11 Qualities of a Perfect Small Business

11 Qualities of a Perfect Small Business
By Craig Wallin

If you plan to start a small business, what qualities should the business have that make it more likely to be successful, profitable and make you happy to go to work each day? Here are eleven that have been proven to work by thousands of successful small business owners.
1. The business can be home based. Operating a small business out of your home can be a real time and money saver. Without a commute, vehicle operating costs are reduced and commuting time is less than a minute to your home office or shop. In addition, there is no store, office or shop rent to pay, along with the extra cost of utilities and maintenance. Start up costs are reduced by working out of your home as well, allowing you to conserve funds for other business expenses.
2. The business is about something you enjoy. Almost all successful business owners love what they do. As Groucho Marx once said, "Find something you love to do so much, you'll do it for nothing. Then do it so well, people will pay you to do it." Folks who love dogs often start a pet related business, like pet sitting. Book lovers could start an online used book business. The old adage "Do what you love and the money will follow" really is true, so take a serious look at any new business idea to make sure it is work you will enjoy. If you do, you're almost sure to succeed, both in profits and personal satisfaction.

3. The business is different than the competition. What can you do to set your business apart from your other similar businesses in your area or field? Can you offer more choices that make your customers choose you? A flower grower, for example, can offer larger cut flower bouquets. An errand or courier service can offer extended hours. A window cleaner can include screen cleaning at no extra charge, or add-on services such as gutter cleaning or screen repair, that the competition does not.
4. The business does not require a lot of inventory. You don't need to be an Einstein to understand this equation: INVENTORY = OVERHEAD = EXPENSE. Find a business model that does not require a lot of inventory, or find ways to reduce inventory costs. An example of that could be setting up a drop-ship arrangement with suppliers to keep your inventory to a minimum. Another could be providing information products as CDs or E-books rather than as traditional printed and bound books.
5. The business is based on human needs rather than wants. If your small business fits this description, you will have a much more stable, recession proof business. Do you supply a product or service (food products or grocery shopping errands for home-bound seniors, for example) that is more necessity than choice? If you ignore this quality, and provide , for example, hand-made jewelry or other "discretionary" products and services, you may find yourself a victim of any economic downturn in the future.
6. The business has multiple customers, not just a few. Whatever your choice of business products or services, aim for a broad customer base instead of just one or a few. That will protect you in case your largest customer dumps you unexpectedly. A friend whose specialty was writing grant proposals for a large school district lost two thirds of his income when they turned to another provider. Lesson learned: Many customers mean you are in charge, not the customer!
7. The business has several income streams, not just one. Your local car dealer is a good example, as they get a big chunk of their income from service and repair work, as well as car sales. A window cleaning service can offer additional related services. Property inspectors might diversify into property preservation and maintenance. Errand runners can offer personal shopping and pet sitters can offer house sitting or dog walking services. Your imagination is the only limit here.
8. Customers pay for the products or services immediately. There is nothing quite like approaching the end of the month with business bills to pay and nothing but a stack of accounts receivable to offset them! Find a small business that offers immediate cash. Service businesses are especially good - examples include window cleaning service, yard maintenance service, pet sitting, handyman service, etc.
If you sell a product, try to structure the business in such a way that you get paid when you deliver the product. Selling on Ebay, or at a Saturday market are good examples of this. A friend who sells potted herbs at the Farmer's market takes only cash. Her herbs cost $6 or so, and a $2,000 cash-in-hand Saturday is commonplace. Her biggest complaint: Those customers who spend $6 and hand her a $100 dollar bill in payment.
9. The business has low start-up costs. Most of us don't qualify for a government grant or have a rich uncle. That's why it is important to make sure that any small business opportunity has affordable startup costs. Don't make the mistake of singing up for an expensive franchise and shackle yourself with high monthly payments you may have trouble repaying while you're growing the business.
10. The business earns repeat income. Can your small business supply you with regular repeat income? Many businesses sell a product or service that the customer only needs once, like a sauna or roofing. After the sale, it's off to find the next customer. That can get expensive. A better business model focuses on repeat customers so the marketing costs are low. Examples include repeat services such as a window washing business or pet sitting, or consumable products such as vitamins that customers buy again and again.

11. The business does not depend too much on employees. Finding good employees and keeping them happy and productive is one of the biggest challenges facing small business owners. Instead, think about keeping your business small enough that you can handle it all yourself. The time you won't have to devote to managerial and administrative overhead will be yours to do with as you please, so enjoy those extra hours doing something you love.
A small business does not need to have all the listed qualities to succeed. The more desirable qualities a small business has, the more likely it is to be a satisfying, profitable and long-lasting business for you. In the book "The Millionaire Next Door", the authors point out that many of the millionaires they interviewed owned a small business that had many of these qualities. Add the ability to live "below your income" so you can save and invest the difference, and you too could be on your way to your first million.
About the Author: Craig Wallin is the author of over ten books about home-based businesses, and the editor of Extra Income Bulletin, a resource about honest, home-based businesses you can start on a shoestring. To learn more about starting the perfect small business for you, go to: http://extraincomebulletin.co/
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