Steps to Starting a Business
Businesses are built on ideas but ideas don’t build businesses. To determine if your business idea is the next big thing, start by doing research.
Define your business idea
Determine what you want to sell by asking the following questions:
- Does your product have features that make it easier to use?
- Is it more attractive or longer lasting?
- Do you offer a service that is hard to find?
- Will your product or service fill a niche?
- Are you an expert in your field?
- Can you offer your product at a lower price than competitors?
- Can you offer a higher level of customer service than competitors?
The answers to these questions will help you determine whether you have a product or service that can compete in the marketplace.
Know you industry
It is essential to understand the industry your product will compete in. If your product or service is in demand, the market has few competitors, and start-up costs are low, the market is has low barriers to entry. If the market for your product or service has high barriers to entry, meaning it is already crowded with well-entrenched business providers or start-up costs are high, you will need more resources to enter the market.
- Search the internet for the product or service you hope to sell to find businesses selling similar products.
- Visit competitor websites to learn how each company operates and markets its products.
- Check out the business section of newspapers and trade journals to learn the latest business moves your competitors are making.
Look for trends that would impact your business on news sites, blogs, review pages, and social/business networking sites. Review positive and negative feedback. Engage in conversation with others involved in the industry you are researching. Ask questions to gauge where experts feel the industry is moving.
Online and traditional publications also offer a wealth of trend information. Read daily news updates, newsletters and trade magazines to spot trends.
Learn the business
A key to success in an industry is understanding how the day-to-day operations of the business works. If you are an industry insider you have a head start. You may already have a good understanding of the business landscape in which you will be operating. You may even have developed relationships that you can capitalize on when you leave the company to go out on your own.
If you are not currently employed in a business similar to the one you hope to manage, your interest in starting a business in the industry means you are likely to have an idea of how the business functions. In either case, it is valuable to stay current about issues that affect the industry and learn what tactics businesses take to address the issues.
To learn more about how businesses similar to the one you hope to start function, attend industry conferences and trade shows, join trade groups, and talk with others. You will not only learn what business tools and processes are common in the industry, you will gain valuable contacts.
When doing your research, pay attention to lifestyle changes that may impact your product. If you have invented a new lawn chemical, but the trend is toward greener lawn care, the timing may not be right for your business. Knowing where a market is heading makes it easier to determine if and when to enter the market
Running a business is a challenge. It can bring joy and prosperity but also lead to stress and financial strain. Before you jump in, take a step back. You’ve assessed your competitors and the industry and learned the business—now assess yourself. Ask yourself three questions and answer them honestly.
- Do you have the education and certifications necessary to operate the business?
- Do you have the skills to perform the business responsibilities?
- Do you have the personal qualities that will make you a successful business owner?
Business owners benefit by being motivated, flexible, and confident in their abilities.