You’ve decided to go into business for yourself. Congratulations. Now what? There are dozens upon dozens upon hundreds of websites that will tell you how to go into business. Many are advertising sites that lure you into trying their particular method. Most are targeted toward already successful businesses looking for ways to hone areas of specific need, like marketing, website development, human resource development and advertising.
As a start-up, your best and most affordable help (free) are sites like the Small Business Administration website where you can find tried and true processes for just about every concern related to developing your business idea into a successful enterprise, and Inc, a site full of informative, well-researched articles about managing and building a business.
Where does business development start? You would think the answer to that question is to have a great idea. True, but it also must be a workable idea, one that serves a need not adequately met in the existing marketplace. Starting a business is more of a challenge in small towns located close to large metropolitan areas. That doesn’t prevent a creative thinker in a small market from being successful. Going back to the question of “where does business development start,” it begins with planning.
Let’s say that an in-depth study of buying habits of people who live in your zip code shows all their pet supply purchases are at pet shops in a large city sixty miles away. That might lead you to think opening a pet supply store in your small town is a great business idea. Before you forge ahead, remember this, not all pet supplies are purchased at pet stores. Most are purchased at grocery stores, feed and supply stores, and through animal care clinics. The pet supply niche may be filled locally through those outlets. The first step in business development is knowing your idea has legs and will stand up under considerable questioning.
Why am I starting a business? The answer should be more than, “I want to make money,” or “I want to be my own boss.” What need will this business serve that isn’t being met? And by the way, being in business for yourself does not mean you are your own boss. You become the employee of your new enterprise and your time will be dictated by many factors beyond your control. As a responsible owner/employee you will put in far more hours than when you worked for someone else.
Who is my ideal customer? In the example of the pet supply store, it’s more than, “people with pets.” What is the demographic you are looking for? People to whom pets are family? Affluent customers who can afford more upscale purchases for Miss Kitty or Mr. Ambrose the Beagle? If your biggest expected sales are pet food, rethink opening a pet supply business. Buyers can purchase pet food just about anywhere, including online.
How is my business idea, product or service different from what’s already out there? The answer to this question will be weighed in the balance of what you provide, the marketplace you are part of, and the economy. There is every reason to expect restaurants will survive in a time when more and more people are eating out. Such is not the case. Restaurants have a high fail rate. Oddly, competition is not the biggest reason cafés and other types of eateries fail. It stems largely from a failure to plan and fully understand the complexities of owning and running a food establishment. Those that succeed have these factors in common: a commitment to excellence in food and service, finding a niche and sticking with it, and providing a pleasant and welcoming ambiance. The same philosophy applied to any business sets the stage for success.
Location, location, location. Where you establish your business is right up there with knowing your marketplace. Being in a mall environment does not guarantee success. Being in a supportive business block or neighborhood with high traffic and the assurance of referrals ranks with great customer service.
Can I afford to go into business? All businesses require start-up costs. Even if you’re opening a one-person plumbing business, starting a landscaping service or providing auto repair, your qualifications as a top-notch service provider are worthless without tools and a base of operations, both of which cost money. Consider carefully your source of business funding and your ability to remain solvent for the first three years without repeatedly taking loans to sustain operations. You can’t borrow your way out of debt.
Profitability. When can you expect to start making money? This will vary based on factors such as maintaining inventory, rent/mortgage costs, overhead for employees and benefits, and unknown factors like illness or economic downturn. Profit is anything over and above expenses, including paying the owner.
• How many employees will you need;
• Sources of inventory or supplies;
• Product/service pricing;
• Legal structure;
• Taxes, insurance, liability;
• Over all management philosophy;
• Marketing strategy.
You cannot eliminate all the risks associated with starting a small business. You can improve your chances of success with good planning and insight. This article is drawn from multiple sources, including the SBA website and Inc.com. It is intended to give entrepreneurs food for thought.
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