It’s time for action. You’ve tested your useful, new business idea in the marketplace and refined it. You’re ready to introduce your product or service on a wider scale.
Don’t be too hasty. Preparation – organised planning –that important final step needs careful thought before you thrust your business into flight.
It’s astonishing how many would-be entrepreneurs and start-up owners forget this step, plunging headlong into their business venture without proper preparation.
Here are some important considerations before you take the plunge:
Almost every business has some fatal flaw. Do you know yours? It could be that you are stuck with only one supplier for a key material. How important will personal selling be for your business? Does your business have strong enough credibility to attract quality people? What about distribution channels for your product or service.
Plan B is a good idea
Do you have a back-up plan B for any of these areas – suppliers, selling, specialised skills and distribution channels?
Let’s start out first with a business plan and discuss whether you need one.
Business plans are usually the bane of small business people. There are two schools of thought. Some believe that business plans are essential. Others advise you go without one. The middle road: prepare a one-page business plan. Go to the One Page Business Plan website (www.onepagebusinessplan.com) and get yourself a template. All you need to do is pump in your vision and objectives and the numbers you’ve collected anyway by now when doing your market test.
When you’ve finished your one-page business plan don’t put it in a draw or file it on your laptop and forget about it. It is a living, changing document. Place it where you can see it and revise it as you grow your business.
Channels to market
Selling or distribution channels are important to your business plan. Typical sales channels for products include a sales force, distributors, wholesalers, retail outlets, telemarketing, the Internet, direct mail, brokers, partners, seminars and trade shows.
Your initial market test should give you an idea about what selling channels work best for your product or service. Decide carefully whether you will establish your own selling channel such as a retail store or whether you will sell through several retailers. You may want to begin with one or two main sales channels and later expand or get another small business to handle sales in other channels where they have the expertise.
Hire the best
Specialised skills are important to most small businesses. The smaller home-based solo-entrepreneurial business owner can probably manage on their own in the early stages. Technical skills may be important to a computer repair business, culinary expertise to a restaurant in an upmarket area, and selling skills to a fast-moving product business. It’s too easy to say hire the best to a start-up – but the cost of not doing so can be high. Try to hire the best you possibly can. Make sure you are transparent about the start-up stage of your business because good prospective employees won’t fall for flimsy, hyped stories in these economic times. Tell a confidently optimistic but realistic story to prospective hires and you will increase your odds of gaining their trust.
Protecting your business idea
When you begin selling and marketing you may find that competitors will eye your product or service, especially if it looks lucrative to them. It’s easy for a competitor to take your product, re-engineer or redesign it and make a knock off of it. To prevent copying you will need to think about protecting your product or service through copyright, patents or trademarks. We’ll look at this in more detail in a subsequent blog post but if you are concerned consult with a lawyer.
Preparation, coming up with a plan before you introduce your product on the market is an important step. It will give your product or service a better fighting chance. A high percentage of start-up businesses quickly go bust so you need a clear roadmap to help beat the odds when you launch your new venture.
Although entrepreneurs are supposed to be wildly creative, spontaneous and big risk takers, the smart ones carefully explore their production, development, distribution and marketing costs associated with their new venture. They know what they are doing when they have to quickly make adjustments which often means the difference between failure and success.