Aligned with your interests and lifestyle
Make sure you’ll enjoy running the business. In my experience, any business becomes more interesting if you built it yourself. Still, make sure the product / service is something that you are proud of, and can stay excited about for a long time to come. Building the next baby food company may sound exciting when your child is in diapers, but will you still want to spend all your time thinking about babies when your kids are in high school?
Also, think about the types of people you’ll interact with while running the business, including your employees and customers. Take the example of my consulting firm. I love working with entrepreneurs because they have great energy. I love to think about startups because I get to hear and think about new ideas all the time. I like to focus on business plans because it lets me develop expertise I can share with others. And I like having fellow consultants as my employees and partners, because I can relate to them.
When evaluating a startup idea, think carefully about the kind of lifestyle you prefer. I looked into an idea for a mall-based toy retail concept a few years ago. I passed on it for many reasons, one being that I didn’t live near a mall, so I’d have a long commute each day. Also, I would have to mind the store on weekends and holidays, when I’d rather be with my family. I’d rather work long hours during the week.