When starting anything, be it writing, learning or starting a business, we often fail to plan enough, and instead we dive right into whatever project it is we are taking on.
What we don’t realize, however, is that putting together a plan of action will help us stay on task and accomplish what we hope to more effectively and efficiently.
I have noticed that my writing is always better, clearer and more focused when I plan and outline first, and the same is true when starting a new business. If we set steps and milestones for things we need to accomplish in the start-up stage of our businesses, we will find that we will become more equipped to make informed decisions more quickly, and profitability will come sooner than if we hadn’t planned.
The following are not specific steps to follow, but ideas you should keep in mind when outlining your own plans of attack when starting a new business:
Do market research as early as possible
As mentioned previously, market research is extremely important in determining whether or not you should pursue your business idea. While you may think your business idea is great, what is more important is what others think of the idea–this includes your potential customers and even your competitors (you’ll see why after reading the next two items).
Doing market research will give you a clearer picture of:
- If your idea will be profitable
- What your customers want
- What your customers don’t want
- What marketing causes your customers to buy
- Where and how your competitors are advertising
- What advertising probably doesn’t work
While all of these are important to know, the most important question to answer at this stage is: “will my idea be profitable?”. You will never know for certain until you try yourself. However, you will get a pretty good idea based on what benefits customers are looking for in a product, if similar products are selling and if there is a large enough demand for this type of product.
Go where others ARE, not where others AREN’T
This is extremely important, at least for your first business. While you may have heard some huge success stories of those who invented this great new product and made billions from the idea, you probably haven’t heard of the thousands of examples of those who have crashed and burned by inventing something new that never caught on.
It is very hard to do market research on something that hasn’t been invented yet. However, it is extremely easy to get information on existing products that customers are demanding presently.
Most importantly, if there are large and established businesses selling these existing products, you know these products are profitable! You know people are buying them and you know businesses are successfully advertising them.
I don’t want to tell you not to try and sell something brand new and innovative. But I do want you to understand that this is far more risky. It is much more safe selling something that is already being demanded and sold.
Furthermore, (and this is very comforting to some) if you are going into business selling an existing, successful product and you have made NO sales, it’s NOT the product that’s the problem, it’s YOU. Why is this comforting? If it’s the product that is the problem, there is very little hope for success. If the product isn’t catching on, it doesn’t matter how clever your marketing is. However, if YOU are the problem (meaning your business), all you have to do is change your marketing mix. You already know you are in a profitable industry and success is closer than you think. Changing something you are doing is way easier than changing the public perception on a new, mysterious product.
Take note as to what your competitors are doing
This is a very similar point to the previous one. So now you know that your competitors find certain products profitable. Now you want to know what kind of advertising is profitable, what marketing mix is most efficient and what product positioning causes your potential customers to react most favorably.
The answer to these questions are not that far away at all. Your large competitors have already spent A LOT of money experimenting and determining the most effective advertising for these products. They also have accumulated a TON of consumer data as to what causes them to react. Use their knowledge to your advantage. You can see the product of their research through their advertising.
Chances are if they are doing a certain type of advertising or market mix, it is working well for them. And chances are, if they aren’t doing other types of advertising, they probably have already experimented and failed.
This doesn’t mean that you can’t experiment with new things and be successful, but you know it is a safer bet by taking note of what your large and established competitors are doing right now.
Doing this is also a useful tactic when combating doubt.
Know when NOT to pursue something
As important as it is to determine the profitability of a project, it is equally as important to know when not to pursue a project. You should set up some measure or criteria to determine if a business, idea or project is worthwhile to pursue; and then make sure you follow this criteria strictly. After all, you never want to waste time and money on something that turns out not to be profitable.
Automate as much as you can
If there is research you are doing, or ANY redundant tasks that you are performing, see if they can be automated. This is important because it will save you time and make it easier for you to concentrate on other things while your computer does all of the work. This is also especially convenient in that automation, as opposed to outsourcing or delegation is free!
Take note: at this stage, the only level of automation you should be doing is basic and free automation. Don’t go hiring a programmer or spend too much time learning shell scripting or automation languages. At this point, going any further than the basics will be counter productive and only tax your time and money
Delegate and outsource as much as you can
Do this within reason. In fact, only delegate and outsource as much as you can afford. That said, if you can afford it, it is important that you do hire other firms or employees to handle certain tasks for you.
If you are getting into an online business for example, yet do not know the first thing about web design, it wouldn’t make sense to take three months to learn it and then start your business. Hire a web designer instead.
The important point to remember here is that you should, whenever possible, leave the technical work to the specialists. They will do a better job than you, their work will be more effective in accomplishing their goal and it will free up your time to make more decisions and explore new ways to market your product/service.
Invest as much as you can AFFORD
This goes along with the previous point. Be careful not to overspend and get yourself into debt. This can be dangerous and you may soon find that you will be unable to afford monthly payments on your borrowed money.
On the flip side, NEVER spend too little either. Being too cheap will cause you to: a) do everything yourself and b) under invest in the important operations of your business (such as advertising and product quality). This will ultimately result in wasted time, lack of success and the realization that you need to spend more money.
Brainstorm ways to SELL your product
The sooner you have a strong list of possible ways to sell your product, the better. You will have more flexibility to experiment with ideas earlier on in the start-up process and you will open up more creative avenues to explore new ways of advertising.
Making a list of different marketing ideas will also allow you to start putting together a marketing plan, allowing you to more tactically advertise your product.
ALWAYS look for opportunity
Put your capitalist hat on, you are an entrepreneur after all. Look around you. Critique any business that you interact with on a day to day basis that has set some sort of status quo. Do they do something inefficiently? Is there something that they don’t do (or do) that you can do better?
Look at these status quos that these established businesses have set as an opportunity. See how their operations or products can be improved. If you can come up with a better way, or a more efficient way of doing something, consider looking into it.
The key here is to always use this lens when viewing these businesses. If you critique these businesses as often as possible, you will never be out of good business ideas!
Consider all of these factors when putting together a business plan, or a start-up outline. It will help focus your actions and smooth out the start-up process. Taking these points into account will give you a better sense of “business direction” and point you towards the right path to profitability.