Starting a Small Business - Twelve Questions to Consider
Here are twelve questions that you should consider when starting a new business.
1. What is your product or service idea? Are you making a product or delivering a service? What is the need in the market that you will serve? This is the "what". If you can define the specific product or service you want to deliver in a paragraph or two, it will help you to focus on the "how". Try not to be too general. Instead of "Photography" consider refining it to "In-home baby, child and family photography" or some other more specific area. You can always broaden it later.
2. What geographic area will you serve? If you intend to run a mail-order business, you may not have geographic limitations. However, if you have a product or service that is locally deliverable, such as a store, restaurant or in-home service, a pin on the map will define where your business will exist, but from what demographic areas will you draw your customers? Will these demographics change during the week or year? If you have a business where you travel to your customers, consider making a map to clarify your served area. Draw a shape to enclose the area where you want your primary market to be, from which you expect to get most of your business. Make another larger one which would be areas you would consider servicing but in which you would incur higher costs or longer times to deliver your product or service. And then define the third area, in which you may consider delivering services for a higher price or other consideration.
3. What is your competition? Do some research. The phone book, internet, chambers of commerce and personal contacts are all good sources of information. Try to identify each of your competitors' strengths and weaknesses, and think of ways you can operate your business that will overcome their strengths and will take advantage of their weaknesses.
4. What skills are needed to operate this business? Think beyond the actual craft or product. You'll need marketing, selling, customer service, accounting and bill paying, web and computer skills and more. beside these tasks and skills, note which things you do well and don't do well. Be honest, and think about a plan that will either improve your skills, or will bring into your business someone who can coach your or will do these things for you.
5. What equipment or resources do you need? Again, thinking in terms of three levels is helpful. First level, what do you need to barely operate the business out of your home or a small space? You may have most of all of these things now. You don't want to go into large debt just starting your business, so keep this level "bare bones". Next level, what would you need to establish a firm base for growth? That may be better equipment, a better place, or more machinery. You can take this list and make it your "grow as you go" list - as your sales come in, you can divert those early profits to growing your business to the second level without incurring additional debt. Third level, think about if your business was making $1 million per year, or per month. What would that business look like? That distant view may help you lay a stronger foundation in the first two levels to support growth.
6. How will you enter the market space? Few businesses succeed without an initial push. Do you have friends, relatives or local businesses upon whom you can count to give you some business and exposure? How about a press release and grand opening celebration? TV coverage is good, as are reviews in the paper and online. You may want to think about some initial marketing and advertising strategies to get your word out there. Also think about the best time of year to start, where your investment is most likely to generate sales and awareness.
7. How will you define and market your brand? Every business has a brand identity. People will associate your brand in different ways. Are you tailoring your product or service to a value market or upscale crowd? Will your customers come from retail, commercial, government or industrial areas? Naming your business and products will impact how people perceive your business. Would you rather buy from "Joe's Cheesecake" or "The Cheesecake Wonderland?" Describing your lower cost offerings as "value-oriented" instead of "bargain" creates a completely different customer impression.
8. What processes to you need to define and standardize? Regardless of what you do, customers will expect you to do it the same all the time. Consistency or the lack of it will very much impact how much repeat business you receive. Some key processes are customer contacts (phone answering, greeting), delivering the product, cleaning or preparing your business, soliciting and accepting customer feedback, pricing and specials, just to name a few.
9. What are your compliance obligations? Do you need to collect sales tax? If so, how much and in what areas? How often do you need to report tax and income? Do you have licensing and permitting to deliver your product or service? Do you have medical or board of health compliance requirements? Do you have to notify customers of any potential risks? Are you required to have specific insurance coverage or law enforcement clearances? Sometimes, a conversation with a similar business owner in a non-competing market will open your eyes to compliance issues that you did not originally know. You may also want to talk about how to structure your business: Sole proprietorship, partnership (lots of risk), Limited Liability Corporation (LLC) or other structure. If you run a business from your home, there are tax, permitting and zoning implications.
10. What pricing and policies do you want? Pricing will of course affect your profitability. Make sure you can clear a profit after all of your costs are covered. As a new business, you probably don't want to be the highest or lowest price in your served area. Set prices too high and you may not get any business. Price too low and you risk being ignored by all but the most value-conscious customers, and being branded as "cheap". Your policies will influence your customers' experiences. Will you refund money? How do you handle scheduling, deposits and cancellations? Will you accept credit cards or bill the customer? How will you deal with past due accounts? Will you offer discounts, and if so, to whom? Will you have employees? What policies do you need to define for them?
11. How will you fulfill the customers' needs? Imagine the moment you deliver your product or service to the customer. How will they receive it? Will there be packaging or presentation technique that must be followed? If you deliver a service, how will your appearance, professionalism and quality of work be observed? Where will you obtain your supplies or services? Can you get samples and make contacts at trade shows or other venues to develop your supply chain?
12. How will you measure your success? Sales and profitability are just two measurements of success. How about customer satisfaction? Will you perform formal or informal surveys? Will it be obvious to you if your customers are happy or not? What is their rate of referring you to their friends and associates? If you don't know how your business is doing from the outside, you can't fix it from the inside.
Don't let these questions intimidate you. Instead, use them to build a more complete business plan, expose your weaknesses and highlight your strengths.
To continue your business journey, consider joining a chamber of commerce, industry group or web forum where other like-minded business people can offer support and feedback. Good luck with your business!
John Huegel is a photographer in the Erie, Pennsylvania area who specializes in Seniors, Dance Studio, Families and other groups. He is active in many charitable and volunteer activities in the Erie area. His work can be seen at http://jhphotomusic.com
Article Source: http://EzineArticles.com/?expert=John_Huegel
1. What is your product or service idea? Are you making a product or delivering a service? What is the need in the market that you will serve? This is the "what". If you can define the specific product or service you want to deliver in a paragraph or two, it will help you to focus on the "how". Try not to be too general. Instead of "Photography" consider refining it to "In-home baby, child and family photography" or some other more specific area. You can always broaden it later.
2. What geographic area will you serve? If you intend to run a mail-order business, you may not have geographic limitations. However, if you have a product or service that is locally deliverable, such as a store, restaurant or in-home service, a pin on the map will define where your business will exist, but from what demographic areas will you draw your customers? Will these demographics change during the week or year? If you have a business where you travel to your customers, consider making a map to clarify your served area. Draw a shape to enclose the area where you want your primary market to be, from which you expect to get most of your business. Make another larger one which would be areas you would consider servicing but in which you would incur higher costs or longer times to deliver your product or service. And then define the third area, in which you may consider delivering services for a higher price or other consideration.
3. What is your competition? Do some research. The phone book, internet, chambers of commerce and personal contacts are all good sources of information. Try to identify each of your competitors' strengths and weaknesses, and think of ways you can operate your business that will overcome their strengths and will take advantage of their weaknesses.
4. What skills are needed to operate this business? Think beyond the actual craft or product. You'll need marketing, selling, customer service, accounting and bill paying, web and computer skills and more. beside these tasks and skills, note which things you do well and don't do well. Be honest, and think about a plan that will either improve your skills, or will bring into your business someone who can coach your or will do these things for you.
5. What equipment or resources do you need? Again, thinking in terms of three levels is helpful. First level, what do you need to barely operate the business out of your home or a small space? You may have most of all of these things now. You don't want to go into large debt just starting your business, so keep this level "bare bones". Next level, what would you need to establish a firm base for growth? That may be better equipment, a better place, or more machinery. You can take this list and make it your "grow as you go" list - as your sales come in, you can divert those early profits to growing your business to the second level without incurring additional debt. Third level, think about if your business was making $1 million per year, or per month. What would that business look like? That distant view may help you lay a stronger foundation in the first two levels to support growth.
6. How will you enter the market space? Few businesses succeed without an initial push. Do you have friends, relatives or local businesses upon whom you can count to give you some business and exposure? How about a press release and grand opening celebration? TV coverage is good, as are reviews in the paper and online. You may want to think about some initial marketing and advertising strategies to get your word out there. Also think about the best time of year to start, where your investment is most likely to generate sales and awareness.
7. How will you define and market your brand? Every business has a brand identity. People will associate your brand in different ways. Are you tailoring your product or service to a value market or upscale crowd? Will your customers come from retail, commercial, government or industrial areas? Naming your business and products will impact how people perceive your business. Would you rather buy from "Joe's Cheesecake" or "The Cheesecake Wonderland?" Describing your lower cost offerings as "value-oriented" instead of "bargain" creates a completely different customer impression.
8. What processes to you need to define and standardize? Regardless of what you do, customers will expect you to do it the same all the time. Consistency or the lack of it will very much impact how much repeat business you receive. Some key processes are customer contacts (phone answering, greeting), delivering the product, cleaning or preparing your business, soliciting and accepting customer feedback, pricing and specials, just to name a few.
9. What are your compliance obligations? Do you need to collect sales tax? If so, how much and in what areas? How often do you need to report tax and income? Do you have licensing and permitting to deliver your product or service? Do you have medical or board of health compliance requirements? Do you have to notify customers of any potential risks? Are you required to have specific insurance coverage or law enforcement clearances? Sometimes, a conversation with a similar business owner in a non-competing market will open your eyes to compliance issues that you did not originally know. You may also want to talk about how to structure your business: Sole proprietorship, partnership (lots of risk), Limited Liability Corporation (LLC) or other structure. If you run a business from your home, there are tax, permitting and zoning implications.
10. What pricing and policies do you want? Pricing will of course affect your profitability. Make sure you can clear a profit after all of your costs are covered. As a new business, you probably don't want to be the highest or lowest price in your served area. Set prices too high and you may not get any business. Price too low and you risk being ignored by all but the most value-conscious customers, and being branded as "cheap". Your policies will influence your customers' experiences. Will you refund money? How do you handle scheduling, deposits and cancellations? Will you accept credit cards or bill the customer? How will you deal with past due accounts? Will you offer discounts, and if so, to whom? Will you have employees? What policies do you need to define for them?
11. How will you fulfill the customers' needs? Imagine the moment you deliver your product or service to the customer. How will they receive it? Will there be packaging or presentation technique that must be followed? If you deliver a service, how will your appearance, professionalism and quality of work be observed? Where will you obtain your supplies or services? Can you get samples and make contacts at trade shows or other venues to develop your supply chain?
12. How will you measure your success? Sales and profitability are just two measurements of success. How about customer satisfaction? Will you perform formal or informal surveys? Will it be obvious to you if your customers are happy or not? What is their rate of referring you to their friends and associates? If you don't know how your business is doing from the outside, you can't fix it from the inside.
Don't let these questions intimidate you. Instead, use them to build a more complete business plan, expose your weaknesses and highlight your strengths.
To continue your business journey, consider joining a chamber of commerce, industry group or web forum where other like-minded business people can offer support and feedback. Good luck with your business!
John Huegel is a photographer in the Erie, Pennsylvania area who specializes in Seniors, Dance Studio, Families and other groups. He is active in many charitable and volunteer activities in the Erie area. His work can be seen at http://jhphotomusic.com
Article Source: http://EzineArticles.com/?expert=John_Huegel
Labels: Starting a Small Business, Twelve Questions to Consider
Here are twelve questions that you should consider when starting a new business.
1. What is your product or service idea? Are you making a product or delivering a service? What is the need in the market that you will serve? This is the "what". If you can define the specific product or service you want to deliver in a paragraph or two, it will help you to focus on the "how". Try not to be too general. Instead of "Photography" consider refining it to "In-home baby, child and family photography" or some other more specific area. You can always broaden it later.
2. What geographic area will you serve? If you intend to run a mail-order business, you may not have geographic limitations. However, if you have a product or service that is locally deliverable, such as a store, restaurant or in-home service, a pin on the map will define where your business will exist, but from what demographic areas will you draw your customers? Will these demographics change during the week or year? If you have a business where you travel to your customers, consider making a map to clarify your served area. Draw a shape to enclose the area where you want your primary market to be, from which you expect to get most of your business. Make another larger one which would be areas you would consider servicing but in which you would incur higher costs or longer times to deliver your product or service. And then define the third area, in which you may consider delivering services for a higher price or other consideration.
3. What is your competition? Do some research. The phone book, internet, chambers of commerce and personal contacts are all good sources of information. Try to identify each of your competitors' strengths and weaknesses, and think of ways you can operate your business that will overcome their strengths and will take advantage of their weaknesses.
4. What skills are needed to operate this business? Think beyond the actual craft or product. You'll need marketing, selling, customer service, accounting and bill paying, web and computer skills and more. beside these tasks and skills, note which things you do well and don't do well. Be honest, and think about a plan that will either improve your skills, or will bring into your business someone who can coach your or will do these things for you.
5. What equipment or resources do you need? Again, thinking in terms of three levels is helpful. First level, what do you need to barely operate the business out of your home or a small space? You may have most of all of these things now. You don't want to go into large debt just starting your business, so keep this level "bare bones". Next level, what would you need to establish a firm base for growth? That may be better equipment, a better place, or more machinery. You can take this list and make it your "grow as you go" list - as your sales come in, you can divert those early profits to growing your business to the second level without incurring additional debt. Third level, think about if your business was making $1 million per year, or per month. What would that business look like? That distant view may help you lay a stronger foundation in the first two levels to support growth.
6. How will you enter the market space? Few businesses succeed without an initial push. Do you have friends, relatives or local businesses upon whom you can count to give you some business and exposure? How about a press release and grand opening celebration? TV coverage is good, as are reviews in the paper and online. You may want to think about some initial marketing and advertising strategies to get your word out there. Also think about the best time of year to start, where your investment is most likely to generate sales and awareness.
7. How will you define and market your brand? Every business has a brand identity. People will associate your brand in different ways. Are you tailoring your product or service to a value market or upscale crowd? Will your customers come from retail, commercial, government or industrial areas? Naming your business and products will impact how people perceive your business. Would you rather buy from "Joe's Cheesecake" or "The Cheesecake Wonderland?" Describing your lower cost offerings as "value-oriented" instead of "bargain" creates a completely different customer impression.
8. What processes to you need to define and standardize? Regardless of what you do, customers will expect you to do it the same all the time. Consistency or the lack of it will very much impact how much repeat business you receive. Some key processes are customer contacts (phone answering, greeting), delivering the product, cleaning or preparing your business, soliciting and accepting customer feedback, pricing and specials, just to name a few.
9. What are your compliance obligations? Do you need to collect sales tax? If so, how much and in what areas? How often do you need to report tax and income? Do you have licensing and permitting to deliver your product or service? Do you have medical or board of health compliance requirements? Do you have to notify customers of any potential risks? Are you required to have specific insurance coverage or law enforcement clearances? Sometimes, a conversation with a similar business owner in a non-competing market will open your eyes to compliance issues that you did not originally know. You may also want to talk about how to structure your business: Sole proprietorship, partnership (lots of risk), Limited Liability Corporation (LLC) or other structure. If you run a business from your home, there are tax, permitting and zoning implications.
10. What pricing and policies do you want? Pricing will of course affect your profitability. Make sure you can clear a profit after all of your costs are covered. As a new business, you probably don't want to be the highest or lowest price in your served area. Set prices too high and you may not get any business. Price too low and you risk being ignored by all but the most value-conscious customers, and being branded as "cheap". Your policies will influence your customers' experiences. Will you refund money? How do you handle scheduling, deposits and cancellations? Will you accept credit cards or bill the customer? How will you deal with past due accounts? Will you offer discounts, and if so, to whom? Will you have employees? What policies do you need to define for them?
11. How will you fulfill the customers' needs? Imagine the moment you deliver your product or service to the customer. How will they receive it? Will there be packaging or presentation technique that must be followed? If you deliver a service, how will your appearance, professionalism and quality of work be observed? Where will you obtain your supplies or services? Can you get samples and make contacts at trade shows or other venues to develop your supply chain?
12. How will you measure your success? Sales and profitability are just two measurements of success. How about customer satisfaction? Will you perform formal or informal surveys? Will it be obvious to you if your customers are happy or not? What is their rate of referring you to their friends and associates? If you don't know how your business is doing from the outside, you can't fix it from the inside.
Don't let these questions intimidate you. Instead, use them to build a more complete business plan, expose your weaknesses and highlight your strengths.
To continue your business journey, consider joining a chamber of commerce, industry group or web forum where other like-minded business people can offer support and feedback. Good luck with your business!
John Huegel is a photographer in the Erie, Pennsylvania area who specializes in Seniors, Dance Studio, Families and other groups. He is active in many charitable and volunteer activities in the Erie area. His work can be seen at http://jhphotomusic.com
Article Source: http://EzineArticles.com/?expert=John_Huegel
1. What is your product or service idea? Are you making a product or delivering a service? What is the need in the market that you will serve? This is the "what". If you can define the specific product or service you want to deliver in a paragraph or two, it will help you to focus on the "how". Try not to be too general. Instead of "Photography" consider refining it to "In-home baby, child and family photography" or some other more specific area. You can always broaden it later.
2. What geographic area will you serve? If you intend to run a mail-order business, you may not have geographic limitations. However, if you have a product or service that is locally deliverable, such as a store, restaurant or in-home service, a pin on the map will define where your business will exist, but from what demographic areas will you draw your customers? Will these demographics change during the week or year? If you have a business where you travel to your customers, consider making a map to clarify your served area. Draw a shape to enclose the area where you want your primary market to be, from which you expect to get most of your business. Make another larger one which would be areas you would consider servicing but in which you would incur higher costs or longer times to deliver your product or service. And then define the third area, in which you may consider delivering services for a higher price or other consideration.
3. What is your competition? Do some research. The phone book, internet, chambers of commerce and personal contacts are all good sources of information. Try to identify each of your competitors' strengths and weaknesses, and think of ways you can operate your business that will overcome their strengths and will take advantage of their weaknesses.
4. What skills are needed to operate this business? Think beyond the actual craft or product. You'll need marketing, selling, customer service, accounting and bill paying, web and computer skills and more. beside these tasks and skills, note which things you do well and don't do well. Be honest, and think about a plan that will either improve your skills, or will bring into your business someone who can coach your or will do these things for you.
5. What equipment or resources do you need? Again, thinking in terms of three levels is helpful. First level, what do you need to barely operate the business out of your home or a small space? You may have most of all of these things now. You don't want to go into large debt just starting your business, so keep this level "bare bones". Next level, what would you need to establish a firm base for growth? That may be better equipment, a better place, or more machinery. You can take this list and make it your "grow as you go" list - as your sales come in, you can divert those early profits to growing your business to the second level without incurring additional debt. Third level, think about if your business was making $1 million per year, or per month. What would that business look like? That distant view may help you lay a stronger foundation in the first two levels to support growth.
6. How will you enter the market space? Few businesses succeed without an initial push. Do you have friends, relatives or local businesses upon whom you can count to give you some business and exposure? How about a press release and grand opening celebration? TV coverage is good, as are reviews in the paper and online. You may want to think about some initial marketing and advertising strategies to get your word out there. Also think about the best time of year to start, where your investment is most likely to generate sales and awareness.
7. How will you define and market your brand? Every business has a brand identity. People will associate your brand in different ways. Are you tailoring your product or service to a value market or upscale crowd? Will your customers come from retail, commercial, government or industrial areas? Naming your business and products will impact how people perceive your business. Would you rather buy from "Joe's Cheesecake" or "The Cheesecake Wonderland?" Describing your lower cost offerings as "value-oriented" instead of "bargain" creates a completely different customer impression.
8. What processes to you need to define and standardize? Regardless of what you do, customers will expect you to do it the same all the time. Consistency or the lack of it will very much impact how much repeat business you receive. Some key processes are customer contacts (phone answering, greeting), delivering the product, cleaning or preparing your business, soliciting and accepting customer feedback, pricing and specials, just to name a few.
9. What are your compliance obligations? Do you need to collect sales tax? If so, how much and in what areas? How often do you need to report tax and income? Do you have licensing and permitting to deliver your product or service? Do you have medical or board of health compliance requirements? Do you have to notify customers of any potential risks? Are you required to have specific insurance coverage or law enforcement clearances? Sometimes, a conversation with a similar business owner in a non-competing market will open your eyes to compliance issues that you did not originally know. You may also want to talk about how to structure your business: Sole proprietorship, partnership (lots of risk), Limited Liability Corporation (LLC) or other structure. If you run a business from your home, there are tax, permitting and zoning implications.
10. What pricing and policies do you want? Pricing will of course affect your profitability. Make sure you can clear a profit after all of your costs are covered. As a new business, you probably don't want to be the highest or lowest price in your served area. Set prices too high and you may not get any business. Price too low and you risk being ignored by all but the most value-conscious customers, and being branded as "cheap". Your policies will influence your customers' experiences. Will you refund money? How do you handle scheduling, deposits and cancellations? Will you accept credit cards or bill the customer? How will you deal with past due accounts? Will you offer discounts, and if so, to whom? Will you have employees? What policies do you need to define for them?
11. How will you fulfill the customers' needs? Imagine the moment you deliver your product or service to the customer. How will they receive it? Will there be packaging or presentation technique that must be followed? If you deliver a service, how will your appearance, professionalism and quality of work be observed? Where will you obtain your supplies or services? Can you get samples and make contacts at trade shows or other venues to develop your supply chain?
12. How will you measure your success? Sales and profitability are just two measurements of success. How about customer satisfaction? Will you perform formal or informal surveys? Will it be obvious to you if your customers are happy or not? What is their rate of referring you to their friends and associates? If you don't know how your business is doing from the outside, you can't fix it from the inside.
Don't let these questions intimidate you. Instead, use them to build a more complete business plan, expose your weaknesses and highlight your strengths.
To continue your business journey, consider joining a chamber of commerce, industry group or web forum where other like-minded business people can offer support and feedback. Good luck with your business!
John Huegel is a photographer in the Erie, Pennsylvania area who specializes in Seniors, Dance Studio, Families and other groups. He is active in many charitable and volunteer activities in the Erie area. His work can be seen at http://jhphotomusic.com
Article Source: http://EzineArticles.com/?expert=John_Huegel
Labels: Starting a Small Business, Twelve Questions to Consider
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