Starting Up an Unfamiliar Industry
If you've always dreamed of starting your business but have never known where to start, it's time to start researching and planning your dream venture. If you're unsure about what kind of business you should start, there are two basic questions you can always ask yourself: what do I know best and what do I wish I was doing?
The answer to either of these questions can be the beginning of your dream business. Going into a business in an area you know well has its advantages, but don't be dissuaded from starting up in an unfamiliar industry. Plenty of entrepreneurs find success when entering a new domain, but extra research and preparation is necessary.
This article discusses the difference between starting a business in an industry you know versus starting one in an unfamiliar industry. See FindLaw's Starting a Business section for more articles and resources to help you achieve your goals.
Starting a Business in a Familiar Industry
Starting a business in an industry you know has obvious advantages. You'll be starting out with an advantage in an industry where you have prior experience and expertise. Your personal network and business contacts can also be invaluable when getting your new business off the ground. For example, they can help you:
- Find employees;
- Secure financing;
- Locate suppliers/distributors; and
- Find customers.
Talk to people you know in the industry -- you may be surprised by what you find out if you express interest in starting up a new business. You may find older businesses that are willing to sell their business or customer list, or you may find that friends and colleagues have been thinking the same thing and want in. Start researching the expected start up costs, and prepare a business plan for how you plan on turning a profit and how long you believe it will take.
Starting a Business in an Unfamiliar Industry
Sometimes, people have worked in an industry for a long time, but have always wanted to pursue a job in an entirely different kind of business. In fact, many entrepreneurs actually prefer the excitement and additional challenges afforded by unfamiliar industries. It may require additional work, but there's no reason you can't be successful in another industry as long as you do your homework and have the necessary passion.
Before you throw yourself into a new arena, however, consider the following:
- Try before committing: there is almost always a way to "try before you buy" in any industry. Volunteering, taking a class, or engaging in part-time work can all be great ways to get your foot in the door and see if the industry really suits you.
- Evaluate your enjoyment: always be honest with yourself about how much you are, or aren't, enjoying yourself. What's the point in switching industries and wading in unfamiliar water if you aren't enjoying yourself?
- Analyze the business potential: if you find that you are enjoying yourself, it's time to crunch some numbers and seriously analyze the business potential of starting up a new business in that industry. Create a business plan outlining what you plan on selling, who your suppliers are and who you think your customers will be.
- Analyze the business risk: while it pays to be optimistic, never ignore the business risks when entering a new industry. Lay out what you see as the biggest potential impediments to success and always establish an escape plan to save yourself from financial ruin.
- Evaluate your commitment: once you've explored the new industry, analyzed the business potential and risk, and found that you enjoy your new role, it's time to assess your commitment to starting a new business. Starting a new business is hard enough, with most new businesses failing in their first year. Starting a business in an industry you are unfamiliar with is even more difficult, so if you aren't fully committed to making it work, it's time to reevaluate your plans.
If you have the drive, passion and desire to make a business work, it doesn't matter if you're familiar or not with an industry. As long as you're committed and take the time to do your homework and draw up a solid business plan, you can get your new business off to a successful start.
Get Legal Help When Starting Up in an Unfamiliar Industry
If you're starting a business in a new industry, chances are you will have a fairly steep learning curve. In addition to learning about the competition and the market in general, there also may be laws and regulations you haven't had to deal with before. Hiring a business and commercial law attorney when starting a business makes good sense, whether it's in a familiar or unfamiliar industry.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.