Many of you have at one time or another considered starting your own business or launching a product line. After all, with your extensive experience working at different companies and your knowledge of this industry, you should be able to make it on your own, right?
Before you make the jump of leaving a secure job with a steady paycheck every week, step back and consider the following four points. If you feel confident on each of these fronts, you’ll have what it takes to become a successful business owner.
Most businesses fail because they don’t have a good grasp of the finances needed to sustain the business until there is a positive cash flow. My advice:
- Put together a budget that lists the various expenses such as investments in R&D, manufacturing, sales and marketing. Included in such analysis should be a timeline with specific goals to be attained. Goals without timelines are just dreams.
- Secure a line of credit from your local bank or your credit union. If these don’t work, investigate alternate ways of raising capital such as government business loans (SBA Funding), venture capitalists, angel investors or family members.
- Have sufficient capital to cover anticipated expenses before your begin your project.
2. Marketing Message
Often overlooked is the business proposition. What is it that you’re offering, and how does it fill an unmet need in the market? My advice:
- Ask yourself these questions – Why would someone want to buy my product? What am I offering that my competition cannot? Customers don’t care about the technology you use, if there is no recognizable advantage. They are more interested in the end benefits your product provides and whether or not it solves a problem they have.
- Create a marketing plan that focuses on your customer.
3. Pricing and Selling
Pricing is a market driven decision based on your product’s niche. Where and how you market also influences the final price. My advice:
- Don’t ask too much or too little, as they both can hurt.
- Price your product so that you have a decent profit margin based on the value you deliver. For consumer products, it can range from 50-70%.
4. The Technical Stuff
Last but not least, pay attention to your product formulation. My advice:
- Check your formula for raw material incompatibilities, performance, product and package stability, including ship tests, preservation, patent infringements safety, and finished goods specification, etc.
- Check your label copy to see if it is compliant with regulations and if the claims are substantiated.
This is just a partial list of items to be considered before your launch. If it feels overwhelming, keep sight of your dream, and don’t get discouraged. Working for yourself and your family can be very rewarding. Your success is in your hands. Make the best of it!
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