Either way, you need to find adequate answer to the headline question, if you want to make informed decision. Similarly to an indecisive lady, who turned to me the other day. The lady in question is tired of her current job, wants to do something else.
She heard that people make their living on the internet. As she said: "I'm lost"... "I feel myself away from this"... "will I be able to do that?"..."what direction should I start?" and such.
Advice to such people can be given only after doing some analysis, like this:
What interests you?
Example: beeing self-determinated; getting joy in activity; meet challenges; working where you want and when you want; uncovering new demand and producing solutions, etc. Or... you like a cushy but boring job, overbearing boss, crazy co-workers, so-so revenue, etc.ehhh
If you are doing your work with interest, you are able to take the extra step possibly need to achieve better result: like better working schedules, higher revenue, rising through the ranks, etc. And the same principle applies even if you are self-employed.
Research shows that if you are doing an activity that isn't interested in you, the result will be unsatisfactory performance; decrease in self-confidence; tiredness and after a while you give up or burn-out and go for a hospital treating.
You need to wait for that latter situation? I don't think so.
Wat is your passion?
It is important to know what you are passionated about, because you gladly and easily do that activity what is your hobby. Several example:
Writing; golfing; collecting stamp/picture/statue/car/shirt buttons etc.; touring; dating; aviation; website building; ship modeling; cooking; filmmaking; horse dressaging; cucumber cultivating; drawing dog house; gaming Total War Shogun 2, etc.
These are such kind of activities, which can be your fruitful businesses if you develop them. Of course, if your passion is to slapping flies on your feet, I'm fine with that. But, to convert it to your business may be slightly difficult. But I may be wrong.
Why your hobby can be advantageous from business point of view? Because you're familiar with it. You understand the process. You know the society of other people interested in. Therefore, you will be able to see the business in it.
One more argument. You also may be familiar with the market which serves that passion. That is your big advantage over other starters. I know people who try to get as much information as possible - to make sure to beeing smarter or faster or better in their passion. And they pay for that information. Not little.
What frustrates or limits you at present?
Your workplace, or school can cause you frustration oftentimes. Similarly something in your personal life.
For example: facilities or environment aren't harmonious; management's behavoiur make you mad; co-workers hinder you; inappropriate timing; long journey to the work and back; or you yourself as an employee (e.g. by setting goals that won't suit you).
On the other hand you may suffer from frustration, if one of your personal desire is not granted, or some status is blocked in your privacy.
To know what limits you is important, because frustration leads to stress oftentimes. When you know what frustrates you, then you also know which activity is not for you.
Well-known fact: by identifying the sources, you can avoid or reduce the stress. But if left untreated, it can become abnormal.
What do you like to do?
Your experience gained so far may be your help at this point. Remember what kind of creative activity you did earlier. How you liked that? Was you delighted in the results?
Example: photography; gardening; carpet weaving; teaching; car repair; selling; animal healing; skydiving; parenting; computing; repairing sewing machines; etc. Ice cream licking isn't a good answer - it only takes the money and not brings - but making ice cream can be money making activity. LOL
"You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do." - Steve Jobs
Thanks Steve, you put it better than I could have done.
What is your strength at what you're doing?
This could be any: you're good at organizing your activities; you're good at planning; you're precise in implementation; you've good interpersonal skills; you're helpful to others; you've a skill for positioning existing products; you're able to write sales letter; you've a solid content development experience; you've marketing skills; you don't disclaim your responsibility for someone else; you like to learn; you're persistent at what you're doing; etc.
Dealing with this element can not be ignored. You need to know, if you only follow others at present or you are a leading figure. Please, bear in mind that not every business modell fits to every people.
A leading person is able to build his/her business online/offline independently. For example, he/she can be able to build his/her business around an authority website with lots of relevant information.
A follower person also can build successful business, but he/she needs external assistance. Of course, there are people who just requires help mainly at start, but some longer. This person can be build a successful affiliate business, if he/she is attracted to a particular market and want to sell other people's product or service.
Later these starters (when they will be more experinced) can create and sell their own product, and also can be a leading person in their niche.
What you want to improve?
If you have read the above point, you already know what is missing. Those are such things not everyone has or not far enough.
Improviable field can be: developing your planning ability; specifying better cash-flow; developing your pricing system; increasing the value of your product or service; increasing conversion; ameliorating and strengthening your relationship with your prospects/customers; fixing your technical deficiency, etc.
Anyway, the sky isn't falling if you do not have all the strengths at beginning. Nobody is perfect. Starting and operating a successful business is a continuous learning process. On the march you'll realize (in favorable case on your own) what improvement is needed. You just need to take the challenge of learning.
Because there is always some room for improvement. I believe. I also need to develop some things.
Gotten so far? Great! Then you already know, why you need to answer the above questions correctly.
As we know, people aren't alike. There is no "one size fits all" customer demand. Also isn't "one size fits all" solution. You are an individual, with your particular mindset, goal, fun, pain, motivation, life-situation, etc.
You are the only person who knows you. You know the most your ability, skill, strengts and limitations.
Taking into account the above elements, you've a better chance to make an informed decision, in which direction you want to start. And if you have a direction, then you can pick up your best suited niche and plan your business more easily.
I hope, this will be an assistance for wanabe entrepreneurs and a reminder for intermediate business people. That was my goal.