Getting Your Start-Up Started
Making the dream of starting your own business a reality takes hard work, timing and a little bit of luck. The PC revolution and the Internet have opened up the floodgates for start-ups and recent studies show that half of the adult population and roughly 60% of teenagers are interested in starting their own business. With the economy rebounding in a big way, many are once again referring to this as "The Golden Age" of small businesses.
You've hatched an idea and you're transitioning from dream to action. You have a business partner or partners who you've teamed up with to bring your idea to fruition. Here are specific steps you can take to enhance the chance that your product or service will be a success.
Creating A Business Plan
A business plan is a comprehensive road map for your venture, and it also has a vital function-to convince investors your business is bankable. Unless businesses have seed capital, technology start-ups can't get off the ground and more established companies struggle to grow. Receiving funding from venture capitalists and banks largely depends on how effective your business plan is.
A concise business plan is critical because potential investors need to quickly determine if they are interested in the opportunity you are offering. Issue an overview of the business opportunity, your specific strategy, and the capital needed to grow the company. This is an Executive Summary Plan, and its main purpose is to provide investors with a recognizable, fiscally responsible investment opportunity.
The Advantages Of Partnering
The many skills required to run a business include organization, fund raising, promotion, production, customer service, and management. No individual possesses all of these skills, and looking for partners to complement aspects you lack can mean the difference between success and failure.
Pete Slosberg and Mark Bronder, co-founders of Pete's Brewing Company, discovered something interesting when they studied the brewery industry to create their business plan. Breweries weren't operating at full capacity and it was possible to lease out space at breweries as opposed to raising millions of dollars to build their own. Slosberg contacted the nearby Palo Alto Brewing and arranged to lease it when it wasn't in use. Today, Pete's Brewing maintains strategic alliances with other brewing companies to produce their product. It's a significant cost saver without the responsibility of owning and maintaining the capital equipment.
Filling A Need For A Product Or Service
"One can get anything if he is willing to help enough others get what they want," says salesman Zig Ziglar. Successful entrepreneur Brian Maxwell followed this simple advice. In the late '70s, Maxwell was one of the top-ranked marathoners in the world. During a race, he developed stomach problems that drastically affected his performance, and the experience led him to believe that he needed a quick energy supply during marathons. Over a three-year span he created what eventually became PowerBars.
13 years later, PowerBar Inc. boasted $150 million in sales with 300 employees. The lesson? Through firsthand experience, Maxwell determined that marathoners wanted a fast supply of energy during marathons. The first question entrepreneurs should ask is if there is a need for their particular product or service. The follow up question is "Can a need be created?"
Receiving Feedback On A Product Or Service
Is it possible that your business idea is similar to an existing product or service or that it's too far ahead of the curve? Because there are always things we can't spot ourselves, feedback from others is invaluable. Eliciting comments and suggestions from your target audience opens your eyes to potential problems or pluses you haven't anticipated. Constructive criticism can be incorporated into your business plan before rollout. A wide range of feedback is important because it's also helpful to find out why your idea may not appeal to a segment of the population.
Sources for feedback begin with family and friends, but keep in mind that they can be biased because they want you to succeed. Salesmen and business owners used to dealing with the public are great resources. Government-related ventures have access to the Small Business Administration. The SBA gives free assistance to entrepreneurs that include evaluating business plans, consulting, and offering mentor-protégé programs. These programs offer government assistance and funding to help develop and grow small businesses.