We’ve all had one. Remember that time you smacked your forehead and yelled “Ah-Ha!” That was the moment inspiration struck and you found yourself mulling over a great business idea.
You’re sure this idea is a great one. One in which you’ll make money and change your life. Your certain things will work out because suddenly you’ve got all this energy and passion you want to put into this new idea. If only you felt this excited about your 9-5 job!
After the initial excitement wears off you’ve got to figure out how to turn this spectacular idea into a full-fledged business. The task can seem daunting if you’re a first time entrepreneur. Fear not though, there are six steps every entrepreneur needs to take on their road to becoming a business owner. Just follow this path to success…
1. Will it sell?
All successful businesses have at their core, products or services that solve problems. If yours does that, then you’ll be successful too.
When you first come up with your idea, you are so excited about it. You probably can’t see any of its flaws. But you have to ask yourself what specific solution does it provide for consumers? What problem does is solve? Try to look at your product/service/business from an unbiased standpoint and examine it from all angles.
When I started Wealth Authority I knew I wanted to help people start their own internet based businesses. There was an opening in this market for a business to come in and give practical advice (in the form of this weekly letter) and offer legitimate products to get you started. Wealth Authority provided the solution to entrepreneurs like you who wished to become their own boss and run their own internet based businesses.
2. Can I sell it for enough money to make a profit?
The next thing you need to determine is whether or not your new business endeavor will sell for enough money for you to generate a profit. Let’s say your research finds that your competition sells their product for $20 a pop, but the materials you use and the costs you’ve generated so far necessitate you sell your version for $30 a pop. That’s not going to work then. You won’t make money unless you can sell your product at a price which generates a nice profit for you.
Before you invest your life savings into producing your first product, just to find out you can’t sell it for a profit, do your homework. To determine if you can create a product and sell it at a price where you can make money contact manufacturers and get some quotes to make your product. Find out how long it would take to produce your idea into a physical product and how much it would cost to make it.
You should also consider other costs you need to cover like how much money you’ve sunk into the website or how much your monthly store rent is, how much money you need to make each month to stay afloat, any equipment costs you’ve run into so far, etc. Once you’ve calculated your business costs then you can determine your breakeven point. That is the point in which you’ve sold enough units to cover your costs. Anything above that number equals profits.
3. Who will I sell it to?
Picture who your ideal consumer is; this step will help you focus and narrow down your target market. Determine such factors as age, income level, geographic location, and skill level. Is your target market shrinking or growing?
If your initial reaction to this question is, “Everyone will want my product/service,” then stop everything you are doing and go back to the drawing board. No product is truly universal. Plus how can you afford to market your product to the entire world? It costs a lot of money to advertise to 6 billion people.
Every new product or idea I come up with for Wealth Authority has gone through this process. I determine who is the ideal candidate for the product/service I plan to create. I address whether it’s for a newbie, someone who is just entering the market, or if it’s more suited for someone who already has an internet business and is just looking to extend their product line.
I also have to determine if the product can support a higher price tag or if it needs to be on the lower end of the price scale. Those are two totally different products, for two totally different consumers.
Go through all the factors and determine who your ideal customer is. This is helpful too in that fact that it helps you figure out your future marketing plans.
4. How will you get the word out about your product/service?
Having a great idea for a product/service is not enough. You can have a revolutionary product, but if no one knows about it how will they buy it from you. For your new business to be a success, you’ve got to get the word out.
In this day and age, every business needs a website. Definitely plan to market your new business venture on the internet. Once you figure out your ideal customer, rent buyer lists from other companies that sell products/services similar to yours and promote your product that way.
Also consider producing advertisements and placing them on other websites to market your business. You should also look into Google Adwords to drive traffic to your website and get the word out that way.
There are hundreds of other marketing channels out there. You need to determine what’s right for your audience. For example, research has shown that older audiences respond better to marketing pieces they receive in the mail versus in their email box. If baby boomers are your target audience you may consider doing some direct mail to promote your product.
Obviously, I strongly believe in the power of internet marketing. You must too or you wouldn’t be a part of the Wealth Authority group. It is most often the cheapest way to promote a business and bring in new customers. I highly recommend The Hidden Secrets to Internet Wealth DVD. It tells you all about how to get started marketing online.
5. What will it cost to get the word out? Figure out your source of capital.
Money makes the world go round. No matter what business you start, you are going to need some of it to get your new business venture off the ground.
There are many different places to get funding; self-funding, loans from family and friends, investors, bank loans, credit card advances or a venture capitalist. Each has their pluses and minuses.
I always urge new entrepreneurs to start small. Produce only a few copies of your product or take on only one or two clients for your new service. Doing it this way will give you a feel for whether or not your new venture is going to work, but it also allows you to start with a lot smaller investment. This way you won’t end up with an empty bank account and a garage full of products you can’t sell.
6. What will your next move be?
One product/service will not build a business. One product is a start.
While determining the viability of your first venture into the market, brainstorm what your next move will be. Come up with a few ideas to extend your product line when the time is right.
The second one is always easier and faster than the first because you’ve got manufacturers in place, shipping methods figured out, marketing channels researched, etc. You’ll be ready for your next step a lot quicker than you think.
Always keep moving forward. The long term success of your business will depend on your ability to stay current and offer new, innovative solutions to your customers.
Good luck!
Ethan Warrick
