Wednesday, March 28, 2007
How to Research your Business Ideas
If you read parts one and two of "Choosing the Right Small Business", and if you completed the exercises, you will have a good idea of what you are good at doing, and you will have several related business ideas or possibilities. Next, you will want to add your personal skills, abilities and experience into the mix. So, add to your lists your related experiences--work experience, volunteer experience, school experience, hobby experience and so on. Your resume might come in handy here. Look at the industries you have worked for or been involved with. And, look at the professional skills you have learned—making customers happy, completing projects on deadline, budgeting, --whatever you have done that you think would be helpful in your business. For example, if you are a charming person who loves music and travel, and you also have 3 years experience in retail, you might look at opening your own music store, selling to retail outlets, publishing a newsletter to help music stores increase their sales, and so on. Again, the ideas are unlimited until you compare them to who you are. If you have experience in retail but hate it, then opening your own store should not make your list! So, take your business ideas list and circle the ones you have some experience in and some qualities which will be helpful in running those businesses. Circle the top 5 ideas from your list –the ones you are most excited by. Then, call or visit some of those types of businesses. Check out the environment. Make notes of what you like and dislike. Do you think they are profitable? If you can talk with some of the people who work there, ask them what they like about their jobs, what they dislike, how long they have been there, and so on. If you can meet or talk with the owner, ask for some information. Tell them you are doing research (which is true!) and would like to have a few minutes of their time to ask some questions. Possible questions include the positive and negative aspects of their business, how did they get started, what is their biggest expense, what are their growth plans, how do they "keep up" with industry trends, and so on. Or, apply for a part-time job there (or full-time if that would work for you). The best way to learn any business is by actually being there, doing the work, seeing the whole operation. A paid apprenticeship is a time-honored way to learn a profession, and it can help pay bills or save for your business in the meantime. In talking with people who want to go into business for themselves, I often find they like the idea but don’t know the real gist of their chosen business. For example, it seems like everybody wants to start their own restaurant. It appears glamorous and fun and heck, anybody can cook. Having worked for several years in restaurants, I can attest to the fact that it is very hard work with extremely long hours. It’s messy. There is always cleaning that needs to be done. Customers can and will be rude and obnoxious (and also fun and generous). Profit margins are low. Costs have to be tightly controlled—food costs, labor costs, and supply costs. A bad location can kill you. Employees will steal from you, fail to show up for work, quit without notice, and you need them because they are key to your success. You have to market it constantly and be smart about it. You have to predict sales so you can make schedules and order the right amount of food. You need quite a bit of expensive equipment (coolers, freezers, grills, computers, dishwashers, and etc.). That equipment will break during your busiest time. You won’t know how to fix it. The glamorous part—you might meet some celebrities, you will meet some great people, you will (hopefully) be complimented on your great food and/or service, you can have fun, and you probably won’t go hungry! So, be sure to check out the "unglamorous" side of whatever business you are interested in. A job in the industry is one of the best ways to learn this before you sink your money into something and discover that you really don’t like it, after all. You can also continue your research online. Many industries have associations which have good articles and links to good information sites. Also search for related forums where you can read posts and ask questions of others who are working in the industry. After this exercise, you should have narrowed the ideas list considerably. You might have even crossed off all of your top 5! Don’t despair—you have learned valuable information without spending your savings! Go back to your list and using what you now know, choose another five. You can repeat these exercises until you have enough information to make a valid decision about what kind of business you want to start. You might find out that there is a gaping hole in the industry just waiting for you to step in and open your business which fills that hole. You will have much better odds of succeeding because you have chosen a business that is based around who you are and how you want to spend your work-time, which is a huge part of your life-time.
Posted by your name at 9:06 AM