Tips

1. Choosing a business you enjoy is of utmost importance. Think of it as picking a lifetime mate!

2. The most common mistake and the most costly one is not picking the right business to begin with. Before you decide, keep in mind that this is the time for soul-searching, gaining experience in the business, conducting research and even test marketing.

3. One of the biggest risks in starting a moonlight business is that your job might conflict with your business. This can be avoided by compartmentalizing your business in every way: separate time, place and product or service.

4. Take your sweet time. Since your selection will be your single most important business decision, wait for that one opportunity that has everything you are seeking. Think about jumping a hurdle: wouldn't you rather risk getting over a one foot hurdle than a seven foot one?

5. If you open a service station, the price of your product (gasoline) is going to be controlled by what other operators sell for on the same corner. As Warren Buffett has said, "You're only as smart as your dumbest competitor." In other words, you are in a commodity business and must have the lowest cost in order to survive. On the other hand, if grandma's candies are really good, then over time you can build a brand name and achieve pricing power. Your candy customers won't be taking price bids on candy when the buy it for their sweethearts!

6. Work for someone in the same business.

7. Creating a company where all principal activities are outsourced. Hollow corporations are appropriate for start-up entrepreneurs.

8. You have always dreamed of opening a hardware store but now that you're ready to start you realize that the Home Depots of the world would be too hard to challenge. You should:
a. Find a niche segment in the hardware business that you can specialize in.
b. Find another business.
c. Go to work for one of the "big box" hardware chains and see if any needs exist that you could uniquely fill.

9. Service businesses generally have pricing power and are not dependant on competing with the lowest price in town.