Deciding on What type of Business to open When deciding on what type of business to open, you should ask your self the following questions: * Is this something that I have the skills & ability to do? * Why do I want to open this particular business? * How high is the demand for the product(s) that I will be offering?
What is the average profit margin for businesses in this market?
* What is the failure rate of businesses in this market, and why?
Who are Your Customers? Knowing who your customers are is a key part of understanding your business. You should learn as much as you can about your customers as possible. The following is some very important information that you should gather about people who purchase the type of product(s) that you plan to offer:
Competitors Most small businesses compete with several other businesses. Including those businesses that don’t look like theirs. For example, a hardware store can be in competition with a department store, or a convenience store may compete with a gas station for staple items. A small business owner must know who sells the same products that he/she sells. Businesses are also in competition with other businesses that sell substitute products. For example, hamburger can be a substitute for a steak dinner. All types of restaurants are in competition with one another virtually all the time. In another example, various modes of transportation. People make choices on how they want to travel; by plane, bus car, motorcycle, or bicycle.
Business Location Where do you think would be the best location for opening your small business? Most people would say where there is no other business who offer a product(s) that I plan to offer. Surprisingly just the opposite is true. Small businesses operate best when there are several other businesses that offer the same products that they do. This is called “Perfect Competition”. How often do you shop at a store that is not surrounded by other stores that sell the same product(s) that you are looking for. Shopping malls are very good examples of perfect competition. The following are is very important information you should know deciding on a location for your business. Cost of homes in the area; crime rate, amount of traffic at location intersection; and the number of competitors in the area.
Marketing Plan: Bringing the Customer in The main objective of marketing your business is to bring customers in to your business to make purchases. It would be a mistake to assume that people will shop at your business just because you are open for business; they have to know that you are open and have the product(s) that they want, need, or desire. There are several methods that you may use in combination or alone to get people to patronize your business:
* Hand bills and other hand delivered circulars
Financing Your Business You would need a certain amount of money to finance your small business endeavor. You can use your own cash, but most people find it necessary to take out a small business loan. However, small business loans are usually acquired from the Small Business Administration. In order to apply for one of these loans, all of the previous information that was just discussed would have to be gathered, in addition to a financial statement from the borrower. That is, you would have to prove to a bank of your choice that you are qualified for a small business loan. The most important information that you will in your application for a loan is;