Archive for December, 2011
Many people are afraid to start a business due to risk. Well, no one can deny that the statistics doesn’t lie. Only 1 out of 10 businesses will reach its 10 years of operation.
How do you start your business smartly? And how do you decrease the risk?
1) Do Your Due Diligence
The bulk of the task of the entrepreneur begins even before the business begins. Market research is the process of removing the guesswork from the facts.
Although, market research could not give you 100% accuracy, the process will help you assess if your business idea is worth pursuing or not. Your confidence level should be very high before you lay down your cash on the line. After all, the odds of failing is high.
How do you do market research?
You can start with informal research by asking questions with friends or family members.
If you are an existing customer of a competitor, chatting with the business owner and asking subtle probing questions without giving a hint that you are doing a market research is an activity worth pursuing.
You can also do a formal market research by coming up with sets of questionnaires and making a random survey taken from the market segment that your business will serve. The goal of the survey is to uncover customer demands, pricing sensitivity, current customer experiences, possible product innovation, customer wants and desires.
2) Learn as much as you can about the business
You can’t learn a business fully by just reading books or attending seminars in as much as you don’t learn biking or swimming by reading alone.
There is a better way of doing it.
Apply and be employed in one of the similar businesses. It is like being an apprentice and getting paid at the same time.
Do you want to start a pizza outlet?
Apply as crew in one of pizza outlets. Then make your stay purposeful. Get the suppliers addresses in the boxes. Count the foot traffic in the vicinity. Learn how much is the cost of manufacturing the product. Be purposeful and make your working days a thorough educational experience.
Do you have a friend in a similar business at a different location? Ideally, 10 miles from where you plan to start your business is a good number. Ask if he or she can take you as an apprentice.
3) Prudent Capital Spending
One of the top reasons why many businesses fold is lack of cash. The business owner ventured into the business and he or she runs out of capital before the business starts earning.
Learn how to be prudent in your spending.
Instead of buying equipments, you can borrow, rent or buy used equipments. Instead of renting an office, you can operate from your own garage. Don’t buy unnecessary purchases. Keep your operating cost as small as possible without compromising the quality of your products.
Starting a business is a lot like starting a family. Once you take the plunge, you should be reasonably sure of sustaining it for a good period of time. Hence, before taking the plunge, it will be wise to plan a bit. Here are 5 important tips:
1. Do Your Own Research
Before deciding on the business you want to start, do some research. This should include the size of the market you are targeting, types of customers you will have, their tastes, and the extent and kind of competition.
In addition, a good study should also be done about the costs: rent, cost of raw materials, labour, and best location.
It is better that you do not rely on other agencies or friends for this. It is okay for big corporate organisations to hire research firms to do this, but you are not a big corporate.
Do not trust other people’s assessments before sinking your hard earned dollar on the business. Do your own digging, and planning.
2. Prepare a Business Model
A business model is a statement of your plan on how you intend to generate revenues, and how much profit are you aiming for. There are 5 main ingredients of a good business plan.
a) Size of the targeted market in terms of quantity and value
b) Cost of inputs and production
c) Expected revenues or total sales proceeds,
d) Rent, interest on capital, depreciation for furniture/machinery
e) Expected profits at the end of a quarter, or one year.
It is important that you prepare this business model with utmost honesty and accuracy, because the success of your venture will largely depend on the efficacy of your business model. Read the rest of this entry »
If so, we’ve compiled a short list of resources for you to check out. Here are three noteworthy reads for your small business!
1. The Everything Start Your Own Business Book by Judith B. Harrington
Do you want professional, straightforward advice on what it takes to run a business from a successful businesswoman? This is an easy-to-read, step-by-step guide to help you become your own boss by making that great idea of yours into a business success. From online business strategies to competitive concepts, this book will teach you all you need to know to get your business off the ground.
2. Writing and Implementing a Marketing Plan: A Guide for small business Owners by Richard F. Gerson
Are you searching for the best marketing method for your product or service? This guide will help you learn your best target market and develop an effective marketing plan for your business idea. Business owners will be taught how to develop an initial business plan and mission statement, while also learning how to create a marketing plan that will attract new and maintain repeat customers. Gather a complete market analysis, develop a marketing and promotional mix, and implement your marketing plan with your best marketing results at hand.
3. Entrepreneur Magazine’s Ultimate Small Business Advisor: All You Need To Know by Andi Axman
Do you want to be a small business owner but don’t know where to start, how to get moving, or where to go for advice? Here’s a guide on owning and running a small business from one of the editors at Entrepreneur Magazine. This comprehensive guide will help you set up your business along with its marketing, sales, financing, management, and expansion opportunities. The easy-to-understand format makes this a great all around resource for anyone looking for insight and direction on achieving your business goals.
We hope these resources for entrepreneurs help bring you one step closer to reaching your business goals! Checkout our free small business resources for more startup information, or start your marketing efforts by adding your small business to our free local business directory listing!