Small Business Start Up Tips
Enterprising individuals start small businesses all the time. They think of an idea or product, then market it. However, it takes more than just a good idea to sustain a business. According to the article "The Seven Pitfalls Of Business Failure" at businessknowhow.com, Small Business Administration statistics show that 66 percent of small businesses do not make it past their fourth year. Small business owners who want to survive must research their ideas and plan their business strategies in advance.
Define Your Market
People start small businesses to satisfy a need or solve a problem. Hence, your market would be any customer who would potentially benefit from your product or service. Before you go into business, define your market. Determine the key demographic groups like age or income that would most likely purchase your products. Also, study who the major competitors are in your market, what their market share is, and how much sales potential there is in the market for new businesses. There are plenty of secondary research sources available like Nielsen or Forrester Research (see Resources) that supply industry information.
Differentiate Your Business from Competitors
Choose a particular segment of the market and target it. Do not just try to appeal to everyone. Small businesses that survive identify and serve certain segments of the market. For example, you might have exceptional technology capabilities and choose to be a quality leader. Consequently, your products probably will be priced higher and appeal to customers with higher incomes. Your products will not likely appeal to people who are price sensitive. As a company, focus on your core strengths, like technology, then use that strength to your advantage.
Develop a Thorough Business Plan
A business plan is the blueprint for your business. Your business plan should include, in detail, how you will finance, advertise and manage your business, according to the Small Business Administration. You also should include detailed information about your competition, such as strengths and weaknesses, market share data, and strategies on which competitors' customers you will go after to increase your own sales. Create a three-year forecast of sales for your business, then determine when you expect your business to turn a profit.
Conduct Ongoing Marketing Research
Do not just conduct occasional market research. Procure feedback from your customers on a regular basis. An example would be an ATU (awareness, trial and usage) study. ATU studies will enable you to track both your brand and advertising awareness as well as that of your competitors. For example, if your brand awareness increases significantly in a certain year, it indicates that people are becoming more aware of your products. Also, garner ongoing data on how satisfied your customers are about your product quality, customer service and prices.
As a small business owner, there are certain business licenses you will need, such as a DBA (doing business as) for paying sales taxes. Depending on the type of business you are in, you might need other licenses as well. It is best to hire an attorney experienced in corporate or business law early on so you are assured of having all licenses, or any legal documents for employees. It also will behoove you to hire a tax attorney and an accountant to assist you with all your tax obligations.
Disclaimer: Author is not connected or in somewhat related to the company
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Message edited by aipaoleen - Tuesday, 04 December 2012, 4:15 PM