By Alisa Ahlstone Lewis
Read Alisa Ahlstone Lewis’ first post in this four part series, How to Start Your Own Business: Identify “Your Big Idea.”
After you’ve identified your business idea, think long and hard about what your financial goals are. Are you trying to earn a little extra cash so you can dash off to Neiman Marcus and not have to hide your bags when you get home? Or enough money to pay for your children’s education? Or to quit your day job entirely? Of course we’d all love to start a company that we ultimately sell for millions of dollars, pay off our mortgage and travel around the globe, but we also need to be realistic.
Think about the financial needs of your family and what you need to earn to make this leap into entrepreneurship doable. Why do you want to be an entrepreneur? Why do you want your own company? Is it really going to get you there or is it going to make things worse for you and your situation?
I knew I wanted to earn “fun money” to have for family vacations, home renovations, lots of guilt-free cute shoes, and heck, a new car one day wouldn’t be so bad either. Of course, if someone comes by offering me oodles and oodles of money for my website, I will happily listen to their offer.
Now that you know what financial goals you have, it’s time to research your competition.
Learn everything you can about them. Don’t do another thing until you spend a month or two immersing yourself in your chosen industry. If you decided your goal was to open a cupcake store in your local downtown area, you need to learn everything about cupcakes (sounds like a pretty good gig!). Check out every cupcake store, bakery and cookie shop in your area and in surrounding cities. How busy are they? To whom are they catering? How much are they charging? Where do they advertise and how often? What other marketing do they do? What products and services do they offer? Look online and see what cupcake companies all over the country are doing. Eat lots and lots of cupcakes!
For each of your competitors, think about what they do well and what mistakes they are making. What would you do differently? Are their cupcakes too dry? Do they have fabulous packaging? What do you think of their logo and signage? Keep filling that notebook with your lists. In the end, when you review the strengths and shortcomings of your competition, you will learn a ton.
Before I launched Sweet Peas & Stilettos, I spent nearly every evening for two months reading every single website and magazine geared towards moms, babies, families and shopping. I kept spreadsheets of every resource – what I liked and what I didn’t. I also looked at companies in different industries that targeted my same demographic to find out what they were doing that I could learn from.
The more research you are able to do up front, the better. The more knowledge you have, the more confident you will become. You may realize your idea isn’t such a great one or that you have way too much competition. At that point you can go back to your initial “what I love” list and start again. It is better to find this all out now before you spend a penny.
Stay tuned for the next two parts in this series:
Part 3: 10 Business Basics
Part 4: Juggling It All
Alisa Ahlstone Lewis is the AVP of change management for a national insurance company, as well as the president of Sweet Peas & Stilettos – The Modern Mommy Guide.