Which micro-business is right for you? – #2 in a series

If you followed the logic of the previous post, you might consider balancing the power and glory of a full B2B micro-business against the freedom of a one-person enterprise which leverages the Internet or deals directly with customers.

There are many variables to consider, but the great thing is that most are under your direct  control. Even financing is no longer the barrier it once was. Many self-employed people fund their fledgling enterprise with credit cards.

If you need enormous amounts of money to kick-start your new micro-business, there is something wrong with your business plan. You are still following the hallucinogenic logic of wild and wacky Internet start-ups. Forget the smoke and mirrors game, go with a plan that allows you to model your business on a small scale and see if it works first!

If you can’t model your business with a relatively low-cost pilot project, then it is a high risk investment and is not something you should consider for self-employment.

If you are serious about supporting yourself with your micro-business, then avoid high-risk development projects. High-risk in this instance means that you must develop a technology or an infrastructure before you can begin to deal with the usual business challenges of finding customers and meeting their needs profitably. High risk development projects are best handled by large corporations or a consortium of companies.

What is a low-risk investment? If you are selling food, a low risk investment is tuning the menu to optimize sales. If you are selling craft work, a low risk investment is varying your product mix, but using the same basic raw materials and technology.

Be warned that a low-risk investment is easily copied by others, so you need to ensure that the product is only a fraction of what you actually deliver. Your customer service should be so outstanding that when others copy your product offerings, it makes no difference in your sales to good customers. Customers who buy on price alone are not reliable customers and will not build your micro-business.

To succeed as a micro-business, you must stand out of the crowd. You cannot succeed as a purveyor of commodity products. Your business plan must describe your strategy for success in a particular niche that gives you a competitive advantage.

Here are some questions you should ask yourself:

Why is a customer going to buy my product or service and not go to Wal-Mart, etc. and get it for less?

How do I satisfy this customer and make enough profit to justify doing it again.

What risks am I exposing myself to if my customer misuses my product or service?

If all of these are covered, is there any joy in running this business?

This may sound daunting, but every successful micro-business owner manages to find or create a situation that answers these questions and provides them with income and a challenge worth taking up.

May you do the same!