Financing: If you have to go into debt to start a business (avoiding this in a bear market is preferable), don’t put it all on high-interest credit cards. You may not be able to get a small business loan or home equity loan unless (1) your credit rating is good AND (2) you have a recent pattern of decent income. Some organizations now negotiate for lower interest payments on credit cards.

Legal Matters: Tax code? Local ordinances? State licenses? Probability of lawsuits? OSHA?

Material Handling: Do you have to store an inventory? Do local ordinances limit or otherwise regulate storage (e.g., of flammable or obstructive material)? Are your materials shipped from overseas, and is supply reliable? If you ship overseas, what are the probable costs and procedures?

Competitiveness of the Field: Are you the only guy on your turf or in your niche? If not, what makes you stand out in the crowd from the customer’s point of view? Can you work towards a unique selling proposition?

Potential Market: Do large groups of people have a crying need for what you offer? Do specific types of people really want what you offer? Is your market local or international? Is the timing right?

Marketers say you should start with a market that has a crying need, and only then work your way toward a product or service to meet that need.

Initial Cost: One can easily imagine a start-up cost for a business that is clearly out of reach, and on the flip side one that is suspiciously low for a given business, but what about in the middle? They say it takes money to make money, and a reasonable investment is not out of line. You must weigh other factors if the initial cost for starting a business is on the high side of this “middle.”

Hidden Costs: For an inexperienced newbie and sometimes even for old hands, there may be unexpected and unwelcome extra costs: fees and licenses with the state, a subsidiary service necessary for something you have launched to be successful, a piece of equipment breaks, shipping and handling fees you forgot or an unexpected percentage or category of tax, insurance, product returns.

Hidden costs lead one to find out as much as possible, to ask those who have gone before, and to leave a financial cushion.

Time Period before You Start Making Money: For many traditional businesses, it will be two or three years before a new business breaks the line between “in the red” and “in the black.” Websites can take six months to begin to be noticed by directories, search engines, and those doing the searching. Other businesses do not take as long.

Your Skills and Interests: Is the business you are considering something to which you could commit for five to ten years? Is it something you can tolerate, does it spark mild interest, is it something you like but for which you have no knack, or is it something you can put your heart and soul into? Best choose the latter if possible.

Income Potential: If the income potential is up in the stratosphere, is yours the kind of balloon that can reasonably be expected to make it there? If the income potential is low, can you afford to do the job long term? What income do you need to maintain your quality of living? To survive? To meet your dreams?

Customer Service and Resources: If your business comes under someone else’s umbrella (like a franchise or affiliate program) or relies heavily on some service, do you have phone support, email-only support, limited customer service hours … what is available for troubleshooting?

Work Load: What kind of time commitment is involved to be successful in the business? Is it seasonal? Does it require more time at the beginning or is it steady throughout? How will the work load affect your family? Are there training resources?

Peter Rubel