Welcome back future business owners!
Last time, we looked at several of the considerations you’d be faced with in determining whether your idea is viable and set up for long term success. Let’s dig a little deeper into some more considerations this time around.
Can I explain to someone how I can help them?
In order for someone to want to turn over their hard earned money to you, you have better be able to convince them why doing so would enhance their life. For example, if you wanted to take a cool trip somewhere, even for only a couple of days, you might come on our website and check out our Shop Section, in which we offer (or will be offering), some cool travel services designed to enhance your experience and make your life smoother and your trip more enjoyable. Before you click the buy button, we have to be able to prove to you that we know what we’re talking about, that we have a wealth of knowledge about traveling, and because of that, we can significantly enhance your experience as well. Here are some tips to getting this area of your business organized.
Write down, in one sentence, what your top priority in offering your service is. Again, using ourselves as an example, it might be something like “To share our experience of travel, business and life with others in order to enhance their enjoyment of those things through images, inspiration and information.” We’ve got a what, and a why and a how, in one simple sentence. Try it out yourself.
Is my service offering too broad or too narrow? For example, offering landscaping services within a 1 mile radius, to yards of one half of an acre or less, is not going to get much business. On the other hand, offering a full range of landscaping services from gardening to construction sites within 200 miles, its probably doomed for failure too.
Can I explain to someone why it is worth the specific price I’d be asking in exchange for the service? Do I have competitive and market data to back up my assertions?
Have I considered the time and cost factors?
Many people, when building businesses, start off doing it as a side job. A hobby, or just something they do after work or on the weekends to build up an extra source of income. This is a great way to start, particularly with an online retail store, but service businesses can be a little trickier in this regard. Here are some things to consider when deciding whether to quit your job cold turkey and launch out, or try to build it slowly until it is established enough for you to be able to support yourself.
How much do I want to make from this business? What kind of income replacement do I need to have? How many customers does that mean I will need to acquire?
Can the service be offered during non-business hours, and is there enough opportunity to solicit customers during these same times?
Do I have the cash reserves to pay myself while I start building a customer base?
Is my business plan written in phases - both for growth as a part time job, and what it would look like as a full time venture? Have I fully accounted for all the costs of both paths?
What is going to be the cost in terms of time and money in reaching potential customers?
Do I have a fully functional business plan?
While this is important in a retail and service business alike, it is particularly useful to have a solid business plan for a service business. If your retail business goes south, your inventory still has value, and you can generally recoup a lot of the costs. If nobody is buying your service, your overhead costs remain the same while no cash is coming in. This can be a real challenge for people who have a hard time managing money. Here are some considerations to really focus on when developing a plan - especially in terms of marketing and customer acquisition.
What are the specific outlets I am going to use to try and reach customers. What medium on those outlets am I going to use? (Voice, Graphics, Print, Video, etc.)
What are my competitors doing to reach customers and how much are they charging? What are some of their strong points and how do I plan to offer something similar or better?
How many customers do I need to break even, and at what price point for my core services?
Have I fully delved into the demographics in the target market I am trying to reach, to determine if it is already saturated, or there are ample opportunities there?
Do I have a full plain detailing of all the ways I can attempt to reach customers at little to no cost as I start up?
Now get going!
Hopefully by now you’ve gone through and answered most of the questions in this two part series, and have a much better idea of what it is going to take to get your service set up and to start generating profits. Remember, this is not a race - take it slow, but give it your all. Remember, it may be beneficial at first to get a few great customers at a very low / no profit price just to get the experience and build up a base. Some days will be amazing, some days you’ll want to give up completely, but keep at it if you believe in what you are doing. Now, get out there and get to it!
Until next time,
BEN