The threat of new entrants is a constant and consistent one. You have the advantage in that your business is established, but that\'s no guarantee that a serious threat will not rise up to compete with you. In fact, it\'s pretty much assured that eventually somebody will either improve on your product, or they will find some new product that will supersede yours.
There are two ways to combat this threat. The first is to keep innovating. Don\'t sit on your laurels, no matter how good your business is doing. Continue to search out new ideas and new talent and take risks, or risk your business.
Secondly, establish a customer base. Keeping customer loyalty will be your best protection against the threat of new competitors. Always act in the interests of providing a quality product or service and you\'ll have a good, solid base when somebody eventually tries to woo them away from you.
You might want to consider franchising. A lot of young people, not ready to start working in the corporate world while things are still so volatile, are instead opening and running franchises of popular businesses. It lowers the risk that they run when they get in, but allows them enough freedom to operate themselves.
Another option is to start an internet-based business. With less overhead and a wider access to potential customers, it\'s sometimes easier to get started without corporate backing.
Finally, look into taking partners. You\'re not the only person struggling in this economy just out of school. Find people with similar interests and vision and start a business together.
The first place you should look is a good local library, usually a major city or a university one. They\'ll have a wealth of information about local business, free for you to find.
Next, find a good business consultant. We would like to humbly suggest speaking to the good people at EM Advisory Corp.
Finally, make an appointment to speak to the people at the local US Small Business Administration. They\'ll be able to help get you on the right track.
Trade shows are a really good way to start, where you\'ll get a chance to see demonstrations of all sorts of products from suppliers in your industry.
Another thing you may want to try is the Thomas Registry of Manufacturers, which can be found at your local major library or online at http://www.thomasnet.com/ . There you can look up suppliers by industry and geographic region to find the people best suited to your business.
That\'s not an easy question to answer. It depends on what your business is, how long you\'ve been running it, where it is now, what the demand is, and several other factors. The advantage to leasing, of course, is that you aren\'t sinking as much money into the location right now, but it leave you with no resale or salvage value.
Take some time to do a detailed cost analysis, especially with your financial planner. This is not an easy decision to make, and your best bet is to learn as much as you can about your specific situation before moving forward.
It very much depends on your business, but if you\'re running a small storefront in a local area, then location can be incredibly important.
What you need to consider when choosing a location is availability of your prospective clientele, their ability to access your establishment, the potential employee pool, and the number of competitors nearby. Be sure to be liberal in your definition of "competitor" when you\'re considering this. Just because you run a bakery doesn\'t mean the sports bar down the way won\'t be drawing people into large, filling meals and pouring lots of alcohol that could prevent them from taking advantage of your lovely Black & White cookies.
First, let us recommend that you consult an expert on this, as setting price levels can be a complicated process. However, just as a basic idea, prices are based on a few major considerations.
The first thing you need to consider is your direct costs (actual material costs), labor, and overhead (facilities, utilities, taxes, insurance, security, and general operating costs). When you add all of these things up, you have the break-even cost.
From that point, you have to determine what you\'d like your profit to be. Again, that is a very complicated decision, and we suggest talking to a financial adviser before settling on something.
There\'s no one way to develop and execute an effective marketing campaign, and it can change from location to location. The thing to remember is that your marketing campaign determines the presence your business will have in your area.
Your best bet is to actually contact your local SBA and ask them for advice for your area. They\'ll be able to tell you what people are looking for and how to be reach them.
Market potential in general boils down to a very basic formula. You figure out a customer profile (who you want to target with your marketing) and combine that with the geographic size you want to target (how many of those people are in that area). This is your general market potential.
To get a more specific marketing potential, you need to know also how many competitors you have and their strength in the market area. You can then estimate how much of their business you\'ll be able to take from them (we recommend being conservative on your estimates), and that will be the market potential of your business.
Marketing is much more than just advertising and selling. It involves learning about the market you want to sell to, understanding what they can afford, and how best to approach them. There are four basic aspects to marketing: product (description of what you’re selling), price (how much it costs), promotion (how you inform people of what you’re selling), and place (the distribution channels you use to get the product to the market). Keeping those in mind, you have a very basic concept of what is actually involved in marketing.
The first thing you should do is consult an accountant or financial planner as they will be able to answer your questions in much more detail than we can here.
That being said, at the very minimum, your records should show your tax returns, both federal and state, including income tax and Social Security, requests for credit from vendors or bank loans, and claims about the business in regards to selling it.
However, we suggest that you keep much more detailed records than this that include credits and debits for the day, payroll, etc. A professional financial planner can help you determine what you need for your specific business.
There\'s no way to anticipate your profits exactly before you actually make them, but there are ways to estimate them.
There are standards of comparison called "industry norms and ratios" that are used by businesses to figure out roughly how much a business should be making in an area. They\'re broken down by standard industry classification (SIC) code by assets and size, and you can look up the kind of business you\'re in in your area.
Several groups keep copies of these ratios, but you can usually find them at your local library or by contacting the SBA.
There are three things any loan officer is going to want to know: what you\'ll use the loan for, how much you want, and how will you repay it. These three things comprise the big question "Why should we give you money?"
Be ready with a smart, well organized business plan that outlines projected financial statements, as well as the name, location, and production facilities of the company. You\'ll also want to have in there your legal structure, marketing structure, business organization, and your qualifications to run this type of business, as well as the qualifications of key people in your prospective company.
A well-written business plan is a good beginning when it comes to looking for start-up capital. If you need help writing one, you can find an almost limitless number of templates online or hire somebody like the people at our sister site EM Advisory Corp to help you write it.
First, let me suggest that you work very closely with your financial adviser and accountant when making any decisions regarding the financial health of your business.
That being said, what you\'ll need as far as start-up capital begins with equipment and building needs such as lease, equipment rental and purchase, and upkeep on all of it for a year. Next you\'ll need enough for both fixed and variable operating costs, which include your salary as an owner, telecommunications (internet service, phone service), and money to repay your loans in the interim, among other things, again for at least a year.
Make sure when you\'re writing your business plan to work these costs out and talk with your accountant to help provide accurate estimates of what the variable costs will run.
Telecommunications can mean many things, but keep in mind that all small businesses share several common needs, specifically, the need to serve sales, purchases, financing, and operational functions. Your telecommunications option should be the one that best serves all of these functions. This covers things as simple as your long distance carrier to your internet provider and even fax machine. Only you can know what is most appropriate for your specific business in this regard, but think in terms of meeting the service needs listed above.