| Choosing the right business is the first
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| | side of the spectrum from those who
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| step to entrepreneurial success.
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| | believe in safety in numbers are those
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| According to studies made by the U.S.
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| | who think that they are better off in a
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| Small Business Administration, only 66.0
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| | business with fewer competitors. This is
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| percent of small businesses survive its
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| | the idea behind the strategy of focusing
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| first two years, and survival rate lowers
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| | on a market niche, which has proven to be
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| to 39.5 percent in at least 6 years. In
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| | apt, even a lifesaver, for many small and
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| 2000, it is estimated that 550,000 small
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| | home-based businesses. Niche entails
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| businesses closed, and business failure
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| | offering unique products or services to a
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| for one-person businesses is about 38.2
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| | few concentrated markets.
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| percent.
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| | 5. Rapid Growth. You may also want to
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| Your goal, therefore, as an entrepreneur
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| | start a business that has enjoyed fast
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| is to find a business that stands a
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| | growth in the past years. A rapidly
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| greater chance at success. You will need
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| | growing business sector, where many new
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| to determine what you can and cannot do,
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| | businesses continue to operate, shows
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| research on the potential market and how
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| | that there is great demand for the
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| other similar businesses are doing, and
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| | product; the market can absorb new
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| what works well in your area or selected
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| | entrants; and if by looking at the size
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| business medium.
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| | of businesses operating, the market may
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| 1. Less Money Out. The first school of
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| | be profitable even for one-person
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| thought focuses on the amount of
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| | businesses.
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| resources that you have. The kind of
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| | Using data from the Bureau of Census, you
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| business that you start depends on the
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| | will find that the sectors that enjoyed
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| amount of capital you can raise. If you
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| | the most rapid growth from 1972 to 1987
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| have deep pockets, you can go all out
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| | include the following: Gift, novelty and
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| with your business - getting first-rate
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| | souvenir stores (up 216%); Hobby, toy and
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| equipment and furnishings, hiring
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| | game shops (up 180%); book stores (up
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| employees, launching the business in
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| | 137%); Sporting good stores and bicycle
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| grand style, and buying loads of
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| | shops (up 127%); and florists (up by
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| inventory. However, if you have little
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| | 108%).
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| capital, all you can do is to stretch
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| | The sectors that saw a decrease include:
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| what you have and start the business on a
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| | Drinking places (down 17%); Household
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| much smaller scale.
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| | appliance stores (down 15%); and variety
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| You may have a wonderful concept for a
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| | stores (down 5%). The reasons for the
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| children's bookstore with play and
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| | shrinking number of businesses in these
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| storytelling sections for kids, and a
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| | sectors include overcrowding and
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| coffee shop for the adults. That kind of
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| | declining customer interest and demand.
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| vision requires vast amounts of capital -
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| | 6. Failure Rate Method. You may check the
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| from inventory, lease, furnishings and
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| | businesses with the greatest number of
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| store docor. If you cannot finance your
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| | failure record. Dun and Bradstreet (http:
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| vision, you may need to downscale your
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| | /www.dnb.com) publishes a yearly Business
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| business and instead find ways to start
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| | Failure Record report. This report is not
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| on this route but without the expense.
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| | merely an estimate; but represent
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| One way is to start an e-commerce site
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| | complete tallies of business failures.
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| where you will not have to pay for
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| | D&B defines business failures as those
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| furnishings, expensive rent and other
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| | that "ceased operations following
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| overhead that a retail store will need.
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| | assignment or bankruptcy; ceased
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| 2. Novelty and Excitement. Another
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| | operations with losses to creditors after
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| strategy for selecting a business is to
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| | such actions as foreclosure or
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| start one that is currently hot, hip and
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| | attachment; voluntarily withdrew leaving
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| new. In the Philippines, for example,
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| | unpaid debts; were involved in court
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| pearl shakes - an innovative cool
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| | actions such as receivership,
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| beverage drink in natural flavors mixed
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| | reorganization or arrangement; or
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| with "pearls," or dark, spherical, chewy
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| | voluntarily compromised with creditors."
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| balls made from yam and tapioca -- became
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| | In 1997, the businesses with the lowest
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| the hottest craze in town. Mom and pop
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| | failure rates (per 1,000 listed concerns)
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| stalls and cafes offering this new drink
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| | include drug and proprietary stores (33);
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| popped up all over the metropolitan
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| | fuel dealers (37); sewing, needlework and
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| Manila.
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| | piece goods (41), used merchandise stores
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| You can join in the fray, and start a
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| | (47); and liquor store (52). On the other
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| business that has already proven itself
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| | hand, non-store retailers (216); trucking
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| to be a moneymaker for others. However,
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| | and warehousing (208); fishing, hunting
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| there is danger in adopting a start-up
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| | and trapping (273) are the businesses
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| strategy on prior demand--demand already
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| | with the highest failure records.
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| created by others. What if the business
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| | 7. Biggest Payoff. Another logical choice
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| runs out of steam, and the novelty and
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| | for choosing a business is to look for
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| excitement that pushed it initially wears
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| | those that yields the best
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| thin? You may be faced with cutthroat
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| | return-on-investment. This approach
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| competition, with price-cutting as the
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| | involves "checking through the operating
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| ultimate marketing weapon of choice.
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| | results for different business types to
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| 3. Safety in Numbers. As a new
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| | find those with high percentages of
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| entrepreneur, you may also consider a
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| | operating profit." The best source of
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| business that has already proven popular,
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| | data that would allow you to determine an
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| dependable with consistent demand, and
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| | industry's operating profit is the Risk
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| can be found everywhere. Common
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| | Management Association's http:/
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| businesses include eating places,
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| | www.rmahq.org Annual Statement Studies.
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| groceries, used merchandise stores, gift
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| | This report offers financial statement
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| and novelty stores. If these businesses
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| | ratios of small and medium-sized
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| have staying power and are frequently
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| | businesses on about 600 industries. The
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| found, then they must be profitable,
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| | book costs $145 for non-members, but
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| right? Well, not always. There is such
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| | check with your local library if they
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| thing called "market over saturation." A
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| | carry the publication.
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| small town may be able to accommodate
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| | Whatever business you decide to start,
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| only one gift shop. Add another one and
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| | the key is to put up an enterprise that
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| you may be stretching the market too
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| | fills an unmet need of the market and to
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| thin, and end up in the dustbin.
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| | look for new niches to dominate.
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| 4. The Fewer, the Better. On the other
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