As a serial entrepreneur, here are a few tips I'll offer, learned from the school of hard knocks:
1. Starting a business because you need extra money or want to work for yourself are not good reasons. The best reason is because you have an idea the world truly needs.
2. Focus on ideas with very low initial capital requirements. Usually services (such as landscaping, painting, consulting, etc.) fit into this mold. Retail and restaurant ideas do not because they usually require that you spend lots of money BEFORE you know if a single customer will walk in the door. I cannot tell you how many well-meaning people I've seen lose hundreds of thousands on retail/restaurants in my area in the past five years because they poured lots of money into beautiful shops and no one ever showed up to shop or eat.
3. Aim for profitability as soon as possible. My best businesses hit cash flow profitability on day one and total break even profitability on day two.
4. Give yourself a stop loss. For instance, if you launch your idea and spend $XXX dollars and YYY months of your time and are not profitable, pull the plug (or try to sell what assets you have) before you lose your life savings and a decade of your life. This one is very important because once you start, it will feel like, "If I just do a little more, I'll get there."
5. Right now, buying a business may be more efficient than starting one. You can check out www.bizbuysell.com
. You'll note that many businesses sell for between 2x - 3x annual owner profit. Take these numbers with a bit of a grain of salt, do deep due diligence and walk away if you discover the seller is either lying or unsure of his/her financials (or renegotiate the deal.) Many sellers will offer some seller-financing and/or some partial or complete earn out where their take is dependent on your results. So it's definitely worth shopping around. Also, be wary of business brokers; they typically represent the seller, not the buyer. All that said, it still may be better to buy vs. build given the current market. If I wanted to run a business now, I'd probably buy one given that prices are at or near historical lows.