Want to know something gut wrenching?
Knowing you have something special to share with this world — but not moving ahead because you have no idea where to start.
You know you’re meant to do something great, and you’re ready and motivated to get started, but your mind races…
- What kind of business should I start?
- If I were smarter, I’d be able to figure this out.
- Am I even meant to do this?
- I should be so much further ahead by now.
When I started my business, I struggled with this, too. I wanted to do so many things, and it took me years to realize the multipassionate path I was meant to follow. My personal battle was having too many business ideas and not knowing which one to choose.
This uncertainty can trigger an avalanche of misery, frustration, stress, self-doubt, and wasted time stuck in entrepreneurial limbo.
I created this guide to give you a roadmap to build a business and life you love. We’ll walk through five steps to figuring out what kind of business to start:
- Why are you starting your business?
- What size business do you want?
- Who will you serve?
- What’s your business model?
- How to brainstorm business ideas
And, if you need a spark of inspiration, you can jump down to my big list of 25 businesses you can start for less than $100.
What Kind of Business Should You Start?
Starting the right business, whether you want to launch a multinational empire or a one-person shop, comes down to the same foundation: clarity.
To decide on a business idea, you need to get clear on:
- What you ultimately want
- The people you’re called to serve
- The industry you most align with
- Your personal strengths
Your goals and strengths are giant clues to knowing how you can make a positive impact and profit. Understanding them will clarify which type of business model is right for you.
Follow the steps below to decide what kind of business to start.
Note: Each step includes action items to help you find clarity. Grab a journal or a notebook, or open a new document, and WRITE your answers; don’t just THINK them.
Quiet your inner perfectionist — we don’t need her here. Just write whatever comes to mind, and be 100% real with yourself. As with everything in your business, aim for progress, not perfection.
1. Why Are You Starting Your Business?
Even if you don’t have a clear business idea or model yet, you need to get clear on the reason you want to start a business. What will this business mean for your life? For people you’ll serve? For an industry you care about?
If your only motivation for a business idea is to make money, get famous, or gain power… that’s a red flag. Money is awesome, but it’s not a good enough reason to start a business.
That’s because starting and running a business is hard. You’ll face many challenges, and when the doody hits the fan, money is almost never enough to keep you going. You will, however, show up day in and day out for a cause or work you’re passionate about, so start with that.
The money will follow.
Insight to Action
Answer these questions about any business ideas tumbling around in your head:
- Why do you really want to start this business? What’s your personal motivation? List as many reasons as come to mind.
- What’s the story behind your business? What’s inspiring you to start it? What are you taking a stand for? What do you believe in?
- Why should your company exist? Whose lives/businesses are going to change as a result of it?
- What future vision of the world will you and your business bring to life?
Got a long list of viable business ideas but no idea which direction to go first? Take my quiz to get even more clarity: What Kind of Entrepreneur Are You?
2. What Size Business Do You Want?
I won’t lie: Size matters. At least, it matters when it comes to running a business.
How big you want your business to be depends on how much you’d like to earn, what your strengths are; and how much time, effort, and responsibility you want to have as a business owner. Will you manage employees and work full-time, or work solo three days a week?
Successful businesses come in lots of shapes, sizes, and models. To keep things simple, I put them in three main categories:
- Big Business: These are industry giants. They employ hundreds of thousands of people and change industries and the world in big ways. Think Amazon, Google, or Whole Foods. Most of these companies had modest beginnings, but they’ve evolved into iconic behemoths.
- Small Business: This is traditionally a company with less than 500 employees, but you can think of according to sales, assets, or net profits, too. When I think of small business, I think of a range of companies like local bakeries, home builders, independent clothing shops, restaurants, web design companies, marketing agencies, and yoga studios.
- Micro Business. This could be a freelancer or one-person shop, a solopreneur with an assistant, or a small business with five or fewer employees. Many people in the entrepreneurial world also call it a “lifestyle business.”
You don’t have to strive for huge numbers in revenue, customers, or employees just to stroke your ego or live up to some sort of startup wet dream*. Small is beautiful, and it’s the perfect size for many of us.
*Startup wet dream (n): An unsatisfying affair in which one starts a company devoid of passion or purpose, instead motivated by money, fame, or power.
Insight to Action
Practice envisioning the size and scope of your dream business.
- When I envision my dream business, I envision a _______ business (big, small, micro).
- I’d love to have ______ (number of) employees in a year or so. But I can initially get going with just _______.
- I run my business from my __________ (home office, office building, anywhere).
- My goal is to _____________ (run my business through the foreseeable future; pass it along to my kids, sell my business and exit the company, etc.).
- In the next 12 months, I’d love my company to generate $_________ in revenue (total amount before expenses), make $_____ in net profit (total amount AFTER expenses) and I’ll be able to take home $__________ as personal income (what I pay myself).*
*Substitute your country’s currency if the $ doesn’t apply to you!
3. Who Will You Serve?
Yes, you have to be passionate about what you create and the work you do. But the people you serve are the most important part of your business.
Keep in mind that you’ll have to change your products and services over time. Markets move. Tastes change. Technology evolves. Competition emerges. You’ll be forced to shift and evolve, too.
But if you love your customers, you’ll win. Focus your mission on caring for the people behind your business, and you’ll have the best possible chance at long-term success.
The trust, loyalty, and relationships you develop will help you weather any storm.
Thinking about the people you’re drawn to serve will likely help you get clearer on your business idea — even if you don’t know yet exactly what kind of product or service you’ll serve them with.
Reality check: If you can’t imagine any people you want to serve, it’s probably a sign that starting a business isn’t the right path for you right now. A good business only exists to provide outstanding value for others.
Insight to Action
Think about the person your business will serve.
- Who exactly is your product or service for?
- What are their day-to-day lives like?
- What problems do they need to solve?
- What worries or struggles keep them up at night?
- What’s their dream outcome or solution?
- What do they care about in the world?
- What do they believe in and value? What’s their worldview?
4. What’s Your Business Model?
You’ll likely run either a product- or service-based business, or a combination of both.
When you sell services, your customer pays you to do work. You have to show up and put in time for the business to earn revenue.
When you sell products, your customer pays you for physical or digital products you’ve designed or created. Once you create something, the business can sell it, even when you don’t physically show up.
Choosing a business model for yourself is all about self awareness. Focus on your strengths.
For example, if you love being behind the scenes, writing books and creating courses, you could sell those products. If you like interacting with people or getting up on stage, you could run a service-based coaching and speaking business. If you want to balance both, opt for a combination.
Insight to Action
Think about how your business will bring in money.
- My customers are __________________. They pay me to ___________________.
- Name three companies or people who are making money the way you want to.
- What steps did they take to build what they’ve built? Hint: Look for articles and interviews online, follow them on social media, become their customer, engage with them.
- What are the pitfalls of this model and/or industry?
- What kind of capital, if any, does it take to start this kind of business?
- Based on your research, what kind of skills does it take to hit it out of the park with this model?
- Do you have these skills? If not, what steps can you take to build them?
5. How to Brainstorm Business Ideas
This is the fun step! Well, I hope they were all fun, but with this one, you get to let your imagination run wild.
This is where you get to imagine all the possible businesses you could start.
Coming up totally cold? Here are some ways to generate business ideas:
- Scratch your own itch. Think about your day-to-day activities, even the mundane ones like making your bed, cooking a meal, and doing laundry. Think about conversations and interactions with your friends, your family, and your coworkers. Is there a recurring problem or frustration you want a better solution for?
- Mine your strengths, skills, and interests: What comes naturally to you? How can you use your strengths, skills, and gifts to solve problems for others?
- Shop around for inspiration: Cruise around sites like Inc Magazine, Entrepreneur Magazine, Fast Company, and local business publications. Their profiles of businesses and business owners could spark a good idea.
- Get moving: Creativity lives in your body, not your mind. Some of my best and most inspired ideas have come during a spin class, dance class, or lifting weights at the gym. Our bodies are designed to move, and research shows our brains function better after exercise.
- Ask for help: Whether you believe in God, The Universe, or a general and benevolent Higher Power, pray for help and be willing and open to receive guidance.
Entertain every idea that comes to mind. Don’t dismiss it because you think something’s been done before — no one has done it with your unique combination of interests and strengths before.
Insight to Action
Step 1. In your journal, notebook, doc, or mindmap, jot down all the business ideas you can think of. Aim for at least 10 to stretch your creativity, but keep going if you’ve got more!
Step 2. Now get clear about which ideas are most viable. In a new spreadsheet or piece of paper, create six columns, and fill in these fields for each idea.
- Business idea: Describe the idea.
- Problem: What problem does this business solve?
- Solution: What unique solution does your idea offer for the problem?
- Clear revenue model (Y/N): Do you know how the business makes money?
- Competition (Y/N): Is there competition in the marketplace?
- Target audience: Describe the people you’ll serve.
25 Businesses You Can Start for Less than $100
Starting a business is more affordable and simpler than any other time in history. Why?
Because the internet helps you:
- Connect with customers all over the world.
- Learn how to do anything you need to start a business. (When in doubt, Google it!)
- Find free tools to cover everything you need to run a business smoothly.
Want some free tools right now? My comprehensive guide offers 322+ FREE business tools and resources to help you plan, design, market, and manage your way to success. Get your free tools guide here.
If you want to, you can start a business on a shoestring budget and bootstrap your way to success. (The business world sure does love a shoe-based metaphor.)
To get your neurons firing, here are 25 different types of small business ideas you can start with less than $100 (plus your skills, talent, and grit).
Service: Sell Your Time
1. Coaching or consulting
2. Graphic design
Product: Sell Your Creations
6. Books and ebooks.
7. Online courses.
8. Artwork and crafts.
9. Online resale (like used clothes or toys).
10. Designs for print-on-demand products.
Combination: Sell Your Expertise or Talent
11. Career or personal development coaching, speaking, and courses.
12. Stand-up comedy or music albums and live performance.
13. Acting performances and online masterclasses.
14. Freelance journalism and book sales.
15. Needlecraft supplies and classes.
SaaS (Software as a Service): Sell Software or Apps
16. To-do list application
17. Project management tool
18. Word processing program
19. Mobile gaming app
20. Photo-editing software
Content: Sell Advertising or Subscriptions
21. Paid newsletter subscription.
22. YouTube videos with ads.
23. Blog with affiliate links.
24. Local news site with advertisers and subscribers.
25. Social media influencer.
Bonus: Licensing is when you sell your idea or technology to other companies who serve your target customers. You build a brand or concept and make money by letting others use it in their businesses.
Will Your Business Idea Work?
No one has a magical business crystal ball. We can’t predict what will or won’t work. There are no silver bullets or short-cuts. Business is an all-in kind of adventure.
Always stay vigilant, flexible, and willing to to grow. Your new business will be an ongoing dance of testing, learning, gaining experience, iterating, and evolving your offer. Be willing to start small and slow — you’ll build momentum and confidence as you go.
Success in your business will require research, strategy, perseverance, listening to your gut, consistent action, and never-ending course correction.
Are you here for it?
If you love this process, love your business, and — above all — love the people you serve with all of your heart, I know you can do this.