Preparing
for the adventure
Information and knowledge
you will need:
Product knowledge
It is important that you know, and continue to learn, everything
you can about your product or service. How it works, what benefits
customers will gain from buying it, what are the social and economic
trends which will affect customers purchasing choices.
How is your product made?
What is the production cycle for your product or service from start
to finish?
The more you know about
your product and the more you keep up with changes in the industry
of your business, the easier it will be for you to be innovative
and change with new discoveries or changing customer needs.
Marketing knowledge
You could know everything there is to know about your product
or service, but if you do not understand your potential customers
and what their buying patterns and needs are, you may have difficulty
making your business succeed.
What do your potential
customers like in similar products? What don't they like about similar
products? Who are they buying from now and why? Remember you will
have to make your product or service stand out from the rest - not
in your mind but in the mind of the customer.
Management
Creating a business and getting to know your customers can be
an exciting component of making your dream a reality. It will also
be important for you to know how to manage the business. Planning,
organizing, measuring progress and solving problems are all part
of the management of your business. This includes financial management
as well as managing the details of a day to day operation. If you
do not have any management experience you will need to learn management
principles or hire someone who can help you manage, or both.
Human resources
Some entrepreneurs, called "lone eagles", find it possible to
conduct business without the need for hiring other employees. Depending
upon the nature of the business you choose and the process which
will be required for producing and selling your product, you may
need to hire employees to assist you. Information about hiring,
managing and paying employees will be important to the long term
success of your business.
Finding the resources
and information you need
It is a rare individual
who starts a business knowing everything they need to know. That is
why starting and building a business requires the ability to learn,
search and discover. Where do you start the discovery and learning
process? Here a some suggestions.
Talk to others
in the same or similar business
A good means of learning about your industry is to talk to people
in the same or similar business. Seek out people who are operating
businesses or creating products similar to the ones you are considering.
Most people will be willing to share information as long as you will
not be going into direct competition with them. Be honest and tell
these people what you are considering and that you would value their
advice. Often times they can help you to avoid mistakes that they
made in the beginning of the business.
Read trade or industry
journals
If there are trade or industry journals in the industry you
are considering subscribe to them. Trade journals and magazines
often have information on upcoming trends and opportunities as well
as problem areas you may encounter when producing your product or
marketing to customers. Your public library reference desk can be
of assistance when searching for journals and periodicals of special
interest.
Attend trade or industry
conferences
Some industries hold conferences which cover various topics about
the industry you are considering. If you have already been working
in that industry, you are probably already aware of association
conferences which may be available to you. If you are new to the
industry, trade journals will often carry advertising for such conferences.
Join a trade association
Other businesses similar to yours, also have an interest in sharing
and gaining information. Trade associations are groups which join
together for the purpose of assisting each other through knowledge
and information sharing. Trade and industry journals, other individuals
in your industry as well as your public library may have information
regarding trade associations you could join.
Seek professional
advice
Ask your accountant, your local development corporation, the Small
Business Development Center in your area, the Small Business Administration,
your banker or Chamber of Commerce for information they might have
regarding similar businesses to visit or conferences you could attend.
It will be important
that you build a group of advisors for yourself and your business
early in the development of the business. Advisors include such
people as:
- accountant
- banker
- attorney
- marketing and management
consultants
- other entrepreneurs
These advisors can provide
insight on your business, help you seek out needed information,
and assist you in making decisions.
Business Options
Once your keen interest,
capabilities and research have helped you to determine what kind of
business you want to be in and what kind of product or service you
want to market, then you can decide on options for starting.
There are three options
available to you: Start your business by creating it, buy an existing
business you can develop, or buy a franchise business.
Creating
your business
If you have a lot of
creative energy, or you are convinced that you cannot find and existing
business which fits your vision, creating your own business may
be your best option.
When you create your
own business you have the greatest freedom possible. You have a
fresh start. You can choose the name, location, inventory and the
product line.
Creating a new business
can be exciting. You will be able to develop the personality of
the business, it's image and reputation.
On the other hand, creating
a business also means creating customers as well as products. Unless
your business is one which lends itself to small-scale start-up,
creating a new business may require a great deal of capital. Raising
the money for a business that does not have existing customers or
past history can be a challenge. The sections on business planning
and raising the money can help.
If you choose to create
your business, you may want to consider other partners or stockholders
who could bring capital or expertise into the business which may
be important to the business success.
Buying an existing
business
If an existing business
is available for sale which can facilitate your vision, you may
want to consider buying it. The advantages of buying an existing
business are:
- existing customers
- a tested product or
service
- the efforts of the
previous owner(s) in building and establishing the business
- goodwill
- an established location
and address
- employees who already
know the business
- inventory and supplies
Buying an existing business
requires research.
- Why is the present
owner willing to sell?
- Are there any future
trends which would impact the business?
- What is the reputation
of the business with customers?
- Are there any legal
problems?
- What are the assets
and liabilities?
When considering buying
an existing business consult your attorney, your accountant, your
banker and any other advisors who may have information regarding
the company's reputation and track record. If the business has a
positive reputation with tried and true products and services and
loyal customers, it can be a way of speeding up the progress of
your vision. But do your homework and proceed carefully.
Buying a franchise
If creative freedom is
not a priority in your vision, a franchise may be good option. The
advantages of buying a franchise are:
- Business planning
is prepackaged
- The products and services
are already market tested.
- Established image
and goodwill.
- Management systems
are already developed.
A considerable amount
of the start-up work is already completed for you. Franchise businesses
also require start-up capital, but usually the capital needed is
well outlined for you.
There are disadvantages
to purchasing a franchise:
- You will need to conform
to the existing way of doing things.
- You will only be allowed
to sell the franchise products or services.
- You will share in
any problems already created.
- You will have to share
the profits.
Before you consider buying
a franchise you should research the company's reputation and track
record. Find out how the franchiser rates with financial reporting
services and banks.
Visit with other franchisees
to gain an understanding of reputation, support and potential problems
of the franchisor. The Small Business Administration and business
periodicals occasionally list and rank current franchises available.
An once again, consult
your attorney, accountant, banker and other advisors before making
a final decision about the purchase of a franchise.
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