While it is tempting to just leap into a new business because of it’s exciting possibilities, a few key planning points will vastly increase your chances of success. These steps aren’t difficult, but they’re easy to skip. Many businesses ultimately depend on a slim profit margin, so planning can really help the process. Too many restaurant patrons, for instance, assume that running a restaurant seems fun because of the many restaurants they have visited, but restaurants have an especially high failure rate.
One of the key factors in planning a business model is simply researching the demand for your product. If you are great at making kitty blankets, for instance, it’s worth checking out to see if there is a market for it. The entrepreneur may find that there are three times as many potential customers for dog blankets, and by simply adding dogs to your marketing strategy, you will increase your sales four times over. This fact would be an important one to know before all the labels, website promotion, and branding was done with the words “Kitty” instead of “Pet”!
Supply is worth researching, too. Keeping with the pet blanket approach, you may find that there are tons of different blankets available, but none that have catnip in them. Marketing two types of blankets, one for dogs and one for cats, and placing catnip in the cat blankets may dramatically increase sales. Again, this type of research is much more helpful to have before any product has been made. It would be a shame to have a room full of single-ply cat blankets that will not hold any catnip, when that is the product that is a unique niche. The brand name needs a lot of thought because once the name is out in the market, it can be very difficult to change. Picking a name, and then finding out six months later that the name is confusingly similar to a competitors would be disastrous. Finding out that the name is easily mis-spelled, hard to pronounce, or difficult to remember are all pitfalls that could have been avoided with proper planning. Apologie Clothing is now finding that web surfers are having difficulty remembering the odd spelling of their name when searching for their website, and the marketing campaign of Chevrolet Nova in Mexico failed dramatically (“no va” means “does not go” in Spanish).
Most entrepreneurs are surprised to find that once their business is successful, much more time is taken up running the business than in actually providing the service or making the product. The architect who starts his own architecture firm finds that he’s only drawing 1 hour a day – the rest is spent meeting with clients, interviewing, marketing, planning, etc. Skills such as salesmanship can be learned through courses, techniques such as accounting can be found in books, and software and outsourcing can help with payroll. But proper planning will help considerably. If a bookkeeping system is set up ahead of time, linked to the accounting software and interfacing with a business account at your local bank, this set up will save huge headaches in the future.