your idea, and be ready to pivot as the world around you changes. Finally, be willing to drop the idea if things just don’t work out or you see a better idea coming your way.

Getting an idea is the first step. Now get ready to take more as you work to open the doors of your new business.

Photo (CC) Diana Parkhouse, on Flickr

Buying a business can be a great way to get started. You already know if the business can make it, plus you already have an existing market base who know you exist.

Before going too far into examining the business, you, as the prospective owner, need to consider what is prompting this decision to buy.

•   – Is the business in an area where you have a passion or some special talents?
•   – What is your current financial situation?
•   – How well do you tolerate risk?

If your answers are positive and you still want to go ahead, it is time to dig deeper. Everything may not be going as well as it seems on the outside.

Digging deeper means doing due diligence. As the future owner, you want to assure yourself that everything is as promised or listed and that you won’t find any surprises. Areas you need to examine include the business’s financial performance, the list of its current clientele and work that has been promised or is under way.

Also, you need to examine the legal and regulatory aspects of the company. Are all necessary permits and licenses in place, and has all the required paperwork been completed? You also must examine if the sale of the business triggers any new rules or regulations or negates any situations in which the business had been “grandfathered in” but the sale opens news requirements.

Don’t forget: If the business includes a physical space, that inspection of the building becomes part of your due diligence. Include contracts or leases that you will be assuming. Make sure you can assume these contractual obligations or whether they will need to be renegotiated.

In addition to contracts and leases, you need to see all financial records for the last three to five years, at a minimum. These records should include tax returns, proof that no tax or other liens exist against the business or the property, and a list of key employees and all partners/shareholders in the business.

As you work through the process, you probably will need to generate other documents, such as a letter of intent, confidentiality agreement and sales agreement. Make sure your agreement is detailed and includes everything.

Buying a business is a difficult task. For your protection, you need to consider building a team who includes a certified public accountant, attorney and mentor. A mentor can help you make sure you ask the right questions. The mentor also can be the person who keeps you focused on asking the tough questions.

Owning a business can be rewarding. Buying an existing business can offer some real advantages. Doing it right from the beginning is the first key.

For most of my farming friends, this was a way of life yet few people ever came by to see what we were doing, well maybe the relatives. There was no reason as many had grown up farming or were closely connected with the people who worked the land such as a relative or family friend.

Making Hay (CC) by Stephen, on Flickr

In my world, I couldn’t imagine getting people to come and pay money to load hay, shovel grain, feed cows, or just wander the farm.

Today, this has all changed. People are now looking for an experience, and agritourism experiences are capturing interest. For those of us old enough, we may remember the movie “City Slickers.” . Today, some of us want to relive those days or may be a desire to learn more about where our food comes from or to experience something our ancestors once did. For a third group, it is making connections with our history.

Agritourism can be a business opportunity. From pick-your-own to pumpkin patches and corn mazes to dude ranches to birding and wildlife to a bed and breakfast, all of these can be developed into a profitability venture. They can be near, or even in, the city but can also be well away from the beaten path.

Not only can such businesses be economic engines for the business owner but communities can also build around those efforts. Visitors will want to see other local sites, they are interested in local history and they want to spend money, for food, beverages, gas, souvenirs, etc. The community needs to be able and willing to offer those items as well as to help link agritourism and other business owners together as collaborators.

Admittedly, agritourism businesses may not be an opportunity for all. If you do not want people on your farm or ranch or if the peak demand times might interfere with existing operations (although you could always get more help but that is another issue), you may want to look for other ideas.

Now may be a great time for developing agritourism on your farm/ranch and in your community. They can be good business opportunities, a good fit into your existing business as well as your community and a great way to increase your return on the assets you already have.

Glenn Muske is the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality. Follow Glenn on Twitter: @gmuske