Do you have a great business idea?
1-Have a great reason to take the plunge
You’ve had a great idea for a business, which is the main thing. The next step is to make sure that being a business owner is what you really want. If this is your first time running a business, then it’s an exciting, and often nerve-wracking journey that you need to be prepared for.
You’ll have to make some sacrifices, especially in the beginning, so it’s important to sit down with your family and discuss the impact your new venture will have on everybody.
Ask yourself what’s really motivating you to branch out on your own. Is it because you’re not happy in your current job, that you’ve always dreamed of being your own boss, that you’re feeling positive about the success of your new idea, or a combination? It’s important to make sure that you’re taking the plunge for all the right reasons. Having a clear idea of your motivation can impact you further down the track and set you up for success.
2-Write a great business plan
A business plan is the blueprint for your business. It outlines your strategies and crystallizes your ideas. You’ll need it for finance applications, for presenting to potential investors, and as a road map for the growth of your business. It’ll give you a clear sense of direction, as well as providing a benchmark so you can measure your business progress.
You’ll also want to show your business plan to key staff, because it’s important they’re aware of your goals. It’s a way to keep everyone on the same trajectory and working towards the same things.
3-Finding out why people will buy from you
When you’re on the journey to start-up, you need to establish that there’s a market for the type of product or service you plan to sell. There are several ways you can do this, including attending trade shows relevant to your industry (and exhibiting at them), conducting surveys through social media and email, running focus groups, and starting your business part-time. The results from this research will help you create your competitive advantage – that’s what you do better than anyone else, and why people will buy from you and not your competitors.
Consider profiling your ideal customers to gain an accurate analysis of market potential. To focus your marketing more effectively you’ll want to identify:
- If there’s a need for your product or service.
- The characteristics of your ideal customer.
- Ways to research the potential size of your market.
- Trends that could affect your venture.
Consider how you will sell to the market. Look at industry and market trends, and global and local influencers, so you can identify any threats or opportunities ahead.
4-Understanding your market
It’s important to understand the market you’re targeting, including your ideal customer and the size of the market you plan to enter. Gaining a good understanding of your target market and getting to know your potential customers well means you’re better placed to sell to them. You need to find out if your target market is large enough to sustain demand for what you’re selling.
You might find out that it’s not large enough, and that your idea is not worth pursuing. Or you could discover that in fact there’s a high demand for your idea, and that you’ll be able to enter and compete in the marketplace successfully.
5-Lower the risk
Starting out can be pretty scary, especially if it’s the first time you’ve been in business for yourself. Once you understand the particular risks that relate to your business and industry, you will be in a much better space to reduce or remove so they don’t cause any bumps along the way.
Finding out what they are and if they could impact on your start-up is an essential step before you go quitting your current job or investing a lot of money in your new venture – the last thing you want is to find out there are barriers to your even starting.
6-Find out everything you need to know
Ensure you take the time to research the wider marketplace before you start up, to check that your business can be sustainable long-term. Pay particular attention to any economic, social and industrial trends or changes that could impact on your business’s future.
You can find out this information by:
- Reading local and international online news sites.
- Talking to other small business owners and suppliers.
- Subscribing to industry and trade online publications.
- Listening to business and current affairs programs – via podcasts, news feeds, TV or radio.
- Subscribing to news and business updates on your mobile or e-newsletters through your inbox.
The U.S. Small Business Administration (SBA) website is a good resource when determining industry trends.
7-Develop a sound business model
How you intend to get to market is a critical decision to get right. The ‘business model’ revolves around how you will get paid. Will you sell direct, wholesale, or online? Will you charge by the hour, add a margin, charge commission or contract with set quotes?
There are a number of ways to get to your customers, and you will possibly use multiple methods. Some possible channels to market include:
- Selling directly, such as a retailer or a manufacturer with a factory outlet.
- Trading through a wholesaler.
- Selling through a website as an online business
- Employing your own sales force.
- Using sales agents or distributors.
- Licensing your products or services.
- Forming a joint venture – or a strategic marketing alliance with other companies.