Well, now you've done it! You've decided to start your own business. You've finally committed to becoming an entrepreneur and you've fleshed out your business idea. You are ready and rearing to go. But, I want you to take a minute, and ask yourself have you taken all the steps to become successful. Having the gusto and passion for your business is great! But, you also need to do some due diligence and homework before you get this show on the road.
There are some key tasks that you need to complete as you are starting your new enterprise, in addition to or as you complete your business plan. Regardless of whether you are starting a medical practice, law firm, coaching practice, or consulting firm, you must complete some basic fundamental business steps to ensure success. It doesn't matter what state or country you are in, whether you've organized as a corporation, LLC, partnership or sole-proprietorship, you must do at least these 15 things.
One of the major tasks you need to perform is determining what opportunities are available for the business idea you've come up with. Does your idea have the makings of a sustainable business model? What does the market for your business look like? Who is your audience? Where are they, what do they want, what do they need? These next steps will help you answer those questions.
Finding The Right Opportunities
Conduct Market Research
What specific business should you go into? What is your niche? It is not always easy to tell. If the prospects are obvious, a lot of people would have taken advantage of the opportunity already. And if they have, what do you offer that's different and unique, yet profitable? How do you find the right opportunities? Sometimes, opportunities do not just present themselves. In some instances, you may have to go looking for them. This is what market research is made for.
Market research does not have to be difficult. There are several free sources that can provide you the information you need. Your local or county government has data on your local business environment. There are other agencies, such as the Chamber of Commerce and the Small Business Administration that can provide you with valuable business intelligence. Your local library, colleges and universities can also be a great resource. Other business owners, the Internet, and social media outlets can provide you insights into what to expect as a business owner, support as an entrepreneur, and allow you to easedrop on the concerns of your market so you can address their issues.
(And if you want to find out how to conduct your market research for free, just click here!)
Run A Survey
Do you want to know what services/products the people in your area are willing and available to buy? Well, why not ask them directly? This is the power of focus groups and surveys. Traditionally, all you had to do is hand out a small sheet of questions in the form of a questionnaire to willing people. But this classic way is more difficult and less efficient in the age of the Internet. The easier way is to use available online services to run and analyze your survey. Yes, you can make use of the internet to run surveys. Facebook, for example, can be used to run polls and hold surveys in questionnaire form. Survey Monkey is a great tool. They offer both free and paid services. Quizzes are also a great way to get customer insights, test ideas, generate leads, and get a sense of where your audience is on their journey.
If you still have questions on how to conduct market research and validate your results, you can sign up for my on-demand course, "Conducting Effective Market Research," today.
Look For Products/Services That Are In Demand
Products and services that will surely sell are those that are in demand. Demand refers to the need for your product or service in the market. For example, cold food and drink products may be in demand in hot places especially during summer months. Also, branded clothes may be in demand in wealthy places where people are obviously fashion conscious; school supplies are surely in demand during school year openings.
Take Advantage of Untapped Markets
Sometimes, the demand is there but the supply is not. This means that the people in your demographic are are in need of something but there are no or very few suppliers of that "something". For instance, in large metropolitan areas you tend to find large immigrant populations. They come to the area with their own cultures. Often, they cannot find goods that are familiar to them from their home country. As a result, enterprising individuals create successful businesses to meet the needs of others in their population who long for pieces of home. Another example, many people in one city are fashion conscious and are willing to pay premium for clothes, but there are no sellers of branded and signature clothes in the area. This situation poses a clear opportunity that you can take advantage of.
Study The Culture in the Place
Opportunities may be unique from one place to another. One of the factors is the differences in culture. The unique culture of a place influences the business opportunities present there. As referenced above, culture often dictates the market for specific products and services. There is always a demand for doctors, but some doctors will be in higher demand in some areas versus other areas. Silicon Valley has a higher demand (and therefore concentration) of IT professionals than Bangor, Maine.
Once, you've considered the environment for your idea and determined that it is viable based on your market you need to identify prospects for you to sell your product or service to. You need to ensure that your market is not only looking for what your business will offer, but that they will pay for it, too.
This is something you will learn once you conduct your market research and start to observe and engage your audience.
Identifying Business Prospects That Will Sell
Identify the Purchasing Power of the People
It is not always about interest. People may be interested in a certain product and/or service but they may not have the purchasing power to pay for it. So when coming with a business idea, you have to consider the purchasing power of the people in the area. You want to consider the purchasing power of the majority and not the select and privileged few. For example, it may not be feasible to sell signature brands such as Fendi, Louis Vuitton, and Chanel in third world countries where the purchasing power of the majority is relatively low.
Analyze the Buying Behavior of the People
At other times, it is not about purchasing power. People develop buying behaviors and this will be something that you will have to analyze as well. To demonstrate, it may be customary in some cultures for people not to spend so much on material indulgences (new car, new house, new phone, etc.) but they are willing to spend on luxury food. You need to analyze unique buying behaviors such as this to assess the feasibility of your prospect business.
Analyze the Behavior of the People Towards Brand Names
In some places, people may have the purchasing power to buy branded and signature brand products but are unwilling to spend on them. There are some cultures where it is customary, even for the wealthy, to shop in stores that sell secondhand products. On the other hand, there are other cultures where people are strictly brand conscious and will hardly spend on anything other than branded and signature products.
Look For Markets That Have High Demand And Low Supply
Where there is high demand but low supply, there is a business opportunity. Consider that in one place the demand for school supplies is high. But because of the remoteness of the locale, the supply is very low. If you manage to find ways to bring school supplies to that place, that is capitalizing on an opportunity where the supply is low and the demand is high.
Grab Opportunities As Soon As Possible
If you are really serious about grabbing an opportunity, it is advisable that you do so right away (after conducting thorough market research). You want to avoid others grabbing the opportunities that you saw before you have a chance to profit from them.
(To make this easier, you should check out my Target Audience workbook.)
Identifying The Risks And Countering Them
Do Research On What Problems Similar Businesses Faced
No matter how unique your business idea is, it is highly likely that another entrepreneur in another place already tried the same business venture. You can observe the difficulties that they faced. You can also take a look at your future competitors. Observe what problems they are facing and how they are coping. This will give you an idea on how to overcome risks, pitfalls, difficulties, and hardships related to your planned business venture.
Think of Possible Reasons For Your Business To Fail
This requires some wild but realistic imagination. Think of possible reasons, possible events, and possible circumstances which might cause your business to suffer or fail. If you are opening a shipping company, for example, possible risks may include the following: fluctuations in gasoline prices, frequency of natural calamities in the area that might affect shipping, scarcity of competent delivery truck drivers, dishonesty amongst employees, and other similar reasons.
Formulate Possible Solutions and/or Preventive Measures To Possible Risks
Enumerating possible difficulties that you might face is only the first step. Next, you have to think of ways to counter them should any of them happen. You need to be ready for all the possible situations. This is part of the so-called ‘risk management’ which many companies invest a lot of effort into.
Get a Business Advisor
It might not be necessary in all cases, even though it is highly recommended. Smaller businesses, for instance, may have no need of retaining one other than at crucial steps in the business. But for bigger businesses that deal with complex markets and industries (investment/loan business, real estate business, foreign trading business, etc.), you mostly likely need an advisor (and probably got to the level of business you did with competence advising)– someone who is knowledgeable in the field. This is especially necessary if there are some things in your chosen field of business that you are not very familiar with. Be ready for several advisors, if necessary. In some instances, it will help to have opinions from several individuals. Note: Business advisors are not necessarily the same as business coaches, mentors, or consultants.
Assume That Possible Risks Are Real
You have to progress with the mindset that your assumed risks and dangers are real. Some businesses fail at this and they begin to lax. If you do this, it is as though you are underestimating the risks involved. If you underestimate the risks, they might hit you hard when you least expect it and when you are least ready. Believe it or not, this can actually cause businesses to fail completely.
This list is a starting point for your determining whether your new business idea is not only viable but also profitable. You should take these steps very seriously. You also must keep an open-mind and accept whatever you learn, even if the conclusions do not support your present thoughts. Let me know if you have any questions or comments on this in the comments below. You should also subscribe to my weekly business email series for more in-depth information.
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