Starting Your New Business 101Mar 07, 2022
So today, we are talking about getting your business started and we are going to talk through your idea, how you can test it to make sure it’s going to be successful, how much money you need to get started, and where you can look for financing.
Let’s start with the first step - your business idea!
So how do you come up with your BIG idea?
The good news is that there are lots of ways to come up with a great idea for your business.
To get started, ask yourself – what’s next? Look at trends, looks at how tech is changing, how the world is changing. What will we need? What will we want? How will we feel?
Look for a new niche. Look at changes that have happened in the past few years. What new markets has this created? What new niches might have evolved that you can get into?
Apply your skills to an entirely new field. You have skills that may be common in your field, but look around you and see where you can apply your skills where they can create innovation.
Look for under served markets. Is there a successful business model that you are interested in pursuing, but you feel like the market might be saturated? Look to see how well the market is really being served? Are there certain populations, regions, or segments that aren’t being served? How could you reach them or change the business model to serve them better?
Follow your passion. This is my favorite, because if you are passionate about something, you are likely going to really understand the market for it, and you are more likely to see it through when things get tough.
Talk to friends and family. Ask your friends and family what they see you as an expert on or very skilled at? What would they come to you for advice on, or help with?
Get super niched. Is there a niche you are familiar with, that is really specific, that you could serve? The more specific the better. For example, selling marketing services is broad, selling digital marketing services is more niche, selling digital marketing services to the cruise industry, is very niche.
Another great way to come up with a business idea is the problem-first approach.
- Think of a few problems you’ve experienced yourself.
- Which problem do I wish to solve?
- What’s the answer to that problem?
- What product or service would help answer that problem?
There are also sites like Trendhunter and Kickstarter that you can go to for inspiration.
- Brainstorm your idea.
- Get feedback.
- Join our FREE community of other women starting their business to support you on your journey.
- Make sure your idea will be successful be testing it with a MVP
Before you dive in with your big idea, wouldn’t it be great if you could somehow know ahead of time, if it was actually going to be successful?
What if there was a way to find out if it would really sell?
The great news is that there is. One of the best ways to test an idea, is to create a minimum viable product.
Simply put, that means the smallest thing you can put out to your market, to test whether they actually want it. It’s a great opportunity to make sure there is demand,
before sinking a lot of time and money into your idea.
Assuming that your idea turns out to be solid, it will also give you real world feedback, and ideas on how to enter the market, with a stronger product or service, better suited to your market’s needs.
This method works for both physical products and also for services.
SO HOW DO YOU COME UP WITH A MINIMUM VIABLE PRODUCT TO TEST?
Start with Market Research
The first step to creating your minimum viable product is gathering information. Conduct surveys, ask around and analyze your competition, because the more information you have, the more likely you are to succeed.
Pre-selling. All you need to invest in here is the prototype, and some high quality marketing materials like photos, and video.
The added bonus to this method, is that you also get the funding from the pre-sale up front, to help you pay to develop and produce the actual products.
If you have a large audience already, you can launch the pre-sale to your audience on your website or social media.
If you don’t have an audience, you can tap into existing audiences like Kickstarter, and other crowdfunding sites like iFund Women and IndieGoGo.
Perhaps you have an online course idea. Start with
selling some live webinars. It will save you the costs and months of preparation and if you follow them up with Q&A session, it will help you develop your material for the actual course launch, so you hit the target right out of the gate.
Another great way to test both products and services, is to conduct customer interviews. It’s super simple, and so often overlooked.
So many businesses fail because they skip this step, and either there was no need for the product in the market, or they missed the opportunity to improve it before they took it to market, by soliciting feedback.
You think it’s a great idea, obviously, or you wouldn’t be creating it. But you need to make sure YOUR MARKET likes it as much as you do, and if they don’t, why not?
Without testing, you are guessing, and you don’t want to risk your businesses future on guesswork. Plus, some of the best ideas come from your customers, why waste the opportunity to make your product or service even better, before you launch it?
At this stage you need to: 1. Come up with a minimum viable product. 2. Produce your minimum viable product. 3. Test your minimum viable product.
- How much money do you need?
To figure out how much money you need to start up, work out both your business and your personal budget. From there, you can calculate what revenue your company needs to produce, to cover both.
It is a great idea to take a short course on financial management for small business, just to make sure you have the basics under control.
It’s also important to prioritize your spending. Spending is the easy (and fun) part, so it’s easy to turn to that when the other stuff drags you down, and rationalize that you are still “doing the work.”
But things like inventory, supplies, rent, ongoing service fees and trademarking should be put off until the last possible moment.
It’s likely to take longer to get started than you thought, and even longer than that to turn a profit, so don’t rush to make those purchases.
As entrepreneurs, we tend to be optimists, which means we also tend to lean toward the best-case scenario when planning. So, keep that money in your pocket and work from home until the last possible second, don’t buy that expensive equipment until you are ready to use it, and get all the low cost and free groundwork done before you move on to the expenses.
Keeping a tight rein on spending, while you get your business started, is a smart strategy to help make sure you have funding when you need it.
- Complete personal budget for the year. 2. Complete business budget for the year. 3. Take basic small business bookkeeping or financial course.
- Where can you get the Money to start your business?
Once you have your financial plan laid out, you will know how much money you will need to get up and running, and stay operating, for the first year.
Many new businesses use a combination of personal savings, investments from friends and family and loans.
Other options are:
Credit cards: Be careful with credit cards. They are easy to obtain, and are great for making purchases, but the interest rates are high, and if you can’t pay the balance off each month, that interest will add up quickly.
Operating line of credit: This is a loan with a set limit, that you can draw on when you need to. Interest rates are lower than most credit cards, and some loans, and you only pay interest on the outstanding balance. There are no fixed payments, except for a monthly fee and interest, meaning you have the option of paying down the loan as you can afford it. It is usually secured by your house or other assets.
Term loans: Term loans are longer term options used to cover expenses like equipment, renovations, and other large purchases. They are arranged over a fixed term, with a set repayment schedule. The lender will require security for the loan, such as equity in your home, or other assets.
Equity investors: These investors provide financing in exchange for a share of ownership or equity in the business.
Venture capital: Money that comes from a pool of investors, who are looking for a very high rate of return on the investment. Angel investors: Individuals or companies that look for higher risk investments, with good growth potential.
Angel investors usually are interested in long-term, high-return investments.
Grants: Money that does not require repayment. The criteria are usually very specific, and the application procedure can be long and time-consuming.
Crowdfunding: Using a small amounts of money from a large number of investors. It usually involves showcasing your business on a crowdfunding platform, like Kickstarter, iFund Women or Indie GoGo. There, the general public can buy into your idea to support it, often in exchange for special first purchase options, or other perks to prefund your idea.
There are a LOT of foundational steps to get your business up and running, but what we talked about here today are three really great way to get started on the right foot and help ensure your success later on as well.
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