Updated: May 8
I know you. I am you! You're the motivated entrepreneur with a gift to share with the world (or, at least, with those who need what you're offering).
But where to start? There's an indeterminate amount of steps to follow before the simple monetary transaction.
Take the first step.
I love Michael Ventura's quote:
“ There is no finish line. There are only mile markers. ”
There are thousands of steps in a business, and one of the most important steps is figuring out what you want to provide, whether it is a product or a service. From there, every next move is a mile marker to show you how far you've come. Part of owning a business is knowing and accepting that to be great at what you do, the job never finishes.
Let's break it down.
Okay. So you've got an awesome business idea - what's your business plan? Your target market? Competition? Budget?
These are just a few of the questions that you need to have answers to. For a small business to be successful, it must solve a problem, satisfy a need or offer a product / service that the market wants. You need to know exactly what you're offering.
It's time to do the research to invest into the potential of your small business. Here's some tips.
Identify a target market.
The most important part of certifying your business idea is determining who will be buying your product or service. You need to discover who is your ideal customer.
Some factors are age, gender, income, and location. The more that you can narrow down who your ideal customer is, the clearer your product / service will become, and whether it will work.
After that step, you'll need to carry out market analysis (research that establishes how far your market reach is and if there is room to add what you offer). If you want to sell handmade soaps and candles, who else in your area is also selling them? How big is the "area" that you want to target? How similar is their product? What makes you different, and are there enough people who want that point of difference?
One way you can find out if your product will be successful is by conducting a survey (my favourite free survey platform is https://www.google.com/forms/about/). Avoid YES/NO answer options and let your surveyees write down their answer instead. Keep your questions short and simple (don't frighten them away before you've even started!) Examples:
· Do consumers have an appetite for your product?
· Have they heard of what you're offering before? (Subtle way of asking what’s your competitive advantage)
· Which of you potential products can bring you the most revenue?
· What product features do your consumers like best?
These open-ended questions are a great way for people to answer your own questions about whether your product or service is viable.
Learn about what makes your product/service different
During your research, you'll be discovering other businesses that are offering the same or similar products and services to the market. That fact in itself isn't a guarantee that you won't be successful if you launch your business. Unless you’re lucky enough to be the only player in your industry, you still need to identify what makes your products and services stand out from the competition. You can do this by creating a unique selling proposition (USP).
A USP shows consumers what makes your business different, why it stands out from the crowd, and why they should choose you over the competition. Your USP is a very efficient tool to help you define your brand and make people remember your business.
Research the competition
It's not just your consumers who you need to get to know. Because even if you find that people love your product, if there is another company doing what you're doing better and more efficiently, you're not going to get ahead. If other consumers are anything like me, they'll be doing their own market research before purchasing a product/service. What's going to give them the best result for the value?
Conduct competitive analysis. Write down the biggest threats to your business' success and find a way to counteract that threat.
Is this business idea ACTUALLY financially feasible?
A hugely important factor in figuring out whether your business idea will work is financial feasibility. What will it cost to get your business up and running? Where will that capital (initial investment) come from? What are the startup and ongoing business expenses? What is your earning potential once you're up and running? How will you bridge the inevitable financial gap between the startup process and profitability?
I can't stress this enough - for your business to succeed in the long run, you need to carry out financial analysis. It takes time, so prepare to knuckle down and commit to putting in some hours to gather financial data.
When I started out as a small business owner I was working full time. During that time, I put aside 20% of my income and sold any of my assets that weren't doing any good sitting and collecting dust. All of the money I sold from those assets went on business startup costs.
Will accomplishing all these steps for sure help me start up my business?
I'm not going to lie to you, this is all a lot of work, but you will be glad you followed these first steps. If you get to the end and realise that your business idea isn't feasible, you might be disappointed, and THAT'S OKAY! At least you will have avoided wasting time and money on a probable failure, and maybe along the process you will have found another product or service you're interested in offering. And so the process starts again. I have followed these steps uncountable times and been left disappointed, but all those closed doors led me to the very successful business I now operate!
Alternatively, if you've it looks like your small business idea has potential once you've completed your research, CONGRATULATIONS! You now have a head start for your next step - creating your business plan.
Stay excited folks!