Finding a Small Business Niche

July 16, 2015 9:45 AM

I've wanted to start a small business for the last couple of years, but I'm not sure what product or service to provide. I enjoy sales, customer service, and accounting/finance work. I know most about (and work in) the food/beverage/hospitality industry. What commercial niche should my small business fill? What product or service should my business provide?

I'm looking for a business idea that would be scalable long-term and that requires a relatively low amount of money to start. It's fine with me if the idea isn't especially innovative or unique, though, and if the business's growth would likely be very slow.

Making money would be nice, but the primary reason I want to do this is because I'm interested in learning the skills involved in running my own business. I especially like "doing the books" and working with clients.

I also really love the thrill of not knowing how much you're going to make on a particular day or with a particular client. I like to hustle, and enjoy working very hard and getting creative in the hopes of a big payoff. Salary work is great, but it doesn't provide that sort of thrill, and I'm hoping for another taste of it through owning my own business.

Business ideas that I've toyed with so far have been beginning a very small urban orchard, beginning a flower subscription service, or running a (very) small fleet of vending machines. However, I don't have a green thumb or much land or much starting capital ($5-7K is the max initial outlay I can make), so those aren't especially practical ideas. They're mostly just ideas I've hit on because I'm used to food service, so selling food and other perishables is familiar to me. I'd be very open to completely different ideas. If it makes a difference, I'm in the Washington, DC area (NOVA).

posted by rue72 to Work & Money (7 answers total)

I think it's a good idea to stick with what you know. But it sounds like you're wide open to ideas. Why not look at what research can tell you about 1) successful small businesses and 2) demographics in your area, and go from there? (I think with the amount you have to invest, some kind of service would make sense.)
posted by cotton dress sock at 10:02 AM on July 16, 2015

Flower businesses are potentially lucrative if you have enough standing orders and clients. Think about how far you could stretch flowers... My neighbour has a business maintaining plants in corporate offices and has 400 clients. But the average earn every month is something like $15 per client. You need to offer a lot of services if you plan to scale. A fruit and flower stand in a good outdoor location could be more profitable and cost less to set up.
posted by parmanparman at 11:06 AM on July 16, 2015

You might find it interesting to read This tiny burrito shop has legs. I gathered what info I could on what started out as a part-time delivery only place and later expanded to a full restaurant. Then see if that inspires you to find a way to start small and make it scalable with something you find interesting.
posted by Michele in California at 11:17 AM on July 16, 2015

If you enjoy the accounting and finance side of things, could you set up a bookkeeping business? Lots of small businesses don't have the skills or interest to do it themselves. And it's something you could do on your own time initially while you get things off the ground - it's going to be hard to start a food service business while also holding down a salaried job in food service, because the hours are likely to overlap.
posted by une_heure_pleine at 8:30 PM on July 16, 2015

Response by poster: OK, I should have been more specific. I want to sell something. If anyone has ideas about what I could/should sell, that would be great. So far, my ideas have been: fruit, flowers, snacks.

What has drawn me to those ideas is that they have relatively high profit margins and don't require a lot of expertise to produce/process or sell. I'm wondering if anyone has any other ideas, though. I think my background in food service is leading me to only consider food/perishables, when there are a lot of other potential products out there.

Selling my personal services, like selling my services as a bookkeeper, isn't scalable, so ideas for that are not going to work for this. I need to sell literal, tangible products of some sort, because that *is* scalable. I'd be OK being a distributor or middleman, but ideally I'd manufacture/grow/whatever the product myself.

My main constraint is that I can't break the bank getting my initial inventory or in start up costs in general. My main "special snowflake" detail is that I'm in the city, so rent and land is relatively hard to come by, but customers/clients aren't.
posted by rue72 at 11:09 PM on July 16, 2015 [1 favorite]

Several years ago, when I worked in an office in Phoenix, AZ, there was a man who can around every couple of weeks selling Mountain Man snacks.

I don't know if there's a cottage industry law in DC/NOVA, but I imagine homemade goodies packaged nicely would make a killing sold office to office like this.
posted by LyndsayMW at 11:51 AM on July 17, 2015

I will suggest this is something that you will need to research and not something that will get solved by strangers on the Internet tossing out specific suggestions. I have had to come up with niche answers that work for me and fit narrow parameters. It has taken me a long time, in part because I was ill for a long time. I will suggest that a good answer to this will most likely not happen overnight, even though there is no reason to suggest it will take you the many years it has taken me (thanks to my medical condition).

Based on my experiences, I will suggest that you need to start a file of some sort and your first order of business should be to more clearly flesh out your parameters and limitations and criteria. List dollar amounts for what you can spend initially, how much time per week you can devote to this, how that time will be distributed (there is a big difference between "7 hours, one hour per night" and "7 hours, all in a big block on my day off") and any other real world details concerning process, your personal strengths and weaknesses, etc.

Then start looking for stories or real world examples of something that fits one or more or your criteria. You can look for both stories (books, articles) about things that seem to meet some of your criteria and you can also look for actual businesses that seem to meet your criteria and try to learn more about them and, as best you can, study what they did and see how that applies to your situation. One of the earliest things I saw that met some of my criteria was web comics that supported their author. I would read through them and examine the actual website, as well as read articles about them. I wanted to understand them as a business model. I was curious about author process and how it was monetized, etc, in addition to what made the comic per se a good comic.

These days, there is the possibility of scaling a service business in the form of writing a computer program or web app and starting an online service. If you don't have the background to write code for that, there is probably no reason to do that. But, these days, it is a potential option if you want to consider that angle. You cold look for articles on "SAAS" (Software As A Service) businesses.

Best of luck.
posted by Michele in California at 1:18 PM on July 19, 2015