The benefits of setting up a business in an area you have direct involvement or experience in

Setting up a new business is hard. There is no other way to describe it. The number of challenges when you first start can seem never-ending. There is also an enormous amount to learn, not only about the area you are operating in and your competition but the general day-to-day aspect of running a business. 

With this in mind, it’s not a surprise that many people choose to set up a business in an area they have involvement or experience in. However, there are still those who decide to start up in an unfamiliar area. We should say that while it can be harder to build a successful business this way, it is not impossible.

setting up a new business in area with experience

By setting up a business in a sector you already have knowledge of and are passionate about, you’re at a distinct advantage for many reasons. For those of you who may be considering setting up a business in the near future, hopefully the benefits highlighted below can show you how helpful it can be to have experience or some direct involvement in an industry before starting up on your own.


With how crowded so many sectors have become, it is relatively unusual to find a business that has no direct competitors. In fact, for many businesses starting up, they are entering highly competitive sectors already. However, with experience in an area, potentially from working for or dealing with these competitors previously, this can actually be a benefit when starting up a new business. You will understand how these businesses work, where they perform well and where they don’t. With that being said, you should always be ethical when using information you have learned from your experiences with other businesses.

Areas for improvement

First-hand experience in a business sector can allow new businesses to identify areas of improvement that may not be clearly visible to those already in a business. With so many other things to focus on, it can be hard to ‘see the wood for the trees.’

However, this first-hand experience does not have to come from working in an industry. It can be clear to people who regularly interact with products or an industry where they could make improvements. For example, Joyto was set up by husband-and-wife team Steve and Samantha Mccarthy. They provide high-quality baby products using environmentally friendly materials. From her own experiences, Samantha explained that she became “really engrossed in baby products” before her daughter was born. Since then, by doing “so much research on baby products,” Samantha “found there are still more business opportunities in the UK market.” This is a prime example of someone using their own experience with a product they use to identify areas for improvement.


Setting up a new business in area white room

Business contacts are a vital part of building a successful business, and when you have been involved in an industry before, the chances are you will have built relationships that can be helpful. This could be suppliers or staff members that you could look to work with in the future. For this reason, it’s always important to build positive business relationships during your career as you never know when they might be helpful and could really benefit your business.

Any advantages you have can make setting up a business easier. The areas highlighted above show where you can find benefits through previous experience and how you can put them to use and hopefully help your business succeed. Nobody is saying you should only start a business in an area that you have prior experience in. However, there are clear benefits to doing this, and it could make that initial period of setting up your business easier than if you set up in an area you had less knowledge and experience in.