On Your Own

Article Tools

Image Gallery

Print

E-mail

Comments

RSS

2. MARKET RESEARCH: Your new business will be based on either a service (baby-sitting, window washing, television repair) or a product (custom drapes, homemade cakes, photographs). Before you even consider starting a business, you should know all you possibly can about your product or service in relation to your community. Is there a real need for your business? What is the competition? How will your product or service differ from what's already available? How is the competition doing? Is your idea unique enough to beat the competition and will you be able to price your product at a competitive level? You must be intimately familiar with your community, its income level, and its interests, so that you can gear your business to your area. If, for example, many of the women in your neighborhood work, then a service which has to do with housekeeping, baby-sitting, or catering will probably find a ready market. But if very few of the women in your area work outside the home, then these services will be superfluous. Check with your local Chamber of Commerce for general information on existing products and services in your town, as well as income levels and market information.

3. CAPITAL: Having enough capital often makes the difference between success and failure with a new business. Many new businesses do not make a profit for the first few years, and if there is not sufficient capital to buy more stock, invest in advertising, pay the rent, etc., the business will fail before it ever really has a chance. You should be ,realistic about your costs and long-term expenses, about your outside credit sources and your initial start-up costs.

4. LOCATION: Where you locate your business is of prime importance to its future success. Unless you are starting a mail-order business, you will have to count on a certain amount of local traffic to bring in customers. Check with real estate agents and local newspapers to determine how much business is transacted in a given area, and how many people pass through. You will need to consider the following questions in your final selection of a location: Do you want to buy or rent? Will you need to renovate? Can equipment fit through the door? What is the electrical capacity? Is there storage space? Bathroom facilities? Easy access? You also must check with your municipal government on zoning laws and health codes. If you are setting up a business at home, find out if there are laws prohibiting signs or displays in your neighborhood. In your choice of location, do not allow sentimentality to overrule practicality: That charming old Victorian house would make a lovely antiques shop, but not if it is located on the outskirts of town on a virtually deserted side street.

5. PROFIT POTENTIAL: While there are other reasons for starting a business, the profit motive is usually a strong one. However, many people do not accurately figure out in advance exactly what kind of profit they can make. So they begin a business and three years later realize that they will never clear as much as they did while they were working for a company—and they're working harder than they ever had before. If they went into business mainly for their own personal satisfaction, that's fine. But if they expected to send their kids through college and buy a summer home, that's poor planning.

RSS | Comments | E-mail | Print