Successful business owners plan ahead. Prior to starting a business and plunging into the entrepreneurial world, they do market research. This research can take different forms. You can talk to others in the industry, work for someone else in the field, look online or in books for supporting information, and talk to potential customers to get a feel for what is needed.
It’s important to crystallize your small business idea using market research. Just because you enjoy collecting rubber duckies doesn’t mean you should start a business to sell them. You need a bit more than that.
Choosing the right business for you
Often, when you ask a small business owner why they started their business, you’ll usually get a passionate answer. It’s not a nine-to-five thing for them. Your question taps into something special. Watch carefully, and you’ll sometimes see a twinkle in their eye as they remember the moment they embarked on their entrepreneurial adventure.
What do you love in life? What kind of work doesn’t really feel like work to you? Whatever that drive is should lie at the center of your business concept.
If you love to write, consider becoming a ghostwriter or freelance writer. If you enjoy baking, you might consider opening a bakery. Perhaps you enjoy fixing cars or appliances. People are always in need of a good mechanic or handyman.
Whatever your passion and purpose in life is, you should choose a business that aligns with your goals.
Sometimes the best business idea might fall into your lap
Sometimes what you love to do is so strongly apparent that people will seek you out and ask for your service before you have actually formed a company. That happened to me when I first started as a ghostwriter. My first project came as a referral from a friend, who knew I loved to write. That first book launched my career and, as more work followed, it blossomed into a productive business.
Chris Connell, owner of Callstorm Solutions, a company that specializes in IT solutions for small businesses, said, “People would always come to me and complain about their computers being slow. I found myself explaining over and over that they didn’t need to buy a new machine as they were usually just running into malware and viruses. I finally realized there was a need there and quickly shaped my business to handle these issues.”
Are people coming to you, asking you to provide a service? If so, and you enjoy the work, consider turning it into a business, as that’s a good sign you’re onto something.
See if you can charge less than your competition
Part of your research should include finding out the price point of your competition. If you can keep your overhead low, you might be able to charge your clients less.
Voiceover expert John Zadikian discovered that “there were plenty of people who could write and record a generic-sounding on-hold message, but they charged too much. Small and medium-sized business owners couldn’t afford it.”
He formed his own company, John Zadikian Multimedia Communications (http://voice123.com/johnzadikian), and gave clients what they needed for a fraction of the price of his competition.
However, it is easy to charge too little. Do not charge less than you’re worth. It makes it hard to keep your doors open. Always give yourself a safety margin to account for slow periods in the business or other difficulties that might arise.
Sometimes you need to ignore the advice of others
It’s important to talk to people around you and see what they think of your business idea. Find out what your potential clients really want. Having said that, well-intentioned people can be pessimistic and negative when it comes to truly creative ideas.
When Bobbie Asad, owner of The Mad Hatter (http://madhatternc-com.webs.com/), asked people what they thought of her idea of opening a small 225 square foot shop featuring hats and teas, her friends told her it was far too risky.
Asad been an electrical engineer for thirty years and was ready for a change, so she followed her heart, her passion. But she didn’t do so willy-nilly. She had a plan.
“Department stores have such a limited selection of hats,” Asad said. “So I opened a business in my hometown, where I’m very involved in various clubs. Ever since I opened my shop, everyone has been so supportive. Many ladies come to me for hats for the local garden parties, teas, and bridal showers.”
Asad reports that The Mad Hatter paid for itself the first month it opened one year ago. She has continued to do very well and loves what she does.
Fill in the gaps that your competitors have left behind
Larger companies will sometimes focus their attention on filling the needs of the masses, leaving a nice group of niche prospects for you to sweep up. If you can find a way to service those people, you can be very successful.
David Trounce, owner of Mallee Blue Media, a web marketing consultant for small businesses (http://www.malleeblue.com/) said, “When I initially did market research for our company, I discovered that other companies would fail to create proper client profiles. As a result the promotional materials created were very generic. When we focused on a single product and a single buyer cycle for each prospect, we were very successful.”
Part of your market research should include errors made by your competition. This data will help guide you on how to set up your new business.
Try it out part time
It can take a while to build a business from scratch. Quitting your paying job to launch an untried career is risky. It’s a good idea to include personal man hours in a trial as part of your market research.
Test out your idea, employing safety nets and backup plans. It will give you a chance to really see if it is viable. As you go, tweak the model to match the feedback you receive.
It’s easier to start part time if you’re mostly online. However, if you require a brick and mortar shop, try finding an existing shop that will allow you to sell within their store. The rent will be reasonable and you can come and go as you please.
Passion, backed by market research, will help you launch a successful business and continue to be viable into the future.