Six Steps to Starting Your Own Business
Maybe you have a million-dollar idea, or maybe you have just grown tired of working for someone else. Either way, becoming your own boss requires a mix of creativity, strategy and street smarts. We've tapped the minds of experienced entrepreneurs and business experts to give you six secrets to success. Heed these guidelines as you take the next steps toward starting your own business.
See Also: Test Your Small Business Know-How
Know your customer
The better an entrepreneur understands the target audience, the more likely he or she is to create products and services that buyers are willing to pay for, says Joel Wiggins, chief executive of the Enterprise Center of Johnson County, a business incubator in Lenexa, Kan. It sounds simple enough, but that critical edge, whether gained from experience or market research, can separate failing companies from successful ones.
That's certainly the case with Marcie Carson. Based on what she learned from running IE Design + Communications, a Hermosa Beach, Cal., graphic design firm she co-founded in 1995, Carson was confident that customers would pay a premium for high-end, eco-friendly paper products. But before jumping into the design process, Carson spent two years researching gaps in the upscale paper market. The result: a product line shaped not by aesthetic whim but rather by a thorough analysis of the target audience. Carson's new venture, Mixt Studio, sells sustainable goods ranging from cards and gift wrap to totes made from fabric-like paper.
Test your idea
One of the best decisions an entrepreneur can make is not to go into a business that's doomed to fail. A simple way to determine the likelihood of failure is to test an idea before sinking time and money into it. Business consultant and author Jim Beach recommends taking a new idea to ten prospective customers and finding out how many would buy it.
"The market will give you a very strong indicator, and you can save thousands or even millions of dollars by going to the market before you design your product or develop that company, because you'll know you're creating something the market demands," Beach says. You can also search patents and trademarks to see if someone has already registered your idea.
Pick a sales strategy
Understanding how your product will be marketed and sold is critical to its success, says Tom Fleckenstein, director of the Virginia Highlands Small Business Development Centers, in Abingdon, Va. Much will depend on what is standard in your industry, he says, but success will also depend on your preferences and skill sets. The best business owners aren't necessarily the best salespeople.
For example, Carson knew she would need to focus all of her energy on product development, design and manufacturing. As a one-person start-up, that would leave little time for sales. At her first stationery trade show in 2012, she found a sales agency that agreed to peddle her paper goods to retailers. The agency's sales representatives have already helped Carson place her products in about 200 stores in the U.S., Canada and Japan, a feat she couldn't have achieved on her own in that time frame.