Some of the entrepreneurs start out after developing a new product that they
think will be successful. However, many aspiring entrepreneurs do not know how
to transform their product from an idea into a successful business.
(article continued below ...)
If you are a would-be small manufacturer, here are some considerations you
need to take when starting a business:
1. Check
your idea.
Before plunging head-on to your entrepreneurial venture, your first step should
be to ascertain the viability of your business. After developing the product,
check your potential competitors in the market, both direct and indirect. If
you have created a unique Mexican sauce, for example, you need to check out
your indirect competitors including makers of other Mexican sauces. How will
your sauce be used and what food products go along with it? Why will people use
your sauce? It's one thing to have a good idea, and another to create a demand
for your idea.
2. Check
the market for your product.
You may have a great product, but are you in the right market? You may have a
great idea for winter gear, but if you live in sunny California, you may have
little demand for your product. How will you reach your market? What are the
buying behaviors of your consumers? How many of your products do they buy in a
month? Or is your product seasonal? If so, how will you survive the lull
season? Your market (perhaps you could open an online store instead of a retail
store) will define your distribution mechanism, pricing structure, and other
business variables.
3. Know
your legal structure.
Your legal structure will depend on the liability you are willing to
take, the number of investors, the tax structure, etc. If you are
1-person business, you may start out as sole proprietorship. But if you
have partners or investors, you can either start a partnership, LLC or
corporation. Learn the pros and cons of each structure and pick one that
is most suited to your circumstances.
4.
Availability of financing.
Even w/ a great idea & a ready market, you are bound to fail if you
do not have adequate capital. Know your manufacturing & operational,
& other start-up expenses. Determine where you will get the money -
from your savings, relatives and family, friends, bank, angel investors,
or SBA. If you are planning to invite partners to the venture, clarify
the roles and responsibilities of each and make sure that all agreements
are made in writing
5. Plan out
your operations. Look
for suppliers & distributors. Identify where you can get your
ingredients and raw materials. Think how the packaging will be done;
many great new products languish in store shelves because of poor
packaging. How well your product or service is presented will determine
the initial consumer acceptance or rejection. Determine where and how
you will sell the product. A specialty product, for example, must not be
overly distributed as it could lose its perception as a specialty good.
A mass-market product, on the other hand, must be distributed with
consumer convenience as the prime consideration.
6. Develop
your marketing program.
How will you move your product? How will people know that your product
exists? You need to think how you will market & promote your
product. Will you advertise in a publication that reaches your market?
How much will that cost? Your marketing strategy should be based on how
your product will reach and affect your target market. Your product must
be designed and marketed to clearly demonstrate how it will satisfy an
unsatisfied need.
7. Write a
business plan. After
doing steps 1-6, you will have enough information to help you need to
write a business plan. This is essential as it helps you think through
your business and what you really need to do. If you are looking for
investors, they will also want to see your business plan.
8. Know the
zoning regulations, if
you are planning to do your business at home. Some counties may have
limitations on what you can do inside your house for commercial
purposes. Zoning considerations usually include the amount of traffic,
disturbance levels, and safety considerations. Take this time to check
out the licenses and permits that your business may require. If you will
be selling food products, consult your government's food administration
office.
(article continued below ...)
9. Initiate
the business registration process. Depending
on the complexity of your legal structure, you may need to consult a
lawyer. After you have filed your business registration and fictitious
name, open a separate bank account for your business. You may also need
to get an Employer Identification Number.
10. Get
insurance to protect
your property from damage, theft or other unforeseen circumstances. Risk
and entrepreneurship always go hand-in-hand, and your goal is to
minimize your risks. However, beware of "overprotection" or
getting too much insurance for your business. The rule of thumb is to
carry insurance only on what the business cannot afford to cover in the
event of misfortune.
11. Protect
your product. If you
created an original Mexican sauce or a new thermal system for mittens,
protect it with patents. It may be expensive and time consuming, but it
reduces the risk of someone else claiming your product as their own.
12. Get
your business cards ready,
as well as brochures, stationary and other business forms. If you are
planning to promote your product on the Web, start creating your online
presence.
You're now ready to open your business! Set a starting date, and plan
out this event. You may send press releases to local newspapers about
your great new sauce. You can take this opportunity to spread the word
about your business.
Starting a business is not easy as 1-2-3. There will be a lot of
challenges along the way. But if you believe in yourself and in your
product, you will go a long way.
| 
