I’m thinking about starting a small business and would appreciate some advice from people who have been through the process. I have around $1 million available to invest, but I don’t want to rush into something without doing proper research. What types of small businesses would you consider today, and where would you recommend starting? I’m especially interested in understanding how to choose the right idea, test the market, manage the initial investment, and avoid common mistakes. Any practical advice or lessons from your own experience would be greatly appreciated.
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I would first give thought as to why you are interested in starting a business. Are you looking for income (there are much easier ways), to get really rich (years or decades of hard work and luck), or just for identity/ self satisfaction of being a business owner?
From the little information you’ve provided it seems you may be more interested in starting or owning a business than in fulfilling an unmet or under-met need in the market. Identifying that unmet /under-met need, and having a passion for filling that gap in the market is crucial to being a successful businessperson.
I would also add that it sounds like you are more interested in buying or investing in a business than in starting one as it usually doesn’t require that much money to start a business unless it’s very capital intensive, and almost by definition most small business aren’t that capital intensive.
Hope this is helpful, even if not providing specifics for actually starting a business (which specifics would be different for the type of business your looking at doing).
My experience:
In 1995 or so I had decided to move to Hawaii and hoped to have a bit of land, but that would be crazy based upon what I thought prices were. I was looking towards retirement.
After many specials Clark announced over the years, I found a very cheap flight from Atlanta to Honolulu and dipped my toes in the waters of the islands. I decided upon the Big Islands Kona side and my agent showed me some properties. I found a macadamia farm and decided to buy it for a very cheap price as it wasn’t being farmed. The right weather, too much land but close to Costco and town. In hindsight I probably should have left it with Macadamia Nuts and been fine, but NOOOOO! I didn’t.
I asked the agent what I should grow. He was a coffee farmer and said he would plant coffee. When asked if I could make money selling coffee, he said “If you have $1 million dollars of coffee in the basement and nobody knows it, then no”.
I did the opposite of what most would do. If I could not market and sell coffee, why build a farm to grow it? I started with the end product and worked backwards.
I bought green coffee and had it roasted and put into bags and went through my large office in Atltanta area. People loved the coffee. I asked who inb their family bought their groceries and they mostly said their wife. I asked the women what color bags I should use and of the many colors I showed them, they said my label looked good on a copper colored bag and that copper stood out to them because it reminded them of copper pots in the kitchen.
I moved and started converting the farm from mac nuts to coffee. By the way, many in the coffee community in Kona were happy to help, many by telling me what I was doing wrong 
For marketing I created business cards with a space on the back for a discount card. That works the same as those ads saying “Tell them JOHNNY sent you”. It cave me a way to find out who was sharing my discounts. When I rode on Delta and passed out a card, it said DELTA on the back, I had a code my my big computer company friends and FLYERTALK the website for frequent fliers looking for help. Personally I didn’t care who passed the code to others because the more they did that the less I paid in customer acquisition cost (which ended up being about $100 a year). I created my own website, had my own domain names and used cheap hosting and those discount codes. I got a cheap tollfree number (Voip) that spelled my business name so I looked larger than the 1 man business I was.
I had a business and a product. I was working initially at a condo unit that did Timeshares. NOTE: Our office could not sell timeshares in the state, so essentially I was front office check in and performed setup for the Monday morning orientation breakfast where vendors talked about their excursions and I served Costco muffins, fruit, watermelon, papaya and… coffee. I brewed and served my own coffee and when people said “Oh I don’t drink coffee” most stopped because it was bitter. I suggested a small sip of mine with no milk, no sugar. Those that tried it often bought some. They got a discount code and one guy was a repeat customer for over 15 years!
At the end of each year I would run the online report and pick perhaps the top 3 or 4 buyers that year. I would them send them some non-coffee items around Christmas time, things such as Santa on a surfboard ornaments, small wooden dishes, key chains, mac nuts and so on. Just something to let them know they were appreciated.
Before you get excited and ask, no I don’t have coffee to sell. Covid hit and then we have had issues where a number of pickers disappeared. MY farm got into disrepair ans at my age (76 next month) I just can’t keep after the 9 acres of work. I am converting to mostly fruit which is much less intensive work and the product will stay and feed people on the island.
I have such a varied background that farming was the last thought when I wanted to move to Hawaii. I had electronic background, construction work like wiring houses, sheet-rocking painting, optical assembly, Ham radio, computer systems manager, software engineer and public service, warehouse worker, disk jockey and the list goes on. Never an expert but enough knowledge to keep me just out of trouble. I was willing and it seems carefree enough to try new things and learn.
When I asked people what they wanted to do in life or when they retire, they would not know. I asked, what is your hobby? Can you make that a career or at least a job. If you don’t enjoy going to work, why are you going to work there?
The most time I ever spent on a job surprised me, it was almost 17 years at the big computer company. Why? I was working 4pm to midnight which meant driving the opposite way of traffic. I could stay up all night watching TV, sleep as late as I wanted. At work it was few calls and no drama.
As others might ask, decide if you want money, relaxation or a time filler. By the way, farming is the time filler Tonight our neighbors on Kauai and Niihau are getting battered and flooded by a hurricane. Such is life.