This article was written by Hillel Pitlik, SCORE Orange County Management Counselor
So you want to be your own boss! You’re sure you can do it better than Joe Schmoe down the street. You have a great product or process idea that will be worth a bundle. Or perhaps you feel you can make loads of money just based on the power of your personality and your strength of will and determination!
Any of the above is the force that stimulates us to try to go into business. Having an idea or a better way to do things is only the first step. “There are many a slip twixt the cup and the lip.” Many promising entrepreneurs learn, all too soon, the task of transforming an excellent idea into a profitable business is fraught with mountains and hills which must be overcome.
To carry out your plan you must consider the following factors that will impact the development of your business. Note the early steps in the process require realistic estimates of the issues listed below:
1. How many people will want one of your gadgets or your service? Obviously, if this is a large number, then you will have a good supply of potential customers and you would be advised to go to the next step. This is a good time to evaluate what if any competition you’ll be facing in the marketplace.
2. How easily will you be able to sell this idea or product and how much will Joe Public be willing to pay for it? This will no doubt be an educated guess. But the product of the number of potential customers and the selling price yield a guesstimate of the market potential. Now, as you move forward you should consider factors which will reduce these numbers, such as price competition, promotional discounts and other market pressures. Remember, the real world doesn’t always follow our greatest expectations.
3. What will it take in terms of commitment, time, dollars and assembling a team composed of the right kind of people to develop the idea to the point of placing the product or service on the market? Now you begin to realize some of the challenges that you face. The first being, does your personal life allow the commitment of time and money to bring your idea to fruition? Does your life partner agree with this adventure? Do you have the means to assemble the right team, acquire a suitable facility, raise the proper capital and the drive to take your business idea to success?
4. How will you reach your target market, the one you indicated exists in step 1? The cost of reaching the target market is your marketing/sales cost.
5. Do you envision taking this adventure from concept to manufacturing, through distribution and finally to sales? Or do you want or need to turn over one or more of these functions to other people or companies? Here you face the question of what is your role in the business and what is your job description?
If you have done your homework properly, you will be on your way to putting the groundwork in place for the creation of an effective roadmap for your business, more commonly known as “The Business Plan.” The reason for preparing this document is to establish what precise steps you must do to propel this business to success. Success is measured by the return on your investment which results in $’s in your pocket. You’ve been through the preliminary thinking, now comes the task of accomplishing what you set out to do, and exactly how you will do it.
In the process of preparing your Business Plan you must also convince yourself that the idea is truly worth the effort. When you’ve considered all the factors and are convinced you’ve got a winning idea on your hands, it’s time to roll the dice, pass Go, and proceed to collect $200!
Now, go for it!!!!