Richard Russell provides a list of twelve characteristics of the "ideal" business, most of which I've considered intuitively but could not have written and encapsulated as consisely as Mr. Russell has. Cutting out all the valuable explanations in the article:

(1) The ideal business sells the world, rather than a single neighborhood or even a single city or state.

(2) The ideal business offers a product which enjoys an "inelastic" demand.

(3) The ideal business sells a product which cannot be easily substituted or copied.

(4) The ideal business has minimal labor requirements (the fewer personnel, the better).

(5) The ideal business enjoys low overhead.

(6) The ideal business does not require big cash outlays or major investments in equipment.

(7) The ideal business enjoys cash billings.

(8) The ideal business is relatively free of all kinds of government and industry regulations and strictures.

(9) The ideal business is portable or easily moveable.

(10) Here's a crucial one that's often overlooked; the ideal business satisfies your intellectual (and often emotional) needs.

(11) The ideal business leaves you with free time.

(12) Super-important: the ideal business is one in which your income is not limited by your personal output (lawyers and doctors have this problem).

(HT: Sound Mind Investing.)

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