Know you want to work for yourself but aren’t sure where to start? This is the first post in a two part series on concrete steps you can take to make your entrepreneurial dreams a reality.
Sitting down with a pen and paper – either by yourself or with a creative group of friends or colleagues – is a terrific way to generate a working list of potential new business ideas. Steven Gold, author of Entrepreneur’s Notebook, advocates the following five-step brainstorming process:
- Develop a set of initial criteria by listing specific resources, expertise, limitations, and goals.
- Pick a starting point – an industry, interest, or problem you want to solve. Create a list of ideas associated with that starting point, and then evaluate it according to your criteria, eliminating some ideas and focusing on others.
- Using your short list, write down as many problems associated with each item as you can think of. Rate the problems and create a new, prioritized list.
- Generate a list of solutions.
- Based on these solutions to the problems, come up with a list of potential business opportunities.
Note that good ideas will be ones that you are passionate about and motivated by, but not necessarily 100 percent original. In fact, some of the most successful new businesses take an already-established concept and make improvements to it, or simply target a new audience.
Write Yourself a Reality Check
Many of us have fun business ideas that we enjoy sharing with friends over cocktails, but before you start pouring money and resources into yours, take the time to consider if the idea is truly viable. You will no doubt have eliminated some unrealistic propositions as part of the brainstorming process, but you should also perform a more in-depth cash-flow analysis to determine the exact resources that will be required. If, for instance, you find that your idea will cost millions of dollars, will involve something illegal, or will require a level of expertise that you can’t easily obtain, then you probably want to go back to the brainstorming phase.
Test Your Concept
The next step is to tap the market to see if customers will buy what you’re selling. Speak informally to key decision makers, read industry reports and publications, run focus groups, and sweep the Internet for news about potential competitors. The bottom line, says Gold, is to confirm with some degree of certainty that your proposed new venture can deliver the goods, effectively compete for new customers, and make a profit. You will need to design your product or service in a way that sets your business apart from the competition while also keeping costs under control.
Before you begin, make sure someone else hasn’t thought of your idea already. Hit the Internet and look for products similar to yours in indexes such as the Thomas Register and the Harris Directory. Also, take a look at the companies that manufacture these products to see if your offering could compete effectively with theirs. Your next step is to check out the United States Patent Trademark Office’s online database to find related patents that were recently filed. If your research proves that your idea is unique, follow the process for obtaining a patent. When this is complete, you’ll need to choose how you’re going to sell your product. Your primary two options are licensing –getting an established manufacturer to buy your invention and pay you a royalty on those sales – and venturing – starting a business to manufacture and sell the product yourself.
Might your career change involve owning a high-end children’s clothing boutique or the Subway restaurant down the block? An early decision will involve whether to start your business from the ground up, buy an existing operation, or purchase a franchise license. Of the three options, starting from scratch is probably the most difficult, for an established business brings a built-in location, inventory, and a customer base, and a franchise license offers national name recognition and recognizable branding, pre-determined costs, and a set management model. However, with existing businesses and franchises, you’ll have to give up decision making power and the freedom to shape the operation just so.
Regardless of whether you own a new or existing business, your retail operation should have a location that is relatively secure and accessible by public transportation. Before you finalize the arrangements for your new space, obtain your business and resale licenses, a small business credit card, and insurance. If securing product inventory is on your agenda, research local and online wholesalers and manufacturers who carry the items you’re interested in, and find out where and when you can attend trade shows and markets.
Employ An Online Only Model
eBay is only the beginning. Online businesses are increasing in popularity as they provide ways to generate revenue beyond the sale of your products or services (for example, you can sell advertising space or recommend affiliate products on your site). Here are a few tips if an online store is in your entrepreneurial future. First, pick a name for your business that’s easy to spell and type into a web browser, create a site that’s easy to navigate and search, and, if you’re conducting financial transactions online, provide simple check-out, accept credit cards, and make it easy to find and contact live customer service.
If you don’t have substantial web design and programming expertise, your best bet is to go with a professional host like eBay ProStores or Yahoo! Merchant Solutions. These all-in-one solutions provide a mix of site-building tools, product catalog tools, shopping-cart technology, payment processing, shipping and inventory management, accounting tools, tracking and reporting capabilities, and domain registration. Just make sure you test your site repeatedly before opening up for business, as you’ll want to be certain that you can handle heavy customer traffic and all types of transactions.