Q: I'm thinking about starting a small business based on my 20 years of management experience in the software industry. After some research, I've determined that there are three key things I need for starting a small business successfully: good contacts, strong expertise in my field and enough money to get the small business off the ground. I've got all of this lined up, but I still have one major question that I can't answer – what product or service should I sell? My options include consulting with companies on their software or hardware needs, programming and systems analysis, or developing software for a specific use. Right now, I'm a budding entrepreneur with lots of ideas, but no focus. What other steps should I take to help decide what my small business should be?
A: When it comes to deciding what kind of small business you'd like to start, there are three critical questions you need to answer:
- What would you most enjoy doing?
- Who is your market?
- What products and services are needed to fill a need that isn't currently being met?
While making a profit by providing a needed service or product is the goal of any small business, your first priority should be picking an area that interests you. Before you extensively research target markets and product or service gaps, remember that starting a small business only ever works when you're doing something that you truly enjoy. Otherwise you'll never have the focus and passion necessary to get your business off the ground.
Once you've decided what kind of field will most interest you, it's time to take some serious steps to starting a small business. You'll need to make decisions not just about the type of product or service you will sell, but what kind of small business you want to start as well. Do you want to keep things small or grow as much as possible? Do you want to make just enough for a comfortable retirement, or do you want to get rich? To map out the proper steps to starting the kind of small business you want, ask yourself the following 15 questions:
- Do you want to start a small business that produces a product?
- Would you prefer giving advice to other companies on a project-by-project basis?
- Do you want to manage people and be responsible for the jobs of employees?
- Would you rather be concerned with only your own job performance and financial security?
- Would you prefer to interact with in-house people, or does heavy involvement with clients' businesses sound more exciting?
- Do you want a long-term commitment to developing a line of products for your target market?
- Would you like to spend three to six months of concentrated time on a project, then move on to something new?
- How willing are you to travel?
- What size organization would be comfortable for you to manage?
- How much financial risk are you willing to take?
- What are your income goals?
- What market, products, and services interest you the most?
- Picture yourself in a meeting with a typical customer. What is he or she like?
- Describe your personal mission. Do you want to break new ground, help people, make lots of money, or be known as the best or biggest in the industry?
- Do you need to have final decision power over whether your ideas are implemented?
When you have carefully considered and answered these questions, you should be able to better determine the type of product or service you want to sell, and what goals you should have for developing your company. And once you've taken these initial steps to starting a small business, you'll be ready to move ahead and make your dream a reality.