Start Your Own Business (14 page)
Read Start Your Own Business Online
Authors: Inc The Staff of Entrepreneur Media
6.
Test
. Once you have a match between niche and product, testmarket it. “Give people an opportunity to buy your product or service—not just theoretically but actually putting it out there,” suggests Falkenstein. This can be done by offering samples, such as a free miniseminar or a sample copy of your newsletter. The test shouldn’t cost you a lot of money: “If you spend huge amounts of money on the initial market test, you are probably doing it wrong,” she says.
7.
Go for it!
It’s time to implement your idea. For many entrepreneurs, this is the most difficult stage. But fear not: If you did your homework, entering the market will be a calculated risk, not just a gamble.“If you work just for
the money, you’ll never
make it, but if you love
what you’re doing and
you always put the customer
first, success will
be yours.”—RAY KROC, FOUNDER OF
MCDONALD’S CORP.
Once your niche is established and well-received by your market, you may be tempted to rest on your laurels. Not a good idea, says Falkenstein. “[You must] keep growing by reniching. This doesn’t mean totally changing your focus, but rather further adapting it to the environment around you.”
Ask yourself the following questions when you think you have found your niche—and ask them again every six months or so to make sure your niche is still on target:
• Who are your target clients?
• Who aren’t your target clients?
• Do you refuse certain kinds of business if it falls outside your niche?
• What do clients think you stand for?
• Is your niche in a constant state of evolution?
• Does your niche offer what prospective customers want?
• Do you have a plan and delivery system that effectively conveys the need for your niche to the right market?
• Can you confidently predict the life cycle of your niche?
• How can your niche be expanded into a variety of products or services that act as profit centers?
• Do you have a sense of passion and focused energy with respect to your niche?
• Does your niche feel comfortable and natural?
• How will pursuing your niche contribute to achieving the goals you have set for your business?
According to Falkenstein, “Creating a niche is the difference between being in business and not being in business. It’s the difference between surviving and thriving, between simply liking what you do and the joy of success.”
On a MissionOnce you have designed a niche for your business, you’re ready to create a mission statement. A key tool that can be as important as your business plan, a mission statement captures, in a few succinct sentences, the essence of your business’s goals and the philosophies underlying them. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community.
The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community.
“Mission statements help clarify what business you are in, your goals and your objectives,” says Rhonda Abrams, author of
The Successful Business Plan: Secrets and Strategies
.
The Successful Business Plan: Secrets and Strategies
.
Your mission statement should reflect your business’ special niche. However, studying other companies’ statements can fuel your creativity. One sample mission statement Abrams developed:
AAA Inc. is a spunky, imaginative food products and service company aimed at offering high-quality, moderately priced, occasionally unusual foods using only natural ingredients. We view ourselves as
partners with our customers, our employees, our community and our environment. We aim to become a regionally recognized brand name, capitalizing on the sustained interest in Southwestern and Mexican food. Our goal is moderate growth, annual profitability and maintaining our sense of humor.
PROFITING FROM PROCUREMENTL
ooking for a niche? One market many entrepreneurs ignore is the lucrative procurement pie. Although the federal government is by far the biggest customer in this arena, local governments, colleges and universities, school districts, nonprofit organizations, public utilities and corporations also have plenty of procurement opportunities available. The federal government’s civilian agencies alone buy products in more than 4,000 categories, ranging from air brakes to zippers.Contrary to what you might imagine, small businesses often have an edge in competing for procurement dollars. Government rules and regulations are designed to promote fair competition and a level playing field. And government agencies and large contractors are often required by law to give a certain amount of business to small, disadvantaged, womenowned or minority-owned businesses.How to get started?• Check out the SBA’s subcontracting opportunities at
web.sba.gov/subnet
.• Agencies like the U.S. Postal Service, Department of Interior and the Army, as well as many others, send out solicitations to businesses that are on their mailing lists. To find out how to get on the lists, contact the agency you’re interested in.• Regularly check “Federal Business Opportunities” online for daily updates (fedbizopps.gov); printed versions can also be found at many local libraries.If you are a woman or a member of a minority group, you will need to be certified as a woman- or minority-owned business to work with government agencies and many large contractors. This can be done in several ways. Many cities have their own certification programs or can direct you to the certification programs that they accept. A good general place to start is with the SBA; you can reach them at 409 Third St. SW, Washington, DC 20416, or call (800) U-ASK-SBA.
Or consider the statement one entrepreneur developed for her consulting business: “ABC Enterprises is a company devoted to developing human potential. Our mission is to help people create innovative solutions and make informed choices to improve their lives. We motivate and encourage others to achieve personal and professional fulfillment. Our motto is: Together, we believe that the best in each of us enriches all of us.”
TIPDoing business with the government can seem intimidating because of all the paperwork. To make it easier, many government agencies are reaching out to teach small firms how to bid—and win. Every state provides some kind of training, usually sponsored through community colleges for a small fee. Check with your local community college or SBA district office for details.
To come up with a statement that encompasses all the major elements of your business, start with the right questions. Business plan consultants say the most important question is, What business are you in? Since you have already gone through the steps of creating your niche, answering this question should be easy for you.
Answering the following ten questions will help you to create a verbal picture of your business’s mission:
Putting It All Together1.
Why are you in business?
What do you want for yourself, your family and your customers?Think about the spark that ignited your decision to start a business. What will keep it burning?
2.
Who are your customers?
What can you do for them that will enrich their lives and contribute to their success—now and in the future?
3.
What image of your business do you want to convey?
Customers, suppliers, employees and the public will all have perceptions of your company. How will you create the desired picture?
4.
What is the nature of your products and services?
What factors determine pricing and quality? Consider how these relate to the reasons for your business’s existence. How will all this change over time?
5.
What level of service do you provide?
Most companies believe they offer “the best service available,” but do your customers agree? Don’t be vague; define what makes your service so extraordinary.
6.
What roles do you and your employees play?
Wise captains develop a leadership style that organizes, challenges and recognizes employees.
7.
What kind of relationships will you maintain with suppliers?
Every business is in partnership with its suppliers. When you succeed, so do they.
8.
How do you differ from competitors?
Many entrepreneurs forget they are pursuing the same dollars as their competitors. What do you do better, cheaper or faster than competitors? How can you use competitors’ weaknesses to your advantage?
9.
How will you use technology, capital, processes, products and services to reach your goals?
A description of your strategy will keep your energies focused on your goals.
10.
What underlying philosophies or values guided your responses to the previous questions?
Some businesses choose to list these separately. Writing them down clarifies the “why” behind your mission.
Crafting a mission statement requires time, thought and planning. However, the effort is well worth it. In fact, most startup entrepreneurs discover that the process of crafting the mission statement is as beneficial as the final statement itself. Going through the process will help you solidify the reasons for what you are doing and clarify the motivations behind your business.
TIPWhen it comes to mission statements, employees are number one. It’s more important to communicate your mission statement to employees than to your customers. The most effective mission statements are developed strictly for internal communication and discussion. In other words, your mission statement doesn’t have to be clever or catchy—just accurate.
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