It can be helpful to have people who are bright and creative join you for a casual brainstorming session. Start with a simple question like: “What shall we do?” The idea is not to create a business plan, just to generate potential ideas. Many of the ideas will be duds, and there will be quite a few ordinary ones, but a few may emerge that have real potential. Consider your talents, experience, and knowledge when selecting a concept. If you have a particular skill set or talent, consider how these resources can be applied to meeting some sort of market demand. Combining skill and knowledge with a market demand increases your odds of having a successful business idea. For example, you may have worked with electronics as an employee for many years. You may have noticed a demand in your community for a particular form of electrical work, and combining your experience with the market demand can allow you to attract customers.
Always check to see if the name is being used by somebody else before selecting it. Try to create a name that is simple and memorable.
Think of some of the biggest success stories in recent times, such as John Lennon and Paul McCartney; Bill Gates and Paul Allen; Steve Jobs and Steve Wozniak; and Larry Page and Sergey Brin. In every case, the partnership brought out the best in both sides of the equation. Think about the areas that you are either weak in, or have little knowledge of. Finding partners compatible with your personality who can fill in your knowledge or skill gaps is an excellent way to ensure your business has the resources you need to succeed.
Does the other person complement your weaknesses? Or do both of you bring only one set of the same skills to the table? If the latter, be wary as you can have too many people doing the same thing while other things are left unattended. Do you see eye to eye on the big picture? Arguments about the details are a given, and are important for getting things right. But not seeing eye to eye on the big picture, the real purpose of your business, can cause a reaction that may be irreparable. Be sure your team cares about them and buys into the purpose as much as you do. If interviewing people, do some reading on how to spot real talent beyond the certifications, degrees or lack thereof. The area an individual is educated in is not necessarily the area they are most talented in. An interviewee may have a background in accounting for example, but their experience and your assessment of them indicates they may be a better fit helping with marketing.
Who are potential customers? Once you understand who they are and what they want, come up with a marketing strategy. What price are they willing to pay for your product or service? Why would they pay for your product or service over your competitor’s? Who are your competitors? Do a competitive analysis to identify key competitors. Find out who is doing something similar to what you are planning, and how have they been successful. Just as important is to find the failures, and what made their venture fall apart.
How will you create your product? Is it a service that you are offering, or if it’s more complex— software, a physical product like a toy or a toaster — how will it get built? Define the process, from sourcing raw materials to assembly to completion, packaging, warehousing, and shipping. Will you need additional people? Will there be unions involved? All of these things must be taken into account. Who will lead, and who will follow? Define your organization, from the receptionist up to the CEO, and what part each plays in both function and financials. Knowing your organizational structure will better help you plan your operating costs, and fine-tune how much capital you will need to function effectively. Getting feedback. Friends and family make great resources for asking questions and getting feedback––don’t hesitate to use them as your sounding board. Needing to increase the size of your premises. This happens more often than expected. Once the stock starts piling up, you may find it ends up in your living room, bedroom and the garden shed. Think rental of storage premises if needed.
You will want to include the type of marketing you will use. For example, will you use radio ads, social media, promotions, billboards, attend networking events, or all of the above? You will also want to define your marketing message. In other words, what will you say to convince customers to choose your product? Here, you want to focus on your Unique Selling Point (also known as USP). This is the unique advantage your product has to solve your customers problem. For example, you may be lower cost, faster, or higher quality than your peers.
Cover your startup costs. How are you going to finance your business initially? The bank, venture capitalists, angel investors, Small Business Administration (SBA), your own savings: these are all viable options. When you start a business, be realistic. You will probably not roll out of the gate making 100 percent of whatever you project, so you need to have enough ready reserve to fund things until you are really up and running. One of the surest roads to failure is under-capitalization. What price do you intend to sell your product or service for? How much will it cost you to produce? Work out a rough estimate for net profit—factoring in fixed costs like rent, energy, employees, etc.
Needing to tweak the ideas. Perhaps the product needs to be a different color, texture or size. Maybe your services need to be broader, narrower or more detailed. This is the time to attend to anything that crops up during your testing and development phases. You’ll know innately when something needs tweaking to make it better or to make it less like a competitor’s stale offerings.
Do you have investments or savings? If so, consider using a portion to fund your business. You should never invest all your savings into a business due to the risk of failure. In addition, you should never invest money put aside for emergency savings (experts recommend having three to six months of income put aside for this purpose), or money you will need over the next few years for various obligations. Consider a home equity loan. If you have a home, looking to get a home equity loan can be a wise idea, since these loans are typically easily approved (since your home acts as collateral), and interest rates are typically lower. If you have a 401(k) plan through your employer, consider borrowing against the plan. Plans typically allow you to borrow against 50% of your account balance up to a maximum of $50,000. Consider saving ahead as another option. If you have a job, save a portion of your monthly income over time to cover your start-up costs. Visit a bank to inquire about small business loans or lines of credit. When doing this, always visit many providers to ensure you are getting the best rate.
A sole proprietorship, if you will be running (not including employees) this business on your own or with your spouse. A general partnership, if you will be running this business with a partner. A limited partnership, which is composed of a few general partners, who are liable for problems with the business, and a few limited partners, who are only liable for the amount in which they invest in the business. All share profits and losses. A limited liability partnership (LLP), where no partner is liable for another’s negligence.
Alternatively, if your business is more oriented toward the “in person” experience, traditional marketing may be just as important. For example, if you’re starting a landscaping business, focus on getting the word out to neighbors before starting a website When making a website keep in mind that simplicity and clarity are key. A simple design that clearly states what you do, how you do it, and what you charge is most effective. When making your website, remember to emphasize why your business is the best solution to a clients problem.
If you will be advertising in periodicals, they will need copy or images at least two months in advance of publication. If you will be selling in stores, get pre-orders sold, and shelf space allocated. If you will be selling online, get that e-commerce site ready to sell. If you’re offering a service, advertise in appropriate trade and professional journals, newspapers and online.
If you don’t generally need an office beyond your home, but may occasionally need meeting space, there are often places that can address those needs. A quick Google search on “business meeting rentals [your city/state]” will deliver plenty of rental options in your area. Be sure to contact your local municipality about zoning laws. Some types of small businesses cannot be ran out of a home, and it is important to ensure your business is operating within its proper zone.
