Ever thought of starting a business? Perhaps a dream side hustle you’ve toyed with or an interesting hobby turned profitable business? Starting a successful business is not a flook or stroke of luck. A successful business finds its market in a window of opportunity driven by the passion of its owners. There are plenty of keynote speakers, podcasts and blogs out there that claim to be foolproof guides on how to start a business or how to make a business plan, but unfortunately many of those have a ridiculous amount of topics that can leave you discouraged and falling asleep. 

That’s why we’ve created a 6 topic guide to help you, even if you want to learn how to start a small business or how to start an online business. Each topic has its own bite-sized blog post, no crazy whitepapers to keep you up at night. If you still need more help with a certain step, subscribe on our website to receive a free copy of our detailed guide with examples, or reach out for direct support. After all, you don’t want to end up like the 23% of new Canadian businesses (with 1-4 employees) that fail within the first 3 years of operation. In this first blog post, we’ll discuss the basics of how to start a business and the questions you should be asking yourself.

Why is my product or service different?

Knowing the answer to this question will help you differentiate your business from the competition or seize a window of opportunity in a new market. In the long run, it will save you from searching, ‘Why is my product not selling’ on Google. When you sell a product or service you are not just selling a tangible product/service. You are also selling an offer of intangible values. Those intangible values could be saving time/money, enabling a function, convenience, quality, customization, durability, lower risk, better health, aesthetics, status, environmental benefits, and so on. The values are specific to the product, service or experience you are offering. For example, Uber offers convenience and saving time.

Understanding your product/service’s strengths will allow you to market to the right customers, while understanding your product/service’s weaknesses will allow you to build around them or strengthen them. That brings us to the famed SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats. By using a SWOT analysis you can grasp the internal and external factors that will play an integral role in your business’ growth. We’ve attached a free template you can download and print at the bottom of this page.

Who are my customers?

After you’ve performed a SWOT analysis and understand your product/service’s value offering, you will be able to determine your target market customers. Will your business be selling your product/service to other businesses (B2B) or to consumers (B2C)? It is important to distinguish if your business is B2B or B2C in order to effectively market toward them. Where a business shops for solutions is different from where a consumer shops for solutions. A business is more likely to seek sales proposals from a few suppliers, whereas a consumer is more likely to search and evaluate alternatives in marketplaces both online and in-person. 

Once you decide if your business is B2C or B2B you can further segment the market. Segmenting your market is important because not all customers are alike hence mass marketing is not effective. Customers have different subgroups with wants and needs. Addressing these wants and needs is more effective than mass marketing. Segment your B2C market into: geographic, demographic, psychographic, behavioural; or segment your B2B market into: demographic, operating variables, purchasing approaches, situational factors, personal characteristics. Once you have segmented your market, you can select an appropriate target marketing strategy. For example, Lululemon, a B2C fitness clothing store, has a key market segment toward young women, in their teens to early thirties, in the upper and middle classes.

How much should I sell for?

Decisions, decisions… should you sell your product/service the same as your competition? Perhaps discounted? Well that’s all jumping ahead. The first question you need to ask yourself is how much do you need to sell your product/service to break even. Otherwise if you don’t break even, you’ll be selling at a loss. Look at your expenses — how much does it cost you to create just one of that product/service? Not just the items used up for that product/service, but also rent, utilities, postage, etc. Once you know this cost, it becomes the minimum price you can sell your product at. We will discuss pricing more in depth in a later post, but if you’d like to learn more about profit check out this post.

Now let’s take a look at your competition’s pricing, both physical and online channels. How much are they selling their product/service for? Are they offering more or less features than your product/service? By comparing your offering to their offerings, you can determine an appropriate price for your product/service and a pricing tactic. There are several pricing tactics to choose from, the most commonly used are product line pricing (i.e. clothing), captive pricing (i.e. toner and printer), and price bundling (i.e. TV and internet).

Where can I sell my product or service?

Now that you know what your product/service is truly offering, your customers and the pricing, let’s talk about where it can be sold A.K.A. channels! Thanks to technology your product/service can be sold online on your website or third-party website, at your own venue or third-party venues, or even a combination. Don’t forget that where you sell your product/service may come with additional fees, especially if you’re selling with a third party. Obviously, the most important decision on where to sell your product/service is your customer! Which channels do your customers have access to? Make your product/service discoverable and accessible so that they can find it. Where are your competitors selling? How can you access more of your customer market?

What resources will I need?

Resources all vary depending on what you’re selling. Chances are if you’re just starting up you don’t have the funds to hire a team of employees, but chances are you don’t need to. Most businesses start as side hustles run by the owners from start to finish. Maybe you can handle the load now and down the line if business picks up, you can hire a small team to assist you, even part time. Also, keep in mind supplies that you will need for a product are different from supplies for a service, and replenishment will depend on usage. Funding as well is an essential resource needed by every business. In the earlier stages you will likely find yourself investing your own money in your business, which you can call a loan and eventually pay it back when your business is thriving. There are other ways of getting funding including grants, bursaries, loans, angel investors, etc, but we’ll talk more about funding in a later post.

What now?

For now, baby steps. You’ve already taken the first step by searching how to start a business. Now follow through by making notes about the above sections and doing your research sooner rather than later. Trust us, it will pay off to be prepared. Don’t forget the free SWOT analysis template that can be downloaded below. Next week, we’ll dive more in depth on the one thing a business can’t buy: customers. If you need help or have any questions feel free to contact us. At Chartd, we help small businesses thrive, not just survive. Hit that subscribe button below to receive our detailed guide as soon as we release it.

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