By Dan Boudreau
Businesses surface when entrepreneurs solve problems. Tiny start-up ventures are built by creative souls who tangle with a bit of chaos to devise solutions. If those solutions attract paying customers and the problem solver can profit, then a business might emerge.
Owning a business is touted as one of the best ways to become financially independent and gain control over your life. Most of those who have achieved financial comfort have done so by owning a business or two.
Many small businesses begin as part-time ventures with a simple goal of topping up a monthly income that’s just a little short on one end. Sometimes these little endeavors get out of hand and mushroom into thriving enterprises that employ a lot of people and make the owner some serious money.
If you’re thinking about starting a business, here are a few ways to research your idea without spending a lot of money.
Start with you and what you know. Is there a need for the products or services? Would you or people you know buy them? Is the business right for you? Do you have the necessary skills, knowledge and resources to make the business successful?
Gather information from others. Be open to learning about your business idea. Engage in conversations with anyone you trust, or who might have useful information. Ask what they think and listen to their suggestions. Be curious!
Educate yourself about the business. Start with the Internet and follow your nose. Search your idea on Google, Yahoo and Clusty. Read articles, discussion group forums and blogs. Watch videos. Visit local libraries and read trade journals and books.
Get to know the industry. Check out industry publications and associations. Search out and subscribe to electronic newsletters. Visit association websites and read articles and back issues. Discover the trends and issues, and find out what the main challenges are. Determine whether the industry is growing or shrinking, and what main changes are taking place.
Research the competitors. Know who the main players are, visit their websites and, where possible, their locations. Learn how their business models work, why they are successful, and what improvements are needed. Determine why customers might buy from you instead of the competition. Find out who the leaders are, and what they are doing and saying.
Determine if the business is feasible. Take an early hack at the numbers. Calculate how much it will cost to set-up your business. Determine how much of your own equity you’ll invest, and how much you will need to borrow from others. Do a one-year cash flow projection, including the main revenue streams, operating expenses, and profit. This doesn’t have to be complicated, and yes, you can do it on a napkin.
If your early scan indicates that you should proceed with the business idea, all of the above research will help make your business planning experience easier, faster and more enjoyable.
Though a business builder’s path is packed with challenge and risk, it might just be one of the most thrilling projects you take on, and there are plenty of rewards for those who see it through.
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