Do you have an idea for a business that you’re convinced will be the greatest thing since sliced bread, the biggest innovation since Google and the answer to all your customers’ prayers? Here’s what you need to do.
Figure out what you’re doing. What exactly will your business do, make and sell? Think through all the steps involved. How will you get your product or service to the end-user? Will it be sold in retail stores, sold online, provided personally by you in one-on-one relationships with customers or wholesaled to huge global chains?
Figure out who your competition is. Even if you think your idea is groundbreaking, you have some type of competition. The inventor of the printing press was “competing” with people who told stories and passed down knowledge orally. The inventor of the fax was competing with the Postal Service and the overnight delivery services. You get the idea. Who’s your competitor? What do they offer? How much do they charge? What can you do differently (and better)?
Figure out the overhead. Will you need employees? An office? A store? How about pizza ovens, delivery trucks or computers? How much rent can you expect to pay? Will you need employees? Add up your overhead—the day-to-day costs of things like rent, electricity and insurance. How can you keep it down?
Figure out how much money you can make. How much can you sell your product or service for? How much does it cost to make, buy, store or ship? What’s left over and how much of that goes to overhead? What’s your profit?
Figure out your profits. If you’re lucky your business has low startup costs and high profit potential. If you’re unlucky, it’s got high startup costs and low profit potential. That’s when you need to start over. How can you lower your startup costs? How can you increase your profit potential? Ideally, how can you do both?
Figure out how to pay for it. Once you’ve got your business idea where you want it, you need to know where the startup money’s coming from. If you can’t finance your startup on your own, maybe friends or family can help. If you need to look beyond that circle, banks, credit unions or private angel investors could all be options. Think creatively and consider partnering with companies that have what you lack or bartering your products or services for what you need.
Overwhelmed? Don’t be. SCORE has tons of tools and templates you can use to figure all this out. Check it out here and then get yourself a SCORE Mentor. They can help you come up with the answers to all the questions above…and more. Visit the SCORE website to get matched with your mentor and get free help with your business 24/7.