The following steps will help you clear your mind and start working toward your new business dream.
1. What kind of business do you want to build?
What funds do you have (or wish to attain) to start? Many new entrepreneurs want to start a business for the least amount of money possible. Service (versus product) businesses typically require very little capital to start (often just a computer and $20 in business cards). If you have little in the way of start-up funds, starting an online store would be cheaper than starting a retail store. (But with retail, even if you are starting online, you still have to buy your inventory.)
Brick and mortar or online? A brick and mortar business means your market is local or regional. An online business means your market is national, or even international. This choice determines what trend you're going to market to and who in your "neighborhood".
What will best match with your skills and interests? Your skills and time are the “core asset” you have in building a new business, so your business idea should leverage your talents and experience. People who have worked for years in a restaurant can start a new eatery with greater likelihood for success. If you don't like old people or you're not good with kids, you don't want to start a daycare business or an adult daycare business. See what your skill set is, and then think about how you can leverage that into a business providing value to others.
Product or service? Service businesses have the advantage of low startup costs. With a service business you will need to split your time and efforts between working IN your business (meaning doing the service) versus working ON your business (or working on marketing and growing your business).
The advantage of product-based businesses is that the business income is not dependent on your hours billed. It is now easier and cheaper than ever to source products internationally (such as from China). Your key task will be to determine the needed products or components, your purchasing source, and whether that source is going to be reliable and sustainable. You will also need to know whether you can buy those products, mark them up, and still gain a profit.
The line between products and services is often blurry but represents additional opportunity. You can augment your service business with products (such as selling yoga clothing at yoga classes). Or you can make a product more service oriented, such as bundling training with a technology sale.
2. Who are you selling to?
Your most critical success factor will be in knowing who you are selling to – and if there is enough of a potential market in order to sustain a growing business. What does your town need? What's lacking? For more information on growing demographic segments and product ideas click here.
3. What will delight your customer?
Good ideas and breakthrough concepts are not enough. Your success will come from really knowing what your customer wants and anticipating their needs. It is always useful to poll your customers or conduct focus groups, but often you need to look beyond current needs/wants. You will want to deliver not just what they expect, but also what they don't expect. You have to delight your customers with the unexpected.
If you are looking for inspiration or confirmation of your business idea, check out the latest webinar on hot businesses and consumer trends, and what actually is driving consumer purchases.
Connect with a SCORE mentor for free guidance!